Congressman hosting Obama at this week’s Democratic Retreat urges PEPFAR Funding to Treat 12 million by 2016

Rep. Bob Brady, Philadelphia co-host of the House Democratic Caucus and the President and Vice President of the United States at a strategy retreat this week, wrote to Vice President Biden to call on the Obama Administration to restore PEPFAR funding cuts and achieve 12 million on treatment by 2016. The White House releases its proposed 2016 budget Monday, Feb 2. Health GAP and many other AIDS groups, experts, and members of Congress have been calling for $300m increase for PEPFAR over FY15 and the highest legally permissible contribution to the Global Fund in the President’s budget. “If Obama drops the ball again, it undermines his commitment to an AIDS free generation,” said Jose DeMarco of ACT UP Philadelphia and Health GAP. “We’ll work with the strong bipartisan coalition in Congress that strongly supports global health programs to finish restoring the funds.”

Letter from Congressman Brady

AIDS activists challenge Trans-Pacific Partnership agreement that will strengthen drug company monopolies and undermine access to medicines worldwid

For Immediate Release: January 26, 2015

Contact: Michael Tikili, Health GAP: (347) 217-3030 •

AIDS activists challenge Trans-Pacific Partnership agreement that will strengthen drug company monopolies and undermine access to medicines worldwide Protest: 12 noon, Sheraton New York Times Square Hotel, 811 7th Avenue,

(New York) As a controversial trade deal—the Trans-Pacific Partnership—enters the latest round of negotiations in New York City, Health GAP will join hundreds of trade, labor, environmental, and health activists to protest the devastating impact the deal would have on access to affordable generic medicines. If passed, the TPP would create a trade zone between the United States and 11 other Pacific Rim nations. Activists will gather at 12:00pm EST at the site of negotiations, the Sheraton New York Times Square Hotel at 811 7th Avenue and West 53 St.

These talks are billed as the “final negotiations” for the Trans-Pacific Partnership (TPP), a trade deal so secret that not even members of Congress are allowed to see the text. Among other concerns, activists claim that the TPP will undermine efforts to ensure access to affordable medicines at home in the United States and around the world.

Previously leaked proposals revealed that the US seeks easier-to-get, stronger, and longer patent monopolies on medicines and new monopolies on drug regulatory data that would prevent marketing of more affordable generic equivalents. It also seeks restrictions on price control measures and enhanced investor rights that would allow drug companies to sue governments when their expectations of exorbitant profits are undermined by otherwise lawful government policies and decisions. These are among the most severe intellectual property rules ever demanded in international trade.

“The TPP would create a vicious cycle. The provisions currently proposed will allow for fracking and other practices that fuel environmental degradation and make people sick. Strengthened intellectual property rules will then prevent people from accessing life- saving medicines,”, said Michael Tikili of Health GAP, one of the endorsers of the demonstration. “Thirteen million people living with HIV depend on generic AIDS medicines and another 20-plus million are waiting line for treatment. By protecting Pharma’s bloated profits, the Obama administration is undermining its own global AIDS initiative – this isn’t a trade agreement—it’s a death pact.”

Opposition to the TPP is growing both among the American public and in the Democratic delegation to Congress which is reluctant to grant the President the fast- track trade promotion authority asked for in his recent State of the Union address. “It’s becoming increasingly clear that there’s no track for fast track,” said Professor Brook K. Baker, senior policy analyst for Health GAP. “Congress shouldn’t give a blank check authorization for continued secret negotiations, with limited debate, and only an up or down vote at the end of the line,” he explained. “Too many jobs, too many environmental risks, and too many people needing affordable medicines in the US and abroad will be adversely impacted by IP rights that benefit only pharmaceutical behemoths and the super-rich who own them.”

With growing momentum for finalizing the agreement this year, demonstrators demand a truly new trade policy that protects health, environmental, and labor rights and that allows governments to pursue prudent measures to protect their economies, their health, and their environments. 

