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May 14, 2007

Health groups bash process and substance of "deal"

Health Gap, Essential Action and Student Global AIDS Campaign - some of the nation's leading groups fighting for access to life-saving medicines - have released a statement bashing the process and substance of the "deal." Their conclusion, even with the "deal" fixes, the FTAs "restrict rather than expand access to lifesaving medicines." Read the full analysis after the jump.

HEALTH GAP • ESSENTIAL ACTION • STUDENT GLOBAL AIDS CAMPAIGN

For Immediate Release: Monday, May 14, 2007

Reaction from Public Health, AIDS organizations to Democratic Leadership-Bush Administration Announcement on Trade Policy

On Friday May 11, the House Democratic leadership and the Bush Administration announced an agreement on trade issues, including patent and access-to-medicines-related provisions of trade agreements with Peru and Panama.

We remain concerned that while some first steps have been taken to lessen the harm of U.S. trade agreements, it is still the case that, if passed by Congress, these trade agreements with Peru and
Panama will restrict rather than expand access to lifesaving medicines.

The first thing that must be said about the agreement is: nothing definitive can be said until more details emerge, and final textual amendments are presented. In the case of trade agreements, details and specificity are of crucial importance.

A better process would have involved a transparent discussion of key issues, and an opportunity for more structured input and comment on unfolding details from Members of Congress and the public. That better process could only have yielded a better outcome.

On the substance, it appears the Democratic leadership has taken some first steps to make U.S. trade agreements less harmful to public health. It is not true, as some news accounts have suggested, that the May 11 deal will limit brand-name drug companies' patent and related monopolies. In a best-case scenario, what the deal will do is limit the extent to which U.S. trade agreements expand brand-name drug companies' monopolies.

However, arguing about how to make trade deals "less harmful" is the wrong framework. When it comes to public health, the United   States should aspire to a higher standard: first, and at minimum, to do no harm; and second, to use international agreements to address access-to-medicines, efficient innovation of medical technologies and other pressing global public health priorities. Trade agreements modified in accord with the May 11 announcement will fail to meet that test.

More will be required in order to meet previously guaranteed rights that countries can prioritize public health and take measures to guarantee access to medicines for all. The Democratic leadership was not able to eliminate all of the life-threatening provisions in U.S. trade agreements, which themselves build on a World Trade Organization framework that is already heavily biased to favor Big Pharma.

For example, the preservation of data exclusivity alone is a gigantic gift to Big Pharma. Data exclusivity -- rules preventing generics from relying on clinical test data from brand-name companies – is Big Pharma's top agenda item for trade deals, and a major impediment to generic competition. In addition, the reported time limits and exceptions to data exclusivity announced on May 11 may be narrower than initially reported.

Moreover, it is very dangerous to give any additional latitude to an administration that has shown itself to operate in bad faith on access-to-medicines issues. Just last month, USTR placed Thailand on the "priority watch" list for lawfully issuing compulsory licenses. Formal rights preserved in free trade agreements are of limited value if USTR is going to apply informal pressure, use the Special 301 process, and coerce countries during trade agreement implementation phases -- all to undermine access-to-medicines initiatives.

Developing countries should be free from agreements and USTR pressures that restrict their rights to use all available flexibilities for accessing more affordable generic medicines to meet their public health needs. Members of Congress should insist on a new approach to access to medicines issues with trading partners, rather than accepting a partial package of reforms.

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ira

This is the analysis of the 'patents, IPR and access to medicines' part of the deal, by Knowledge Ecology International (formerly the Consumer Project on Technology):

http://tinyurl.com/2dob82

In general, the House Democrats have negotiated important new concessions from the Bush Administration in three areas. There are no more obligations for patent extensions, and mandatory linkage has
been eliminated. These are both important changes that will benefit patients and improve the trade agreements. The changes regarding protection of test data are more problematic, both because the agreement still embraces a system of exclusive rights for data, instead of alternatives such as cost sharing (sometimes referred to
as compensatory liability), and because the flexibility for limitations and exceptions to the exclusive right is unfortunately
bound to a poorly drafted side letter, rather than a plain language provision that makes it clear that countries can waive or limit the exclusive right when it is necessary to protect patient interests,
regardless of patent status on products. These problems in drafting may reflect a lack of technical understanding of the issue by certain parties involved in the negotiation.

The trade agreement also does not address the current problem of USTR attacking countries for actually using such measures as compulsory licensing of patents (such as putting Thailand on the 301
priority watch list), or demanding that trading partners set limits on the grounds for issuing a compulsory license (reportedly one of the conditions presented in recent FTA negotiations and in the "action plan" for Thailand to avoid trade sanctions).

In general, the changes are welcome, as a partial but still incomplete step toward honoring the 2001 Doha Declaration. It is
our hope that members of Congress and Presidential candidates will begin to think beyond IPR obligations as the only way to address the global sharing of R&D costs. Strong IPR is a mechanism to raise
drug prices, and high drug prices should be seen as one possible means to support R&D, rather than an objective of trade policy . We need to be moving away from IPR agreements that create high drug
prices to a new framework focusing on the support for R&D. This new approach would give countries the flexibility to consider other approaches to support R&D, which are less restrictive of access to
medicines.

Our comments on Section III of the agreement are given below:

III. Provisions on Patents/IPR and Access to Medicines
A. Data Exclusivity

In general, any regime of “data exclusivity” is objectionable, since it implicitly requires a generic competitor to replicate scientific tests on humans, a practice that is both wasteful and
unethical. The House/WH deal does not push the obligation toward one of cost sharing, which would have avoided these problems.

The benefits of III.A. are very minor, at best shortening the term of exclusivity by six months, in cases where the foreign
registration is based upon the U.S. registration, and occurs within
six month of the U.S. registration, a set of facts which will often not apply.

B. Patent Extensions

The replacement of "may" for “shall” means patent extensions are now optional. This is a significant and welcome change in the IPR burdens for developing countries.

C. Linking Drug Approval to Patent Status

The elimination of the mandatory linkage between drug registration and patent status is also an important and beneficial
change.

It was interesting that the language would in fact only allow linkage when there were “expeditious” ways to challenging patent validity or relevance, and rewards for challenging patents, two good
provisions that recognize the possibility that poor patent quality can be an unwanted barrier to competition and trade.

It would be stronger if it mentioned that the obligations regarding injunctions should not exceed those that currently exist in TRIPS Article 44. The U.S. would also benefit from such language, since U.S. law under the eBay decision provides significant
flexibility to deny injunctions.

D. Side Letter on Public Health

This provision on the side letter is potentially useful, but only if it is not implemented mechanically, since the existing side letters are not well written, and subject to interpretations that limit their usefulness. In particular, there must be clear language that:

(1) the country may override the exclusive rights in test data, in a manner similar to a compulsory license on a patent,
including cases where there is no patent on the product (the position that USTR has taken informally in several seminars and meetings where this topic has been discussed),

(2) that TRIPS flexibilities are not limited to the flawed 2003/2005 “solution” to paragraph 6 of the 2001 Doha Declaration, but also include but are not limited to those referenced in Paragraphs 4, 5 and 7 of the 2001 Declaration (which implicitly are also extended to Articles 6,7,8, 30, 40 and 44 of the TRIPS), and

(3) the U.S. government will not be taking unilateral trade actions against countries that use such flexibilities in practice, such as the listing of countries on the 301 list for actually issuing compulsory licenses.

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