AIDS Trestment News
Compulsory Licensing for Bridging the Gap -- Treatment Access in Developing Countries
Interview with James Love, Consumer Project on Technologyby John S. James
Thai AIDS and health organizations learned that under Thailand's patent laws, and consistent with international laws and treaty obligations, fluconazole could be sold in Thailand on a nonprofit basis for about 4% of its current cost, which would mean that everybody who needed this drug could receive it. Many lives would be saved, and at no cost to the patent holder, which would receive a small royalty as opposed to receiving nothing when patients cannot buy the drug at all. But the proprietary pharmaceutical industry strongly opposes any such relief, fearing precedents which could lead to weakening of intellectual-property protection in more important markets -- regardless of the specifics of each case, and regardless of the human costs of this abuse of U.S. state power. Until now, because so few people have understood the issue, only this industry has had significant input into the U.S. trade policies which make medicines many times more expensive in poor countries than they would otherwise be.
James Love of the Consumer Project on Technology -- an organization started by Ralph Nader and based in Washington, D.C. -- has proposed using "compulsory licensing" to help make modern pharmaceuticals available in poor countries. Compulsory licensing -- already widely used in the United States itself and in most other countries, and allowed under certain conditions by GATT and other international trade agreements -- means that a nation's government, for an important public purpose, can allow the domestic use of a patent or other intellectual property, under terms and conditions which that government sets. For example, Thailand could use compulsory licensing to allow Thai companies to buy bulk fluconazole, ddI, or other essential medications from generic pharmaceutical manufacturers, sell the drug for use in Thailand, and pay a royalty to the patent holder (usually between 1% and 10% of sales); to protect the patent holder, the specific arrangements would be subject to review by the World Trade Organization (WTO) in Geneva, if challenged by a member country. But instead of letting such a case go to the WTO -- which could set precedents, and almost certainly would bring more visibility to this way of bridging the treatment gap in poor countries -- the U.S. pressured Thailand to change its patent laws in ways that will outlaw this possibility for that country. (For technical background on compulsory licensing, see http://www.cptech.org/ip/health/cl.)
This issue is critically important because even a small group of citizens, focused on bringing balance to U.S. trade policy concerning intellectual-property protection of pharmaceuticals, could have enormous human impact throughout the world. A balanced policy would still protect intellectual property, in order to preserve incentives for corporate drug development. But it would ask that people in poor countries be required to contribute to profits only according to their ability to pay -- instead of being written off and left to die without treatment (while contributing nothing at all to financing drug development, because they are asked to pay an impossible price which prohibits any sale). The alternative to policy reform is to make the great majority of the world's people wait up to 20 years (for patents to expire) for access to new treatments for AIDS, cancer, tuberculosis, and other diseases--a wait which is becoming increasingly serious due to the greatly accelerating pace of developments in biology and medicine.
This issue is new in that until only a few years ago, GATT and other international trade agreements did not cover pharmaceutical patents at all (see "GATT and the Gap: How to Save Lives," AIDS Treatment News #307, November 20, 1998 -- available at http://www.aids.org/atn). Until recently, no one much cared if poor countries made their own AZT or other drugs without permission of the patent holder. Today's GATT agreement does cover pharmaceutical patents, while allowing some flexibility that could be used to protect human health. But pharmaceutical-industry players now have a new focus available for their energies -- protecting their intellectual-property rights as much as possible, in every situation, regardless of the human impact in developing countries -- and so far they have been the only voice heard in U.S. policy. Lack of access to medication has long been a deadly problem, but only recently -- triggered by the new GATT coverage of pharmaceutical patents -- has the U.S. government imposed itself as a major, active obstacle to a workable solution.
Those who believe nothing can be done to change U.S. trade policy if pharmaceutical companies object should consider tobacco, also a powerful industry. A decade ago the U.S. used its economic might to force small countries like Thailand to allow U.S. tobacco companies to promote widespread smoking there. After protest from cancer organizations and others, U.S. trade policy on tobacco was significantly improved.
