April 11, 2000
Senator William Roth
Senator Dianne Feinstein
Senator Russell Feingold
Representative Dennis Hastert
Representative Charles Rangel
Dear Members of Congress:
I am writing to express our opposition to the current proposals for a compromise on the Feinstein/Feingold amendment to the Africa trade bill, concerning access to medicines for the treatment of HIV/AIDS. It is our opinion that the proposed language should be rejected, on the grounds that it fails to achieve the objective of the original amendment -- namely to restrain US government bullying of African countries over the pricing of pharmaceutical drugs.
In its original form, the amendment would cut off funds to federal agencies that sought
"through negotiation or otherwise, the revocation or revision of any intellectual property or competition law or policy that regulates HIV/AIDS pharmaceuticals or medical technologies of a beneficiary sub-Saharan African country"
if the policy promoted access to medicines for HIV/AIDS, and was consistent with the World Trade Organization (WTO) TRIPS agreement on the protection of intellectual property. The amendment sought to eliminate so called "TRIPS Plus" pressures from the US government -- that is, the current US policy of pressuring countries to adopt stronger forms of intellectual property protection than are required by the WTO.
This amendment is needed to address an appalling aspect of US foreign policy. In the face of a horrific public health crisis, US trade officials are forcing African and other developing countries to enact pharmaceutical policies that raise the price of medicines, far beyond what is required by even the World Trade Organization in its TRIPS accord on intellectual property rights.
Under the proposed "compromise" legislation, the "no TRIPS plus" provision has been replaced with a complex presidential review of African country policies. This review seeks to determine if the US government should pressure countries to adopt intellectual property protections that exceed the WTO requirements.
The April 6 compromise proposal sets standards for a country to obtain relief from bullying. African countries are unlikely to meet those standards. Indeed, the April 6 compromise proposal uses precisely the language that has been used against poor countries for many years, as a public relations cover story for a decidedly commercial agenda on behalf of US firms. Rather than change US policy, the April 6 language would embrace and codify the very justification for trade pressures that have been used in dozens of country disputes.
The April 6 language would evaluate African policies to broaden access to medicines and determine if the practices would be tolerated, or become the basis for a variety of trade pressures, including linkage to benefits of the Africa trade legislation. The six part review is as follows:
(1) the measure is not inconsistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights referred to in section 101(d)(15) of the Uruguay Round Agreements Act;
Discussion: In the original provision, this would be the only test. Is the policy permitted under the WTO rules for intellectual property? Now this is just the beginning.
(2) the country is making significant progress toward developing the infrastructure necessary to ensure that the pharmaceuticals or medical technologies are properly distributed to the affected population in the country;
Discussion: Virtually all African countries have woefully inadequate medical infrastructures. It is trivial to flunk a country on this item. (Indeed, US government could flunk on this item, given the widespread misuse of prescription drugs in this country.) Right now, the US government is using the infrastructure issue to justify its trade pressures against African countries that want to grant compulsory licensing of pharmaceutical patents to make drugs available at lower prices. Indeed, the high price of drugs is said by some US government officials to be a good thing for Africa, because "they" cannot use the drugs properly. Of course, there will surely be misuse of drugs in Africa (as there is now in many US households). No one wants the misuse of drugs in Africa, and the issue of drug resistant strains of HIV/AIDS is not a trivial public health concern. However, the solution is to encourage investments in the medical infrastructure, not to raise the prices of medicines. Indeed, the high cost of medicine is a huge problem for African public health workers. Pharmaceutical drugs already represent 40 to 60 percent of the cost of public health services in some African countries.
(3) the country has engaged in meaningful efforts to improve public understanding of HIV/AIDS and to encourage practices that will prevent further transmission and infection;
Discussion: Many African countries have HIV/AIDS infection rates as high as 10 to 25 percent of persons 15 to 40 years old, and it will not be difficult to flunk countries for not having meaningful prevention efforts. Indeed, some US communities would fail this test too. For example, what about US schools that do not provide real sex education, or communities that will not distribute condoms or clean needles to target populations, in the USA?
