Free Trade: Patents versus Patients

It’s been several years since US-backed Big Pharma sued South Africa for obstruction of profit when it bypassed patent laws to provide cheaper generic medicines for its burgeoning AIDS epidemic. The suit was retracted under furious backlash from advocacy groups worldwide. That battle has since stepped up with the ascendancy of IP (intellectual property) and trade imperatives. At issue are patent regimes affecting life-saving pharmaceuticals. It is critical to have flexibilities in global IP rules that accommodate situations whereby a country simply cannot afford brand name originator drugs to respond to a crisis. In protection of public health, and “to promote access to medicines for all”, the WTO TRIPS (Trade Related Aspects of Intellectual Property Rights) contains such provisions, called the DOHA Declarations, which specifically allow countries to break patents without challenge in face of extreme urgency. 2005 marks the year that developing countries are to come to full compliance with TRIPS. LDCs (least developed countries) have until 2016 to establish IP enforcement infrastructures. South Africa was only the beginning.

In the US, lawmakers are now duking out the fate of Bush’s free-trade pact with Central America, CAFTA, an expansion of NAFTA further into the western hemisphere. Fierce lobbying on both sides have intensified for a bill that was signed in the White House last May and stalled in the House and Senate over the past year amid rising opposition. The Congressional Hispanic Caucus has already rejected it. Health advocates cite that the IP protections will confer monopoly-like status to high-priced brand-name drugs in already resource-poor markets, rendering them unaffordable and inaccessible. It extends data exclusivity provisions in TRIPS and creates a more restrictive atmosphere against DOHA.

Outside Brazil’s UN Missions and Embassies this past weekend, AIDS demonstrators called on Brazil to summon the maximum flexibilities accorded by TRIPS for its public health emergency. Efforts to continue discounts for AIDS drugs have been met with enormous opposition from mega-pharmaceuticals (Pharma), despite the legal and voluntary sphere in which Brazil has sought to engage dialogue. This counterweight to the US in the western hemisphere is a model for the Southern Cone countries with its decisive response to its AIDS epidemic in the late 1990s, effectively using DOHA as a bargaining tool to lower procurement costs of ARVs (antiretrovirals) and in creation of a generics industry that is lauded worldwide. In exercising its right to prioritize public health by legally issuing a compulsory license against AIDS medicines patented by American companies, Brazil sits on the IP Priority Watch List for US sanctions. Its status in the Generalized System of Preferences, which bestows favorable trade access to the US market to select countries, is under threat and used as a carrot-stick.

Elsewhere, bilateral FTAs (free-trade agreements) are being pursued by the US that slip just under the radar of watchdog organizations, containing IP clauses which threaten the affordability of life-saving drugs. There is no transparency: the content of agreements are not publicly available before they are concluded. Many lives ride on the outcome of these free-trade pacts, negotiated by legions of American attorneys in language that allows for tightening of IP laws. Developing countries hardly have recourse against the gravitational pull of the Pharma-friendly US government. Thailand is on the near horizon to be sucked into these negotiations, with landmark judgments rolling out of its courts heralding a rough road ahead. Cambodia, the first LDC admitted to the WTO, is excluded from pharma-patenting until 2016.

Pharma influence is pervasive from the international negotiating tables to the consumer spheres. Pharma commands the highest profit margin of any US industry. It has more than one lobbyist for each member of the US Congress. Budgets for promotion to healthcare professionals, direct-to-consumer advertising, and sales forces exceed the GDP of Subsaharan Africa. It pays for over half of American Continuing Medical Education costs. Lucrative rewards are pushed at academics for promising research, with contracts including gag clauses to prevent the researcher from publishing unfavorable results. Leading companies spend two and a half times more on marketing and advertising than on R&D. Even medical journals have become an unwitting extension of Pharma’s marketing efforts. Regulatory agencies– the one consumer recourse– are understaffed, underpaid, untrained in multi-sector evaluations, unknowledgeable in public health concerns, and increasingly under the influence of the big wallets of Big Pharma.

The commerce of medicine and public health is a paradox. It is a complex mishmash of basic human rights, global trade regimes, economies of scale, financing superstructures, back-door legalese– all with ethical and moral underpinnings. It spawns a poverty industry that the development sector falls victim to– or is created for. . . ? Profits are not being demonized here: FTAs are established to safeguard the prosperity of the parties involved. But what good are the safety mechanisms in these negotiations if applying them will incur the wrath of an unstoppable US government?

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