A movement to reform U.S. trade policy regarding pharmaceutical patents in developing countries would have several strategic advantages:
A strategic challenge is that, unlike with tobacco, the leadership of the U.S. medical community is heavily funded by the industry strongly opposed to reform. But the main reason a large movement did not develop earlier, we believe, is that few have understood this issue, which has medical, legal, economic, political, and diplomatic aspects. Until recently, almost no one working in AIDS knew what compulsory licensing is, let alone knew that laws and treaties allowing it are already in place. But several organizations and projects have recently begun working in this area, starting independently, often without even knowing about the others -- a sign that the time is right for this issue to become more prominent.
A coalition of AIDS and health-care advocacy organizations is now forming to press for compulsory licensing and other approaches to broadening global access to AIDS treatments. For more information on this as-yet-unnamed effort, you can contact ACT UP/Philadelphia at 215-731-1844, or P.O. Box 22439 Land Title Station, Philadelphia PA 19110, or email Asia Russell, email@example.com.
Here is a way of "bridging the gap" in treatment access that can actually work -- not just for a few people but for millions throughout the world, for AIDS and other diseases alike.
Interview with James Love, Consumer Project on Technology
James Love, an economist with the Consumer Project on Technology, focuses on intellectual-property issues, especially in pharmaceuticals; for more information about the organization, see http://www.cptech.org.
AIDS Treatment News: What is a "compulsory license"?
James Love: A compulsory license is a license that is given to a company by the government, to use a patent, copyright, or other form of intellectual property, in return for some compensation of the patent holder. It is called compulsory because perhaps the company did not want to license the patent, or may not have been happy with the terms. A compulsory license is a limitation on patent rights or other forms of intellectual property.
Compulsory licenses are used in a wide variety of cases, in both the patent and copyright areas. For example, National Public Radio has a license as a non-commercial institution to play music on the radio; PBS does also. In the biotech industry, the U.S. government has granted a fair number of compulsory licenses on key patents, to other biotech and pharmaceutical companies. The Army uses compulsory licenses in areas as diverse as satellite technology and night-vision glasses. The U.S. government uses compulsory licenses of air-pollution technology to promote clean air, under the Clean Air Act. We have compulsory licenses on nuclear technology. And in entertainment, there are many compulsory licenses including, for example, cable or satellite television.
So there are many compulsory licenses used in the U.S. -- either for public-interest reasons like clean air, or to promote more competition in business. The government limits patents or copyrights, and grants compulsory licenses for these purposes.
ATN: What is the legal status on using compulsory licensing for allowing access to drugs in poor countries?
Love: It is well accepted in international law that countries can use compulsory licenses on patents for a variety of purposes. The Paris Convention, the most important international treaty on patent right, says, "Each country of the Union shall have the right to take legislative measures providing for the grant of compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent, for example, failure to work." The United States is one of 151 countries that have ratified this treaty.
The Paris Convention is also referenced in the GATT, the agreement which set up the World Trade Organization (WTO). The TRIPS agreement, Article 31 (Trade-Related Aspects of Intellectual Property Rights -- the part of GATT dealing with intellectual property) -- specifically says that you can do compulsory licensing, but it narrows the grounds under which you can do it, and it sets out some safeguards. So under TRIPS, you can do compulsory licensing, but you have to do things in a certain way. It's somewhat complicated, and countries have to think carefully about what they are doing, and why they are doing it.
For example, if a country uses compulsory licensing as a remedy to an anti-competitive or monopoly problem, you have a great deal of latitude. For instance, the country can permit companies that get such a compulsory license to export the product into world markets -- and can set the royalty even at zero percent. An example of a zero royalty license is the U.S. Federal Trade Commission's requirement for open licensing of Dell's VL bus, a technology used in personal computers. (See http://www.cptech.org/ip/health/cl for more information and examples.)
On the other hand, if you want to use compulsory licensing not to prevent anti-competitive abuses, but for some other purpose such as making the air cleaner, or giving medicines to poor people, then you have to use the product in the country, not for export; the primary market has to be domestic. You also generally have to provide some reasonable compensation to the patent owner. Most of these cases will be in that category; the companies using the patent will have to make some royalty payment to the owner.