(4) the country has taken all reasonable steps to ensure the safety and efficacy of the pharmaceuticals or medical technologies;
Discussion: "All reasonable steps" is a very high standard. It is used in the United States to prevent imports of Claritin or Tamoxifen from Canada at a fraction of the US price, a policy now challenged in a half dozen bills before the US Congress. This is precisely the argument used by the USTR/State/DOC/White House, etc. to oppose Parallel Imports in South Africa, as outlined in some detail in the highly relevant February 5, 1999 US Department of State Report, "U. S. Government Efforts to Negotiate the Repeal, Termination or Withdrawal of Article 15(c) of the South African Medicines and Related Substances Act of 1965." http://www.cptech.org/ip/health/sa/stdept-feb51999 .html
No African country is now taking "all reasonable steps" to ensure "safety and efficacy" of pharmaceuticals. The US fast track approval procedures for new drug approvals don't either. Does any country meet this standard? Also, in Thailand, the US requires the government to engaged in years of unnecessary efficacy and safety testing for (off patent) drugs, to keep cheaper generic drugs off the market. http://www.cptech.org/ip/health/c/thailand/
(5) the country has otherwise made reasonable efforts to work with the patent holder to address the problems of supply of the product;
Discussion: This is one of the main attacks by US trade officials regarding both compulsory licensing and parallel importing. See the http://www.cptech.org/ip/health web page, and specifically the pages on South Africa and Thailand for current examples. In South Africa, the US wanted to create a complex system whereby South Africa had to prove that it would negotiate with patent owners and prove the country benefited from buying drugs outside its national borders (parallel imports), before shopping outside South Africa for cheaper drugs (how would they even know what the best price was?). In Thailand, the US put pressure on the government for years to delay the issuance of a compulsory license for a formulation patent for ddI, a US government invention for HIV/AIDS. In the Dominican Republic, the US claims that a 180 day period of negotiation for a voluntary license isn't long enough. The US government uses arguments like this to undermine needed "fast track" compulsory licensing efforts in poor countries (many poor countries do not have the capacity to undertake extensive litigation, or even evaluate patent claims, and issue in South Africa and Thai cases).
It is also relevant to point out that the US government itself does not even negotiate with patent owners for public use. It just takes patents under 28 USC section 1498, and pays compensation for a taking, a practice not even emulated by countries that are subject to US trade pressures. See also the December 28, 1993 US Presidential Executive Order 12889 that relates to NAFTA, where President Clinton said:
"Sec. 6. Government Use of Patented Technology. (a) Each agency shall, within 30 days from the date this order is issued, modify or adopt procedures to ensure compliance with Article 1709(10) of the NAFTA regarding notice when patented technology is used by or for the Federal Government without a license from the owner, except that the requirement of Article 1709(10)(b) regarding reasonable efforts to obtain advance authorization from the patent owner:"(1) is hereby waived for an invention used or manufactured by or for the Federal Government, except that the patent owner must be notified whenever the agency or its contractor, without making a patent search, knows or has demonstrable reasonable grounds to know that an invention described in and covered by a valid United States patent is or will be used or manufactured without a license; and
"(2) is waived whenever a national emergency or other circumstances of extreme urgency exists, except that the patent owner must be notified as soon as it is reasonably practicable to do so."
(6) the country is not otherwise engaged in a persistent pattern of conduct that denies adequate and effective protection of intellectual property rights.
Discussion: This is the standard open ended "TRIPS Plus" language from US trade law, and it completes the process of turning a "no TRIPS plus" provision into a "TRIPS plus" provision for the Africa Trade bill. An example of how this worked is the 1999 301 citation for South Africa for permitting its public health doctors from addressing the World Health Organization on the need for access to medicine -- an act deemed hostile to intellectual property rights and a barrier to US trade. Also, the 1998 and 1999 complaints by the US that South Africa permitted generic registration of Paclitaxel (generic Taxol), because some countries (in the EU) still provided exclusive rights to data from the NIH sponsored clinical trials on Taxol (even though those rights expired in the US in 1997). Here is the 1999 USTR 301 Report on South Africa:
"South Africa: South Africa's Medicines Act appears to grant the Health Minister ill defined authority to issue compulsory licenses, authorize parallel imports, and potentially otherwise abrogate patent rights. Implementation of the law has been suspended pending the resolution of a constitutional challenge in the South African courts. Undisclosed test data is also not adequately protected under South African law. During the past year, South African representatives have led a faction of nations in the World Health Organization (WHO) in calling for a reduction in the level of protection provided for pharmaceuticals in TRIPS. Copyright piracy and trademark counterfeiting is widespread and the U.S. copyright industry estimates that trade losses due to piracy of copyrighted works increased more than 35 percent between 1997 and 1998. However, the South African Government recently took the welcome step of adopting a implementing strategy to its 1997 Counterfeit Goods Act which could strengthen enforcement. We call on the Government of South Africa to bring its IPR regime into full compliance with TRIPS before the January 1, 2000 deadline, ensure that all Government offices use only legitimate software, and clarify that the powers granted in the Medicines Act are consistent with its international obligations and will not be used to weaken or abrogate pharmaceutical patent protection."
