WTO Should Exempt Countries From TRIPS Until They Are No Longer "Least Developed"

Promoting health, development, education, and environmental consideration 

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Haiti recently submitted, on behalf of the Least Developed Country (LDC) members of the World Trade Organization (WTO), a request to extend the transition period for LDCs to implement the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement.The TRIPS Agreement sets out minimum standards for intellectual property (IP) protection and enforcement that all WTO Members must implement in their national laws. When it was signed TRIPS granted transition periods for both developing and Least Developed Countries.  LDCs initial transition period was to have expired in 2005, but an extension was granted in 2005 until June 30, 2013.  The Haiti proposal would simply extend this transition period until countries “graduate” from LDC status—a proposal the TRIPS Council is obliged to pass according to WTO rules.

The “Least Developed Country” Category

 LDCs are the most impoverished and economically vulnerable countries—officially classified by the United Nations based on three factors: lowest income (GNI $ 1,190 per capita); poor human development indicators of nutrition, health, and literacy; and economic vulnerability.  LDCs include countries such as Haiti, Bangladesh, and Zambia. While they comprise 880 million people, one eighth of the world’s population, they subsist on 0.9% of the world total GDP.  The transition period in the TRIPS Agreement was to protect LDCs in need of increased assistance, investment, and technology transfer from the burdens of granting and enforcing IP monopolies in order to enable them to “graduate” (as Botswana and Cape Verde have); the global goal is for at least half of LDCs to graduate in the next 10 years.

 

TRIPS & LDCs

The adoption of Intellectual Property Rules (IPRs) by developing countries means that they are no longer free to make use of technologies developed in wealthy countries without the permission of right holders. Nevertheless, developing countries were convinced to join the WTO because they were promised “special and differential treatment” that included increased investment and technology transfer from rich countries to LDCs under TRIPS. Article 66.1 of TRIPS provided for an initial ten-year extendable timeframe for them to implement TRIPS. It further provided that LDCs would be accorded extensions to this original transition period upon a “duly motivated request.” Article 66.2 requires rich countries to support LDCs in obtaining technologies they need for development and economic growth—an obligation that most observers say has not been met.

In 2002, the LDCs were granted an extended waiver based on the “Doha Declaration on TRIPS and Public Health” saying they were not obliged to implement or to enforce patents and test data for pharmaceutical products until January 2016. Recognizing that LDCs were still likely to be negatively impacted by the full scope of TRIPS, a waiver for the full TRIPS agreement was granted in 2005 that extends throughJune 2013.  If it is not extended, LDCs will be under an immediate obligation to implement TRIPS (pharmaceuticals in a few years). The short term and long-term impacts of such an obligation would be harmful to development.

The New LDC Request

LDCs submitted a proposal at the November 2012 TRIPS Council meeting, requesting that all LDCs be provided with a full waiver on TRIPS implementation until they graduate from the LDC status. This would include giving LDCs the right to eliminate any IP provisions that had already been implemented, which is important for countries that find that old IP rules—some dating from the colonial era—are inhibiting development. If agreed, the proposal would also extend the waiver issued to LDCs with regard to pharmaceutical-related provisions.

Wealthy countries have not taken a public position on the LDC request, though there are signs that certain developed countries will refuse to agree with the LDC request or may require onerous conditions, limited timeframe, etc.. In March 2013, the TRIPS Council will meet to take up the LDC group proposal. Civil society groups from across the world including Oxfam, Health GAP, Doctors Without Borders, Knowledge Ecology Intl., Public Citizen, and Third World Network have called on WTO Members to approve the LDC request in its current form.

KEY ISSUES AT STAKE

Access to affordable medicines.  LDCs, by definition, face substantial health problems—often high rates of HIV and malaria, weak health systems, and massively insufficient health budgets. Implementation of TRIPS IP rules, as well as of rules that exceed TRIPS (“TRIPS-plus”) drives up the price of medicines by allowing key medicines to be patented—putting life-saving technology out of the reach of patients and national health programs. IP rules could also undermine nascent industries in LDCs. Some LDCs are working with foreign partners to upgrade their domestic pharmaceutical capacities; in Bangladesh and Uganda, for example, the Indian generics firm Cipla has set up manufacturing facilities for quality, low-cost medicines that could be used domestically, or exported to other developing countries. Such activities could be interrupted if patents can be filed in those countries.