And there are also rules on whether or not you have to negotiate with the patent owner before the government gets involved and issues a compulsory license. Before a generic drug company, or a national drug company, receives a compulsory license to manufacture a drug protected by a patent, it would first have to try and negotiate a license with the patent owner; only after that failed could they go to the government to get a compulsory license. This could take some time, and questions could be raised about whether there was good-faith negotiation.
But another part of the agreement says that if the patent is used for non-commercial government purposes, then you don't have to give notice or negotiate, you can just issue a license at that point. You still have to pay compensation, but administratively it's simpler; you just do it and deal with compensation issues later. In the United States, this would include our very broad authority to use compulsory licensing of patents and copyrights under 28 USC 1498, our eminent domain authority.
For example, if the United States government or a government contractor wanted to manufacture an important patented drug, it could just do so, and in the United States, the company cannot get an injunction against the U.S. government or the contractor; all it can do is sue for compensation. The Army does this, and NASA also, because they do not want to be tied up in court if they decide that they need some patented technology.
In these government cases in the United States, the courts have held that the government doesn't have to give the company the price that in their dreams they would like to get, or even the standard price. All the government has to compensate them for is what they have lost, at a minimum, not for what they might have gained. (An important case on this point was lost by Kenneth Starr in 1996; at that time he was representing Hughes Aircraft Company which was seeking an increase in a 1% royalty on a patent used for a satellite technology.) And U.S. courts can also consider that a patent's military uses, for example, are so unlike the other uses that a new market has been created, and take this into account to lower the amount of compensation -- for example, when the Army used a commercial eyeglass patent in making night-vision goggles.
These cases are important for developing countries, because if they have people who are not getting a product now, who are just priced out of the market, if the case were brought in the United States, the government could get by with less compensation than if it gave the drug to people who could otherwise have purchased the drug in the absence of the compulsory license.
So the legal basis is very good for developing countries. They are protected under the Paris Convention, and protected under the WTO and the TRIPS, Article 31. And what they want to do is consistent with the case law in the United States, in a variety of cases.
U.S. Government Policy and Its Impact
Love: The problem for developing countries is not whether compulsory licensing of pharmaceuticals is legal, because it clearly is legal. It's the political problem of whether they will face sanctions from the United States government, for doing things that they have a legal right to do, but which the United States government does not like. In the case of Thailand, that country clearly could have done compulsory licensing on these drugs for meningitis and AIDS. They had a statute in place that gave them the authority to do it, and it was consistent with international law. But the U.S. government threatened trade sanctions, and used a carrot-and-stick approach to persuade the Thai government not to do something which would have been legal under international law. Similarly in South Africa, we are trying to stop the South African government from doing compulsory licensing of essential medicines for South Africa, not because it's against international law, but because U.S. pharmaceutical companies, and English, German and Swiss pharmaceutical companies, don't like it.
Much of the effort by public health groups is focused on trying to reign in the U.S. government. For example, if you look at the "TRIPS Amendment" in the Hope for Africa bill, which is sponsored by Rep. Jesse Jackson, Jr. (D., Illinois), that amendment says that the United States government cannot ask sub-Saharan African countries to do more in the area of protecting intellectual property, than what is already required by the WTO (the World Trade Organization, in Geneva, which interprets the TRIPS agreement). This bill would make TRIPS the ceiling on what the United States could impose upon these countries, rather than the floor, as U.S. trade negotiators see it now. Today the U.S. tells these countries that they cannot do even what is permitted in TRIPS.
And the U.S. even tries to stop other countries from doing things in their country that we do in our country. For example, the U.S. has told Israel, Cypress, Brazil, and other countries that they cannot put in their own laws provisions that are in the U.S. Waxman-Hatch Act, or we will punish them in some way if they do it.
So even U.S. law isn't the measure used by our trade officials. What we use as our standard is the wish list of policies that are dreamed up by the International Federation of Pharmaceutical Manufacturers Associations (IFPMA).