Letter to Obama: Promote Health In India Not Narrow Pharma IP Interests

endorsers.pngPresident Barack Obama

The White House Washington, DC

20 January 2015

Dear President Obama,

We write as American organizations in advance of your trip to India this month to ask you to support India’s central role in providing high-quality, low-cost generic medicines—which are essential for health care around the world. Recent U.S. policy stances have sought to topple parts of India’s intellectual property regime that protect public health in order to advance the interests of multinational pharmaceutical corporations in longer, stronger, and broader exclusive patent and related monopoly rights. India’s laws fully comply with the WTO TRIPS Agreement. Millions around the world depend on affordable generic medicines that would disappear if India acceded to these proposals, including many beneficiaries of US-funded programs. Instead of using your trip to promote the narrow interests of one segment of the pharmaceutical industry, we ask you to support the interests of people who need affordable medicines, whether they live in the U.S., in India, in Africa or elsewhere. Our world is safer and healthier because of India’s pro-health stance and we ask you to say so publicly while you are there.

Today Indian pharmaceutical companies produce 90% of the generic HIV/AIDS drugs used around the world—including the vast majority of the medicines procured by the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR). By reducing the price of treatment by over 96%, generic competition made it possible for you to commit to ending AIDS. Similarly, people facing heart disease, cancer, hepatitis C, and other life-threatening illness around the world, but especially in developing countries, would not be able to afford their medicines were it not for Indian generic companies.

When you were running for office you recognized this, and promised to “support the rights of sovereign nations to access quality-assured, low-cost generic medication to meet their pressing public health needs” and to “break the stranglehold” that a few big drug companies have over these medicines. Today these companies are taking aim against “Section 3(d)” of India’s patent law. Adopted after India joined the WTO, this TRIPS-compliant rule ensures that only truly new inventions are patented— avoiding the issuance of low-quality patents and “evergreening” that expands monopolies and undermines people’s access to medicines. In addition, we know industry is pushing you to pressure India to go beyond its WTO obligations to adopt “data exclusivity,” rules which make clinical trial data submitted to public regulators into another right, creating a monopoly barrier to generic registration and competition even where there is no patent. Dropping Section 3(d) and adopting data exclusivity would reward some of the world’s most profitable companies, not for innovation but simply for having effective lawyers and lobbyists. And it would damage the health of millions.

Finally, we are deeply concerned about proposals for a bilateral investment treaty with India. The current U.S. model bilateral investment treaty contains provisions that would empower disgruntled pharmaceutical corporations to bypass domestic courts and directly seek binding arbitration before international extrajudicial tribunals authorized to order taxpayer compensation for future profits if their expectations are frustrated by government policies or decisions.

As President we ask you to stand for more than the interests of a single U.S. industry as you represent our nation in India. From Detroit to New Delhi, health is increasingly interconnected. Our world is safer when it is healthier, and it is healthier because India’s laws appropriately balance health and IP. Will you stand with us for public health and the interests of consumers? We hope you will.


Health GAP (Global Access Project)

amFAR (American Foundation for AIDS Research)

Oxfam America

Public Citizen

Missionary Oblate of Mary Immaculate


TAG (Treatment Action Group)

AIDS Policy Project

VOCAL-NY (Voices Of Community Activists & Leaders)

GNP+ (Global Network of People living with HIV)

ACRIA (AIDS Community Research  Initiative of America)

Housing Works

WIM/CRI (Wisconsin-Iowa-Minnesota Coalition for Responsible Investment)

Capuchin Franciscans, Province of St. Mary

No Track for Fast Track

by Brook K. Baker

President's State of the Union address call for trade promotion authority is a call to strengthen pharmaceutical monopolies

In his State of the Union Address on January 20, President Obama stated that he was asking both parties for trade promotion authority, otherwise known as "fast-track." This authority would limit Congressional review of trade agreements, such as those being negotiated with the Pacific Rim countries and Europe, instead allowing only limited Congressional debate and an up-or-down vote on their passage. President Obama said that the US was being squeezed by China, that new trade deals from Asia to Europe would protect American workers, and that the problem with past trade deals is that partners broke the rules at our expense. President Obama is wrong on all counts, but even more dangerously, trade promotion authority would allow fast-track approval of intellectual property (IP) and market access rules that would solidify, expand, and lengthen pharmaceutical monopolies hurting access to medicines domestically and abroad.