Access to educational resources.  Although the need for affordable medicines is well known globally, LDCs also need access to other important public goods and technologies that are frequently blocked by IP.  For example, students in LDCs need access to affordable educational resources and such access is routinely blocked by copyrights owned by textbook publishers.  Similarly, LDC researchers need access to the latest scientific information to adapt new technologies and to pioneer innovations meeting unmet local needs. Software, textbooks, and academic journals are key items where copyright is a determining factor in pricing and access. For instance, a reasonable selection of academic journals is far beyond the purchasing budgets of university libraries in most LDCs.

Access to agricultural goods. The rights of small-scale farmers that dominate LDCs agriculture system can also be hampered as IP can hinder their traditional farming practices by preventing free exchange and use of protected seeds and varieties. IP systems for plant variety protection can also hinder access to affordable agricultural inputs, increase erosion of agro-biodiversity, which in turn affects food security.   

Access to Green Technology. Many of the break-through green technologies that are energy-saving and that control or mitigate climate change are unavailable in LDCs. Further, many of them are not adapted for use in low-resource and tropical settings and patents will stand in the way of local companies and non-profits adapting them where they’re needed most.  For LDCs to be able to deal with the climate challenges effectively, they will need prompt access to affordable technologies, which requires policy space to overcome IP barriers.

TRIPS hinders development in the case of LDCs. Many economists have documented how pushing LDCs to adopt TRIPS is unlikely to support development—indeed today’s wealthy countries largely built their technological capacity by copying and experimenting with proprietary technologies dev

eloped elsewhere without the barrier of overly broad IPRs. In order for IP regimes to have any role in stimulating investment and R&D, a technological and knowledge base must first be built and there must be a functioning market. Such conditions do not yet exist in most LDCs. LDCs should have policy space to access to the same path to development that was previously used by rich countries including the U.S.

Don’t LDCs already have IP systems? Many LDCs have implemented parts of the TRIPS agreement voluntarily—some as a simple legacy of colonial-era laws and others through conscious choice. Under the exception LDCs remain free to adopt whatever IP provisions they find them appropriate. But LDCs should not be forced to adopt the whole TRIPS system immediately—they need the space to prioritize development. LDCs should also not be forced to keep in place any existing laws that prove to be a barrier to development—which wealthy countries have demanded in the past in exchange for the 2006-2013 extension.

Instituting TRIPS-compliant IP systems would be very expensive for LDCs. TRIPS implementation costs countries an initial outlay of anywhere between USD 250K and USD 1m, plus annual expenditures of as much as USD 1m.[1] LDCs should be directing their scarce economic resources towards more pressing regulatory and other essential needs. For example, LDCs could achieve a greater return on their spending by directing resources towards improvement of the regulatory systems that ensure medicine quality and safety, or the education system.

 



[1] http://www.iprcommission.org/papers/text/final_report/chapter7htmfinal.htm  


President Obama Says One Thing, Funds Another

ACTION ALERT 

In his State of the Union address, President Obama layed out his vision for the next four years, and he recognized the importance of realizing an AIDS free generation. Despite this recognition in his SOTU, he is seriously considering slashing funding to fight global AIDS in his Fiscal Year 2014 budget proposal. We need your help to make sure that lifesaving global health programs don't get cut! 

Call the White House to demand that AIDS funding for PEPFAR and the Global Fund is increased in the President's budget proposal. President Obama will make final decisions on his fiscal year 2014 budget request in the coming days - including the final numbers for the Presidents Emergency Plan for AIDS Relief and the Global Fund to Fight AIDS, TB, and Malaria. 

Call and Tweet the President TODAY!

To call the white house: call the White House switchboard at 202-456-1111

Call In Script: 

My name is ---------- and I'm calling to urge President Obama to increase funding for the President's Emergency Plan for AIDS Relief and the Global Fund in his fiscal year 2014 budget. The President needs to protect and expand PEPFAR at $5.027 billion, and contribute to the Global Fund at $2.0 billion in FY 2014. We can end the AIDS pandemic if the President commits to funding global AIDS programs at these levels. I hope that President Obama will choose to be the President who ends AIDS."

