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U.S. Blocks Trade Agreement on Generic Drug Access in Poor Countries

By John S. James

December 20, 2002

On December 20, international trade talks in Geneva, Switzerland failed to resolve the major remaining issue on access to generic versions of patented medicines in developing countries to meet public-health needs. All 143 other countries were ready to accept a compromise text negotiated on December 16. But the U.S. insisted on an additional restriction -- to limit the agreement to AIDS, tuberculosis, malaria, and similar major epidemics. Cancer, heart disease, asthma, and hundreds of other illnesses would have been excluded. Developing countries would not accept this restriction, and European countries did not want to re-open the difficult negotiations.

All treatment activists we have heard from think that the compromise, which was reluctantly agreed to by poor countries, would have been harmful. They feared that it would create a cumbersome process, easily open to obstruction, that would rarely or never be used to help anyone obtain medicine, while damaging some of the understandings in place. Some feared it could threaten or even end the historic consensus reached last year by the world's governments that trade rules should not be an obstacle to public health. Negotiations will start again in early 2003, attempting to reach agreement by February 11.


Traditionally patent laws were decided separately by each nation, not by international organizations. And until about 1995, while patents on pharmaceuticals were widely recognized among rich countries, they were not uniformly binding on developing countries. But starting with the World Trade Organization (WTO) treaty in 1995, almost every country on Earth was pressured to sign on to a set of trade rules that included pharmaceutical patents. These rules established deadlines for developing countries, and required full compliance by 2006 (later extended to 2016 for least-developed countries). Patent holders can set whatever price they want, and apparently no thought was given to the fact that major corporations would regularly price life-critical new drugs totally out of reach of most of the world's people.

Current WTO rules allow a country to override a patent to meet a legitimate public need, under certain conditions, through a mechanism called compulsory licensing. But within a few years the existing rules may block export for compulsory licensing, stopping its use in any country not big enough and rich enough to have its own domestic pharmaceutical industry. The Geneva negotiations that just failed were called to deal specifically with this production-for-export problem.

In November 2001 in Doha, Qatar, all the countries in the trade negotiations agreed that WTO rules would not prevent countries from taking measures to protect public health (the United States reluctantly signed on in order to keep the negotiations moving). Developing countries were promised that the export problem would be corrected in 2002, presumably in accordance with the Doha agreement. But several rich countries -- the U.S., Canada, Japan, the European Union, and Switzerland -- pushed for restrictions on behalf of their pharmaceutical companies. Developing countries this month were pressured to accept these harmful restrictions. But they drew the line at caving in to the disease limitation finally demanded by the United States.

Shortly after rejecting the agreement, the U.S. said it would not bring action against certain drug exports while the talks continued. This statement was widely seen as a public-relations move unlikely to have any practical effect. For generic manufacturers must get drug approvals in each country, and deal with other time-consuming and expensive obstacles as well, before export can happen. They need stability and are unlikely to base business decisions on a unilateral statement designed to look good, but that can be taken back any time.

For more information see news reports in the Washington Post ("Talks on Low-Cost Drug for Poor Nations Stall," by Paul Bluestein, December 21), The New York Times ("Trade Talks Fail to Agree on Drugs for Poor Nations," by Elizabeth Becker, December 21), The Guardian (UK) ("U.S. Wrecks Cheap Drugs Deal," by Larry Elliott and Charlotte Denny, December 21 -- which reported that Vice President Cheney apparently made the decision not to accept the compromise), The Wall Street Journal ("U.S. Retreats from Earlier Move to Keep Drugs from Poor Nations," by Michael M. Phillips, December 23), or other newspapers and wire services. For a more detailed description of the negotiations see Inside U.S. Trade ("TRIPS Draft Strikes Balance on Many Issues, but Isolates U.S. on Scope," December 20).


"We're basically talking about a system that could help save millions. If a good system isn't created, you can imagine a world a few years from now where multinational companies control the patents for everyone." (Ellen 't Hoen of Doctors Without Borders, quoted in The New York Times, December 21.)

"President Bush wants to argue that the diseases American children receive treatment for are off limits to poor children in poor countries, but they cannot win that argument." (James Love, director of the Consumer Project on Technology, quoted in The New York Times, December 21).

"You have to ask yourself, are you going to have a patent system or not? If you're going to permit people to import drugs to treat cancer, diabetes and heart disease, what are you going to do when someone says, I want Viagra on the list?" (Unnamed U.S. trade official, quoted in the Washington Post, December 21.)

Comment: Issues Needing Attention

ISSN # 1052-4207

Copyright 2002 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.

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