Note that the language in 6 above permits the government to tie copyright violations to the issue of access to medicines for AIDS. Note also that the USTR report repeatedly mischaracterised South Africa law. For example, while the USTR referred to the fact that South Africa's decision to permit parallel imports would violate patent rights, it did not report that US patent law already permits parallel imports. (US barriers to parallel imports are based upon health and safety grounds, not intellectual property grounds). As noted above, USTR even considered South Africa Ministry of Health participation in WHO meetings on access to drugs as a barrier to US trade, and demanded an effective end to public criticisms of US policy positions on patent rights -- an appalling foreign policy decision even without considering the truly terrible public health tragedy in Africa.
For these reasons, we urge you to reject the proposed compromise language on the Africa trade bill. It will give the misleading impression that Congress has fixed a problem while conferring all of the substance and power to the current morally flawed policy.
Sincerely,
James Love
(c) LIMITATION ON USE OF FUNDS- Funds appropriated or otherwise made available to any department or agency of the United States may not be obligated or expended to seek, through negotiation or otherwise, the revocation or revision of any intellectual property or competition law or policy that regulates HIV/AIDS pharmaceuticals or medical technologies of a beneficiary sub-Saharan African country if the law or policy promotes access to HIV/AIDS pharmaceuticals or medical technologies and the law or policy of the country provides adequate and effective intellectual property protection consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights referred to in section 101(d)(15) of the Uruguay Round Agreements Act.
<----(as of April 6) Proposed compromise language--------->
(C) POLICY OF UNITED STATES GOVERNMENT TOWARDS BENEFICIARY COUNTRIES - The President shall encourage all beneficiary sub-Saharan African countries to implement policies designed to address the underlying causes of the HIV/AIDS crisis, including through efforts to encourage practices that will prevent further transmission and infections and to stimulate development of the infrastructure necessary to deliver adequate health care services. In addition, the President shall encourage policies that provide an incentive for public and private research on and development of vaccines and other medical innovations that would contribute to combating the HIV/AIDS crisis facing Africa. Where a measure relating to the distribution of HIV/AIDS pharmaceuticals or medical technologies in a beneficiary country has been identified under section 182 of the Trade Act of 1974, the President shall determine whether -
(1) the measure is not inconsistent with the Agreement on
Trade-Related Aspects of Intellectual Property Rights
referred to in section 101(d)(15) of the Uruguay Round Agreements
Act;
(2) the country is making significant progress toward
developing the infrastructure necessary to ensure that the
pharmaceuticals or medical technologies are properly distributed
to the affected population in the country;
(3) the country has engaged in meaningful efforts to improve
public understanding of HIV/AIDS and to encourage practices that
will prevent further transmission and infection;
(4) the country has taken all reasonable steps to ensure the
safety and efficacy of the pharmaceuticals or medical
technologies;
(5) the country has otherwise made reasonable efforts to
work with the patent holder to address the problems of supply of
the product;
(6) the country is not otherwise engaged in a persistent
pattern of conduct that denies adequate and effective protection
of intellectual property rights.
Where the President determines that the beneficiary country and the measure it intends to adopt satisfies the requirements set out in this subsection, he shall instruct the United States Trade Representative not to seek, through negotiation or otherwise, the revocation or revision of such measure within the beneficiary country.
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