To Tweet the White House: 

@whitehouse Fund the end of AIDS. Increase funding to PEPFAR and Global Fund. #EndAIDS #dontcutnow 

More Info: 

The President's budget will have a critical impact on global health financing this year. With a Global Fund replenishment conference set for fall 2013, the President's request level will send an important signal to other donors. A low budget request from the President for the Global Fund will influence the funding levels of other donor countries for the next three years. 

As the largest program focused on beginning to end the AIDS pandemic, PEPFAR plays a vital role in tackling AIDS. The new PEPFAR Blueprint for an AIDS Free Generation calls for rapid scale up of core AIDS services, including treatment, which will lead to accelerated declines in HIV infection and mortality

Both of these programs must be funded adequately for us to begin to end the AIDS pandemic - we cannot cut PEPFAR to fund the Global Fund. Robbing Peter to pay Paul has never done any good. 

We cannot turn away from the opportunity to end AIDS now. Global health funding is only one quarter of one percent of the federal budget. We can afford to increase investments in global health even in difficult fiscal times. 

Please call the White House today. 


Johnson and Johnson Non-Assert Agreement on Darunavir - More Questions than Answers

by Professor Brook K. Baker, Senior Policy Analyst

Janssen Pharmaceutical Company, an affiliate of Johnson & Johnson, has just announced its intent "not to enforce its patent for quality, medically acceptable generic versions" of its protease inhibitor, darunavir (brandname Prezista) for sales in sub-Saharan Africa and in UN-defined Least Developed Countries.  That restriction gives this so-called "non-assert" commitment a geographical scope of just 64 countries. 

Janssen's publicity release is intended to give it a reputational boost on the eve of World AIDS Day, but there are multiple deficiencies and ambiguities in its announcement.  Although any increased access to generic darunavir of assured quality is desirable, Janssen has given far less than what is required:

  1. The geographical scope is woefully inadequate because it excludes treatment-experienced patients in all non-African middle-income countries who are much more likely to need second- and third-line medicines – like darunavir – because they've developed treatment resistance to other regimens over time.  The vast majority of patients in developing countries who are treatment experienced and who need second- and third-line regimens live in middle-income countries in Latin America and Southeast Asia where patients first had government supported access to treatment, e.g., Brazil and Thailand.  Excluding these middle-income countries not only leaves poor patients in middle-income countries subject to the pricing whims of Janssen, but it also shrinks the market of darunavir-eligible patients.  Accordingly, the resulting consumer demand will be too small to incentivize robust generic competition and economies-of-scale will be much slower to develop – resulting in higher prices and fewer sources even in the covered territories.

  2. The "generosity" of the geographical scope is misleading, because it appears that Janssen has no patent claims whatsoever in the vast majority of countries covered by the non-assert commitment.  A search of the Medicines Patent Pool patent database reveals a patent for a darunavir pseudopolymorph in ARIPO (Botswana, Gambia, Ghana, Kenya, Lesotho, Malawi, Mozambique, Sierra Leone, Sudan, Swaziland, Uganda, United Republic of Tanzania, Zambia and Zimbabwe) and in South Africa only.  Of course, there may be additional patents that have been filed, but to date Janssen, like virtually every other Big Pharma company has been unwilling to publicly disclose their existing patent landscape in developing countries, making it very hard to generic competitors, governments, or other interested parties to ascertain patent status.

  3. The prices currently charged in excluded, non-African middle-income countries can be quite outrageous.  According to MSF and Global Fund data available at http://www.theglobalfund.org/en/procurement/pqr/,  prices being paid by some excluded countries are as follows:
    Brazil:  USD 6,037 ppy
    Georgia: USD 8468 ppy
    Moldova: USD 9187 ppy
    Jamaica: USD 6570 ppy
    West Bank and Gaza: USD 5900 ppy
    Thailand: USD 4854 ppy 
    Of course, these prices are for one component of triple-therapy only, so the aggregate cost of a full second- or third-line regimen in these countries could be many times higher.