Our government has been unwilling even to explain its position to the public. You get bits and pieces in the "Section 301" reports (against specific countries) of the U.S. Trade Representative. But if you call their office and ask for policy papers on issues like parallel imports or compulsory licensing, they will say they don't have any. More than once I was directed to PhRMA (the Pharmaceutical Research and Manufacturers of America); I was told to call the pharmaceutical industry to find out why our government is doing what it does! I asked our government officials for policy statements on compulsory licensing, on parallel imports,(2) and on health registration data,(2) and even though they brought trade sanctions on all three of these issues against numerous countries, they could not produce a single document which reflected the policy behind U.S. positions.
When I meet with people in the State Department, or the Department of Commerce, even those officials who are actively involved in lobbying against compulsory licensing do not know what it means. It is appalling that government professionals who work in these areas are so ill informed.
Normally the generic pharmaceutical industry, which has different interests, would be a check on domination of U.S. policy by a single industry segment. But many of the major U.S. generic companies are now owned by proprietary pharmaceutical companies.
It will be a long battle. Some officials at the World Health Organization are afraid of this issue; last year at one point some officials in the State Department had indicated they would recommend pulling all U.S. funds out of the WHO if they thought the WHO would be too aggressive in support of policies that would broaden access to patented medical technologies in poor countries. That was not the consensus view of the U.S. government; but there are radical people within the State Department who do not understand that they work for the U.S. government, not the U.S. drug companies.
Meeting on Compulsory Licensing, Geneva, March 25-27
A worldwide meeting for face-to-face dialog and negotiation on compulsory licensing between developing countries, developed countries, pharmaceutical companies, public-health groups, patient advocates, and others will be held March 25-27 in Geneva, Switzerland; the major public meeting will be on March 26. The World Trade Organization will make a presentation about the status of international law. Academic experts, and officials from the U.S. government and the European Commission will be there. Developed countries will send many of the participants, but governments and non- government organizations from the South will be there as well.
This meeting is sponsored by Medecines Sans Frontiers (Doctors Without Borders), Consumer Project on Technology, and Health Action International. For more information, see http://www.cptech.org/march99-cl.
For More Information
Notes and References
1. For this and related articles, visit the Bangkok Post archive site at http://www.bkkpost.samart.co.th; click on the image of the newspaper, then click on the 'Search' icon (even if it does not appear to be active), and search for 'fluconazole'. The archive search site is also accessible through the Bangkok Post home page, http://www.bangkokpost.com.
2. Compulsory licensing is one of several intellectual-property controversies where the U.S. is now supporting policies which make drugs more expensive in poor countries. Public Citizen Global Trade Watch, http://www.tradewatch.org, gave us the following overview, from a draft of a document supporting the Hope for Africa Act, introduced in Congress on February 23, 1999 by Representative Jesse Jackson, Jr. and 30 cosponsors, including David Bonior, the Democratic Whip. This bill would prevent the U.S. government from seeking more than is required by GATT-TRIPS, from countries in sub-Saharan Africa.
"There are at least five areas where the U.S. government is now backing pharmaceutical company lobbying for so-called 'TRIPS-Plus' policies in Africa:
"1. Compulsory licensing of drugs for AIDS and other essential medicines. The WTO permits countries to issue 'compulsory licenses' to patents to broaden access to medicines. These compulsory licenses are subject to WTO safeguards, including payments of reasonable royalties to patent owners. Nevertheless, the U.S. government is putting enormous pressure on South Africa and other African countries, opposing any and all compulsory licensing of medicines.
"2. Parallel Imports. Parallel Imports, sometimes called 'grey market' goods, involve cross-border trade without permission of the manufacturer. When parallel imports are legal, hospitals or other consumers can shop around and get the best world price. Drug companies often charge very different prices for the same drug (manufactured and sold by the same company), based upon local market conditions. In 1997 South Africa passed legislation to permit parallel trade in pharmaceuticals, a practice that is common in several countries in the European Community. But at the request of the U.S. pharmaceutical industry, the U.S. government has asked South Africa to repeal its legislation. Without parallel imports, African countries will be hostage to often uncompetitive local markets.
"3. Research Exemptions. The U.S. 'Bolar Amendment' gives U.S. generic drug companies the right to conduct research on patented drugs prior to the expiration of a patent. The U.S. government has opposed efforts by several countries to enact laws identical to U.S. law.