Economic evidence from past trade deals indicates that they have resulted in outsourcing of manufacturing jobs to cheap labor havens, where multinationals pay less to workers and pollute the environment more while reaping higher and higher profits that primarily benefit the world’s wealthiest. China was one of the beneficiaries of those policies. Country partners have not broken the rules. Rather, the corporations that benefit from global deregulation and expansion of IP monopolies have simply taken advantage of these agreements to ensure that workers—both in the U.S. and abroad—race to bottom while the richest of the rich clip coupons and rake in barely taxed capital gains. The legacy of past fast-tracked trade deals has been growing inequality with corporate elites multiplying their wealth, while workers lose ground.

These corporations aren't happy with any regulations that put the brake on their relentless search for trading profits. Similarly, IP-based industries, especially Big Pharma, are intent on expanding their patent rights and data monopolies. Pharma- inspired IP demands include patent term extensions, data monopolies, eased rules on getting patents, and elimination of price control measures and other regulatory barriers to high prices. Worse yet, when their expectations of bloated profits are thwarted by lawful regulations or decisions, corporations want the right to bypass the courts and to require biased and unreviewable arbitration directly against countries, like the $500 million NAFTA claim by Eli Lilly against Canada.

People in the US tend to think that IP-expanding trade rules mainly impact people in other countries, but increased IP monopolies will impact patients and payers here as well. Every time a rule in a US trade agreement ties the hands of a foreign government it simultaneously ties hands here as well, threatening efforts to bring drug prices under control in the US and efforts to reduce the proliferation of secondary patents on medicines that provide no real improvements for patients. Similarly, increased pharmaceutical monopolies will directly and adversely impact US global health initiatives, including those targeting HIV, TB, malaria, and even Ebola, which increasingly rely on affordable generic medicines.

Trade promotion authority is corporate profit-for-the-few promotion gussied up in the rhetoric of benefitting US exports. It's yet another massive corporate give-away, where the government, insurers, taxpayers, and individuals will pay more for medicines—or more likely, go without. Our demand should be no track for fast track.

The Cynical Connectedness of Gilead's Hepatitis C Pricing and Anti-Diversion Policies

Professor Brook K. Baker, Senior Policy Analyst Health GAP, Northeastern U. School of Law

January 16, 2015

Gilead has both announced the highest recorded prices ever for its direct acting hepatitis C antivirals, sofosbuvir/ledipasvir, and one of the most stringent anti- diversion programs ever devised. The price, highest in the US, comes in at a whopping $94,000 for a 12-week course of treatment, with slightly lower prices in Europe. Before this combo was approved, Gilead charged $84,000 – a $1000 a pill – for stand-alone sofobuvir, earning $8-10 billion in the first year of sales. This is for a course of treatment that experts have estimated can be manufactured for approximately $100. In turn, the emerging anti-diversion program requires patients in low- and middle-income countries to physically come to designated Gilead distribution sites to exchange an empty 30-day pill bottle for the next month’s supply. This program undermines the physician-patient and pharmacist- patient relationship and patient autonomy, adherence, and confidentiality. The question arises: are the excessive pricing and the draconian anti-diversion policies related? The answer is – like gold and diamonds all the way to the bank.

Gilead’s long-term pricing strategy is even more cynical than it seems at first glance. As the first company coming to the market with a highly effective and safe oral Hep C medicine, Gilead had monopoly pricing power, especially for patients seriously ill from Hep C, those living with or immediately facing severe cirrhosis, liver transplants, and/or liver cancer. These desperate patients – and their physicians and insurers, would pay almost anything to survive the extraordinary costs of thrice-weekly dialysis, liver transplantation, and cancer treatment. Gilead decided to respond to this desperation by charging a $1000 a pill, essentially saying “pay or die.” And many insurers and governments paid, thus the $10 billion in the first year.

Governments began doing the calculations and realized that these prices were completely affordable – except for the sickest – and thus state and national governments, even in the US, began to ration the drug, providng treatment only for the sickest. At this point, another company, AbbVie came to the market and nearly matched the Gilead price, but then both companies entered into the next phase of their cynical pricing strategy. They began to negotiate secret deals with larger insurers to discount the price of their Hep C medicines but only if the insurers would expand the number of patients treatment – essentially the patients most next at risk. Although these prices have not been publicly announced, based on precedent they are likely to be in the 30% range.

