November 10, 2001
Robert B. Zoellick
Dear Ambassador Zoellick,
I am writing to urge the US government to withdraw its opposition to
language in the WTO Ministerial declaration that addresses important
public health problems, and support substantive efforts to deal with
trade relates aspects of public health. In her November 9, 2001
statement on the WTO negotiations, WHO Director General Gro Harlem
Brundland said "access to health care is a human right and we all have
an obligation to see this right progressively realized," noting further
that "many millions of people still cannot get the medicines and
vaccines they need at an affordable price." These problems will
certainly become more acute as the WTO rules are more fully implemented.
Despite confusion created by public relations efforts by US and European
export industries, it is increasingly clear that the WTO TRIPS accord
presents barriers to medicines for many poor countries. It is also
clear that the public in the US and Europe do not support government
trade policies that make medicines unaffordable in developing countries.
Unfortunately, in the current negotiations the US government has engaged
in a number of strategic maneuvers designed to prevent the developing
countries from obtaining interpretations that would address existing
problems with the implementation of the TRIPS agreement. The US has
been in some cases proposing language that would appear to benefit the
poor, but which would actually narrow protections for consumer
interests, and in other cases, asking African countries to take short
term extensions of compliance periods as a substitute for more permanent
and sustainable solutions. Given the power of the US government and the
situation in many developing countries, you may well succeed, but only
to our shame -- undoubtedly contributing to the growing list of
grievances against the US which harm other foreign policy objectives and
lower our standing in the world community.
It is objectionable that the US delegation is seeking to discredit
the positions advanced by the Brazil and Indian delegations on the
grounds that these countries are pursuing commercial rather than public
health objectives, positions that were advanced in today's New York
Times, for example. As you know, India is today the most important
global source of low cost generics, and policies that enable India to
supply low cost generic drugs globally clearly benefit the poor. We
recognize that rules that allow India to be a major global supplier of
generic drugs, including those produced for sale in countries that issue
compulsory licenses, runs contrary to US export company interests. But
without the ability of poor countries to obtain cheap alternative
sources of drugs, the poor will suffer, and the rules that will
determine if this can be done are at the core of this week's WTO
discussions. Also, the US needs to acknowledge the role that Brazil has
played in leading the way in terms of its commitment to funding HIV
treatment, and which also created a global market for generic HIV drugs,
benefiting not only Brazil, but also leading to huge reductions in the
prices of HIV drugs in Africa and other poor countries.
THE NEED FOR PRO-PUBLIC HEALTH INTERPETATION OF THE TRIPS
In some cases the problems with the present TRIPS accord are manageable
within the current framework of the agreement, if one can obtain
clarifications and pro-public health interpretations of important
sections of the agreement, and also if developing countries manage to
enact and implement laws that take advantage of the much discussed
"TRIPS flexibility," something which has yet to happen. Here too it is
noteworthy that the US government has mounted a series of attacks on the
WHO programs for technical assistance on patent law changes, raising
basic questions about the good faith of US government officials who
claim the existing agreement has sufficient flexibility. It is hardly
creditable to bash the WHO for its efforts to help the poor countries
write fast track compulsory licensing laws, and pressure countries in
bilateral discussions, and then tell reporters at the WTO meeting that
we support the right of poor countries to write such laws.
FAILURE TO ADDRESS PROBLEMS WITH 31.F of TRIPS
Not only is the US government objecting to the most effective and plain
language that makes it clear that members can protect the public health,
but it is refusing to address directly the most obvious flaw in the
agreement -- the harmful consequences of Article 31.f of the TRIPS
accord, which if strictly interpreted, would make compulsory licensing
an empty benefit for most developing countries, although not for the US
and many European countries, which have both the industrial capacity and
the domestic market to make compulsory licensing feasible. This is a
result that is morally repugnant, and needs to be fixed.
The problems of Article 31.f have been discussed for some time, having
been raised in numerous US and EU discussions with the Trans-Atlantic
Consumer Dialogue, and having been raised by coalitions of public health
groups even before the 1999 Seattle Ministerial meeting, and in
countless meetings with US and European trade negotiators. Nonetheless
we always find the US government prepared to block concrete progress on
this issue, in this case putting the matter off yet again for future
discussion, while pressing ahead for immediate action on the trade
priorities of other US export industries. All the US government has to
do to fix this problem is support language that Article 30 of the TRIPS
could be used to permit exports of medicines where the legitimate
interests of the patent owner are protected in the export market, the
approach taken by HR 3235, a bill pending in the US Congress, or by
interpreting the existing TRIPS agreement so that an importing country
can grant a compulsory license to a firm in a foreign market.
Here it is worth noting that the HR 3235 presents very clearly the
ethical and practical issues that the WTO has to deal with, in a
Northern context. HR 3235 gives the Secretary of Health and Human
Services (HHS) the authority to permit the non-voluntary use of a patent
to export medicines in a public health emergency, for example, if a
highly contagious disease puts the lives of Americans at risk, and there
is inadequate access to medicine in another country due to patent
barriers, or in cases where for humanitarian reasons the US wanted to
rush medicines to aid in a foreign public health emergency, including an
act of terrorism or biological warfare. It is unthinkable that we would
fail to act in cases where our actions could help, and for this reason
alone your office should address the problems of Article 31.f.