  4. Janssen has not clarified whether the non-assert commitment is absolute and for the duration of any relevant patent claim or whether the commitment could be revoked.  In press coverage on the commitment, Janssen has already indicated that there are circumstances where it would assert its patent rights if - in its unilateral judgment - darunavir was being produced in sub-optimal formulations or dosages.  This would leave little incentive for generic companies to try to optimize chemical form, formulations or dosages since the rug could be pulled out from under it both with respect to the original investments needed to produce darunavir at all and with respect to the additional expenses incurred to "optimize" the medicine.

  5. Janssen has not clarified whether it will permit co-formulation with other medicines, though as a protease inhibitor darunavir needs to be combined with a protease booster such as ritonavir.  In addition, darunavir should, if possible, be co-formulated with the other medicines to produce a fully potent fixed-dose combination.

  6. Janssen has not clarified where the darunavir for covered countries can be lawfully produced.  There is a weak and opposed divisional claim for a combination with ritonavir in India and Janssen is pursuing an appeal of a denial of its patent for darunavir as a stand alone product.  Thus it is not completely clear in the long run that India companies could produce a darunavir standalone or a ritonavir/darunavir combo for export to SSA and LDCs.  Since the major generics of assured quality ARVs are India-based, it would be highly desirable if all generics producers of assured quality, including Indian, were permitted to produce for export.

  7. Janssen has not taken adequate steps to ensure registration of darunavir in the covered territories despite ample time to do so.  The absence of such pre-existing registration negatively impact the cost, timeliness, and ease of registering a generic equivalent.  Many of the covered territories will allow fast-track registration of generic equivalents, but only if the originator's dossier has already been approved.  In the same vein, Janssen has failed to clarify whether it will assist in the generic registration process, and whether it will waive any data rights or patent-registration linkage rights in may have in any of the covered territories.

  8. Janssen has not clarified what if any restrictions it might place on "qualified" generics, e.g., with respect to their right to oppose patent applications or challenge granted patents or to be licensees of compulsory licenses granted in non-territories.  There may well be other non-disclosed terms that are problematic.

 

The ideal voluntary license is one that is open to all qualified generic producers and has a territorial reach of all developing countries.  The closest to that ideal at present is the Medicines Patent Pool, which has the added advantage of transparency about licenses and efficiency in acting as a clearinghouse for multiple licenses on diverse products.  However, for the second time, Johnson & Johnson has tried to cover its tracks in boycotting the MPP by saying "we feel better doing it alone."  Indeed, J&J has stepped back from its earlier 2011 voluntary license because the geographical scope on this second commitment is smaller than what it promised a year ago for rilpirivine.   

 

In sum, the limitations on the Johnson & Johnson/Janssen non-assert commitment make it a gift box without the gift on the even of World AIDS Day.  Yes, over the long haul, as demand in the covered territories builds, a viable generic market may slowly develop and generic companies may get through the arduous registration process unassisted.  But, many other patients in middle-income countries and in underserved SSA and LD countries will go without the life-enhancing and life-saving benefits of darunavir in the meantime.  Scarce resources will be wasted on overpriced brandname Prezista or patients will go without.  This frankly is not good enough.


A small sales tax on Wall Street reaps big rewards

One has to wonder if Paul Schott Stevens’ “Don’t enact financial transaction taxes,” December 20, 2012, is more about protecting the turf of billion dollar Wall Street banks and enormous investment firms, including their lucrative mutual fund businesses, than protecting the average people who invest and save.  

In his column, Stevens argues against the enactment of a financial transaction tax (FTT) in the U.S., as follows: “[A]ny benefits … would be dwarfed by the harm it would inflict on America’s savers, particularly its 90 million mutual fund shareholders.” Stevens is president and CEO, Investment Company Institute (ICI), a trade association comprised of more than 7,500 mutual funds, with names like Wells Fargo CoreBuilder and Morgan Stanley Global, as well as other investment entities.

What’s raised Stevens’ ire of late is legislation introduced in Congress in September by Rep. Keith Ellison (D-Minn.), H.R. 6411, “The Inclusive Prosperity Act,” an FTT now with 16 co-sponsors and the backing of the Robin Hood Tax Campaign, a coalition in the U.S. of more than 125 labor, religious, consumer, health advocacy and other groups, with combined memberships in the many millions. 