Suddenly, the market is expanding again even as it is being “split” between oligopolists who indirectly collude on high, quantity-based “discount” prices. Even with these discount prices, all Hep C patients will not get treatment – there will still be rationing, but the patients closest to serious disease progression will finally get a cure. However, the majority of patients who are undetected and asymptomatic will still be untreated and therefore still be transmitting the disease to a new population of future Gilead/AbbVie customers.

Looking into the future, one can anticipate that Gilead and other companies will continue to gradually reduce their hyper-inflated prices in exchange to access to more customers – and more profits. However, they will not offer an elimination price, an affordable price for the medicine that will spark a huge increase in testing, connection to care, and immediate treatment. After all, a stead crop of new “customers” makes business sense in the amoral world of corporate unaccountability.

Gilead is following a similar, equally cynical differential pricing strategy in low- and middle-income countries. It is basically negotiating, largely in secret, and charging much higher prices in upper-middle income countries like Brazil and Turkey and somewhat lower prices in certain poorer and higher prevalence countries like Egypt and India. Once again Gilead hopes that payers – patients and governments (there are few insurers) – will pay these high, “discount” prices for the sickest and wealthiest patients. These profits will be reaped for several years, even in countries where Gilead has granted a voluntary license to generic producers, given it will take time for those producers to come to market. Like in the US and Europe, Gilead will probably lower prices somewhat to gain access to a larger group of patients treated largely in the public sector. In this regard, it is important to note that Gilead has granted access via its voluntary license to only to 91 countries, leaving many of the highest burden middle-income countries outside the licensed territories. This license also keeps the more lucrative private sector to Gilead alone.

So, in sum, Gilead has devised a strategy to extract maximum profits from markets based on a geographic and time-lapse segmentation strategy. It earns the highest profits it can from the sickest people in high and middle-income countries first, then lowers prices slightly over time to gain access to an expanding pool of slightly less sick patients. Even when other companies like AbbVie enter the market, there are plenty of oligopolist profits to share when there are 150 million-plus people living with Hep C globally.

This is where anti-diversion policies come in – they come in to protect these geographic and time-series market segments and future super profits. Gilead knows that the medicines can be made cheaply and that there are huge incentives throughout the supply chain for middlemen to try to divert cheaper medicines to richer markets. Gilead knows that there are sick, but presently excluded patients who would rather get treated earlier than only after they become seriously ill. Its executives know that there are people who will want to be treated to prevent transmission to others. They know that rationing medicines keep waiting lists of people who might buy medicines more cheaply if they could – they might even be willing to travel to other countries for cheaper supplies or they might be willing to buy through less formal channels. These health-related patient incentives – incentives created by cynically pricing medicines that create rationing and wait lists – in turn create incentives for diversion on a wholesale and even retail scale. Accordingly, Gilead locks down the supply chain, especially in low- and middle- income countries, even to the level of coercing patients to act as the final stop-gap against retail diversion.

If governments go along with this staged, cynical price extortion and unethical treatment of patients, shame on them. The US can’t afford this strategy, nor can the EU, let alone low- and middle-income countries. Rationing of Hep C cures is already happening in the US, the UK, and elsewhere. Instead of moving toward Hep C elimination, we are plodding blindly towards a $100 billion rip-off of patients, taxpayers, and governments around the world. We are allowing companies to ride roughshod over patients’ rights to health and to undermine the public health imperative of disease eradication.

Paradoxically, when countries and insurers do decide that they have been “forced” to ration, the press and some patient groups blame the government instead of demanding government action to defeat this unconscionable strategy. They should be demanding that there be clinical trials to find the best treatment combination regardless of whether the medicines come from different companies. They and activists should be demanding real price drops, real price controls, and ultimately worldwide generic production of the best fixed-dose combination treatments that can end the Hep C pandemic by curing everyone with the disease. Don’t blame the governments and force taxpayers to create even more obscene pharmaceutical wealth – make them act in the public interest to ensure access to all at an affordable, disease-ending price.


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