''(c) EXPORT OF HEALTH CARE PRODUCTS IN PUBLIC HEALTH
EMERGENCIES.-The Secretary may authorize the use of a
patent, without authorization of the patent holder or
any licensees of the patent holder, to export medicines
or other health care products that are needed to address
global public health emergencies, when the legitimate
rights of the patent holder are protected in the export
market.
What is deeply disturbing is that your office has mindlessly opposed
fixes to Article 31.f in order to help our export industries by
crippling the usefulness of compulsory licenses in many developing
country markets, in the post 2006 world where major generic producers
such as India will be required to issue 20 year patents on medicines.
It is useful to note that the US and many other northern countries have
used antitrust proceedings to address these issues, which is another
case of the agreement having one impact in the US and Europe, and
another in a developing country that does not have the bureaucratic
resources to benefit from some areas of TRIPS "flexibility." Antitrust
enforcement is an expensive and complex undertaking, and remains largely
a developed country tool for issuing compulsory licenses. It is also
important to note that the US government itself issues compulsory
licensees to foreign patents. See for example the September 26, 2001
Federal Register notice regarding United States v. 3D Systems
Corporation and DTM Corporation, where the US Department of Justice
required zero royalty compulsory licenses of Mexican and Canadian
software patents.
SHORT TERM EXTENSIONS OF COMPLIANCE PERIODS
The most cynical approach by the USTR has been to offer short-term
extensions of TRIPS compliance to African countries, hoping they will
make a separate deal with the US, splitting the developing country
delegations.
The problems with the US proposals are many. The least developed
countries already have the right to ask for extensions of TRIPS
compliance, and the US proposal probably has the effect of limiting the
term of such extensions, since they can be open ended now under Article
66 of the TRIPS. Of course many African countries do not even qualify
as LDCs, including countries like Kenya, Botswana, Ivory Coast, Ghana,
Nigeria or Zimbabwe, which are hardly rich countries by US or European
standards.
But also, developing countries face very difficult non-WTO pressures,
including for example annual AGOA certification on IPR issues, threats
to withhold GSP benefits, and numerous bilateral and regional trade
negotiations where the US aggressively advances TRIPS plus positions.
Unless the US government has some binding way to ensure that it will not
separately pursue high IPR standards in these other proceedings, LDCs
and African countries will not benefit from even these putative
extensions. It is of course relevant that H.R. 3005, a bill to give the
USTR fast track negotiating authority, requires the USTR to seek
accelerated compliance with TRIPS, as well as to oppose price controls
on medicines. Also, note that right now some 37 countries in Africa
already issue patents on antiretroviral drugs, five years before
required to do so by the TRIPS, so the notion that the formal extension
will be meaningful needs to be balanced with the reality that US
bilateral trade pressures make this a difficult if not impossible
situation for LDCs and African countries. For these and other reasons,
we support measures that actually modify the understanding of what
constitutes compliance under the TRIPS -- a more realistic benefit to
developing countries than a phony extensions that will be taken away in
bilateral negotiations.
More important, however, the interests of LCDs and indeed every county
in Africa will be linked to the rules faced by India, Brazil and other
developing countries that are excluded from the benefits of the US
proposal, for two reasons. First, LDCs and African countries need to
import medicines or at least active ingredients from countries that have
the best capacity to manufacture them -- such as China, Korea, India,
Brazil, etc. Second, the LCD and African markets are so small that they
lack the necessary economies of scale to make generic manufacturing
efficient for many drugs. As has been pointed out on several occasions,
it was the decision by Brazil to purchase generic HIV drugs which
created a sufficient market to make today's low cost generics ARV drugs
possible, ultimately benefiting African countries and making HIV
treatment a feasible goal after years of high prices by US and European
drug companies. This is the empirical reality that you must deal with,
and take responsibility for as millions perish and suffer form AIDS and
other illnesses.
It is also appalling that the US government has sought to limit the
benefits of the TRIPS flexibility to only the most serious health care
problems, such as AIDS. Countless persons in poor countries will need
access to medicines for asthma and other common illnesses, and why on
earth should our trade policy make this difficult? Do we really hate
the poor that much? It is this appropriate from a country so rich, that
has benefited so much from global trade?
For these reasons, we ask that the US government reexamine its
opposition to the developing country proposals, and embrace more moral
and realistic trade objectives.
FOCUS TRADE TALKS ON R&D
Finally, to the extent that the US is truly concerned about R&D, rather
than export company profits, we urge the US delegation to propose a new
round of trade on R&D, addressing such issues as the lack of investment
in R&D on drugs for neglected diseases, or the need to have broader
sharing of the burdens of funding basic research, now largely paid for
by US taxpayers through the NIH. This would recast the trade debate in
a positive way, emphasizing also the important contributions by US
taxpayers to fund global R&D, and gain the support and respect of the
public health community. Indeed, it should be obvious that the entire
framework of the WTO trade agreements has been focused too much on the
narrow interests of our export industries, while failing to even imagine
the types of trade agreements what would have been designed if the
object was to advance public health goals. As our trade policy emerges
from the legacy of close ties and revolving doors between lobby groups
such as PhRMA and the USTR, it will be necessary to turn trade policy
into something that reflects real public interest objectives. You need
to lead the way, rather than continue to act as a government funded and
empowered surrogate lobbyist for a handful of large export companies.
Sincerely,
James Love
Cc: Joe Papovich
United States Trade Representative
rzoellick@ustr.gov
Section (c) of HR 3235
Director
Consumer Project on Technology