"4. Generic Drug Substitution. Even though the U.S. government led the world in the development of the generic drug industry and in the use of generic drug substitution to lower drug costs, U.S. trade officials have threatened countries that seek to promote generic drug substitution, under the theory that this violates trademark rights.
"5. Health Registration Data. Last year the U.S. government put South Africa on the 301 Watch list, in part for the South African government's decision to authorize generic versions of Taxol, an important cancer drug. The U.S. action was based upon the fact that South Africa permitted generic drug companies to rely upon NIH-sponsored clinical trials to prove that Taxol was safe and effective. The U.S. government, which gave Bristol-Myers Squibb the exclusive rights to those studies (for zero royalties), criticized South Africa for not having 10 years of market exclusivity for such studies, as do some European countries. But 10 years is not required by the WTO. Indeed, in the USA the period is 5 years, and the South African sanctions came after the expiration of the U.S. exclusivity.
"In these and other cases, U.S. trade officials have mindlessly lobbied for large pharmaceutical company commercial interests. Unfortunately, because of the low incomes of African countries, this is contributing to the growing public health crisis of infectious diseases, and presenting profound ethical questions. The U.S. government is seemingly oblivious to terrible disparities in access to modern medical technologies. Representative Jackson's bill seeks to remedy this situation."
Viral Load 50-Copy Test Approved
The UltraSensitive test has already been widely used in research, and often in patient care as well. The new approval should help in getting the cost reimbursed by public or private health insurance.
Roche will include the new test in its Amplicor Patient Assistance Program, which "provides free testing to patients who have a demonstrated financial need." Patients, physicians, and testing laboratories can obtain information about this program by calling 1-888-TEST-PCR (1-888-837- 8727).
Neuropathy: Nutritional Prevention/Treatment Suggestedby John S. James
Jon Kaiser, M.D., in his new book Healing HIV (reviewed in AIDS Treatment News #309, December 18, 1998), in the chapter "Preventing and Treating Neuropathy," suggests calcium 500 mg, magnesium 250 mg, and vitamin B6 100 mg, with these doses taken twice a day; he recommends this regimen whenever he prescribes d4T. If the neuropathy is already present, he increases the dose of vitamin B6 to 200 mg twice a day. He uses other treatments as well for relief of neuropathy, including acupuncture.
Dr. Kaiser noted that while improvement can occur quickly, in some cases it may take several months before there is a noticeable change.
Recently we spoke with Virginia Cafaro, M.D., who also has a large AIDS practice in San Francisco. She recommends more calcium and magnesium, but less vitamin B6 -- 1000 mg calcium and 500 mg magnesium twice a day (once a day may work), but only 100 mg of vitamin B6 once per day, even if the neuropathy has already occurred. She has not seen improvement from increasing the B6. Also, she highly recommends acupuncture.
Both doctors also use certain prescription medicines which may relieve the discomfort of peripheral neuropathy in some patients.
It may also be necessary to discontinue or reduce the dose of the drug or drugs believed to be causing the problem. If the neuropathy is allowed to become severe, it can cause lasting nerve damage.
Patients should also be aware that large overdoses of vitamin B6 (usually greater than 1,000 mg per day) can actually cause neuropathy in some cases.
Note: Check with a healthcare professional before starting a new treatment -- even one that can be purchased without a prescription. There may be more recent information, or medical conditions or drug interactions to consider, or reasons to balance nutritional therapies with other supplements.
National AIDS Update, San Francisco, March 23-26
Treatment, Science Coverage
For more information, see www.nauc.org, or contact KREBS Convention Management Services, 415-920-7000, fax 415-920-7001.
Los Angeles: Activist Training, March 27
The workshop costs $20 (fee waiver available), including breakfast, lunch, and a manual, and will be held at APLA, 1313 N Vine St., Los Angeles.
For more information contact Greg Smith, 323-993-1366 or firstname.lastname@example.org.
Copyright 1999 by John S. James. Permission granted for noncommercial reproduction, provided that our address and phone number are included if more than short quotations are used.