Scores of leading economists and businessmen support passage of an FTT, as they, too, see it as a legitimate way to raise revenue. Backers include Bill Gates, Warren Buffett, David Stockman, Nobel Prize-winning economists Joseph Stiglitz and Paul Krugman, to name several.

The fact is that for the majority of Americans Ellison’s FTT should cost nothing, hence Stevens’ principal contention that FTTs “will produce a constant drag on shareholder returns… [and] make it all the harder for fund investors to achieve retirement security and other goals” is very misleading. 

HR 6411 is a tiny tax; it is 50 cents per $100 on stock trades - that’s $50 on a stock trade of $10,000 - and even lesser rates on bonds, derivatives and currency dealings. Here’s what’s critical, and conspicuously absent from Stevens’ column: the facility or broker is levied the tax, not the investor. Thus Stevens’ argument that an FTT constitutes double, triple, even quadruple taxation is way off base.  

Here’s the rub for investors: The sales tax is paid by the investor only if the mutual fund passes it along. We would urge the mutual funds Stevens represents not to pass along this small sales tax to the very savers whose interests Stevens says he seeks to guard.

The point here is that mutual fund profits are more than ample to absorb this very tiny tax. Just look at the billions in wealth gathered by top mutual fund managers. According to Forbes, Fidelity Investments’ chairman is worth $11 billion; Charles Schwab’s wealth is approaching $5 billion, some attributable to fund activity; and Charles Johnson, chairman of Franklin Resources, has made $4 billion from his mutual fund business.

As a final protection to investors, per the Ellison law Americans with incomes of up to $50,000, $75,000 for households, would be rebated any FTT paid.   We do not share Stevens’ concern that a tax rebate is an unworkable administrative burden, as credits and rebates are hardly new concepts.

Stevens’ worries extend overseas, where the European Commission, he points out, is moving forward on a unified FTT scheme, with the support of 11 member countries. Forty countries now have some FTT in place. As for the U.K. and its decision to stay out of the EC scheme, we would reiterate that a tax on stock trades – the Stamp Tax - is in place in that nation and the London Stock Exchange remains one of the biggest in the world — even with an FTT on stock transactions.

A unified scheme in Europe and around the world, at all the major exchanges, avoids capital flight. So when Stevens raises that issue in the context of Sweden a generation ago, he seems behind the times.

In France, cautions Stevens, “large players are able to skirt the tax using an array of techniques, leaving small investors to bear the burden.” Unlike many taxes, Ellison’s proposal is difficult to evade because the tax is collected at the point of transaction and title is withheld until marked paid. With automation, trades are easy to track and tax collected. 

Stevens shares our concern that “high frequency trading” needs regulation, but he believes an FTT  “seems an awfully blunt tool for achieving that goal.”  But the same top economists who support the FTT cite its usefulness in helping curb these destabilizing trading practices. 

By one estimate, for every gallon of gasoline purchased in the U.S. today, $1 of cost can be attributed to speculative activity in the markets. We think that’s a national shame. An FTT can help to lower levels of speculative trading, according to numerous studies.  

To the  millions of Americans who are members of organizations calling for an FTT, some of whom are also mutual fund investors, the Ellison bill’s goal of raising an expected $350 billion annually serves an overwhelming national need. The FTT would expand state and federal investments in communities still very much experiencing harm from the 2008 financial collapse. The Inclusive Prosperity Act identifies job creation, the rebuilding of infrastructure, investment in transportation, education and healthcare, and environmental protection among its goals. It would also direct funds to international research and treatment of HIV/AIDS and to address climate change. 

FTT supporters believe there is no time to delay, as the enduring harm faced by countless communities drags America deeper into poverty and forestalls a real recovery.

Given the amounts our Treasury expended on Wall Street bailouts, not to mention substantial profits racked up in the finance sector today, an FTT at these small rates and under these well-defined conditions seems eminently fair. Wall Street’s debt to Main Street is past due.

Jennifer Flynn is managing director, Health GAP, a founding member of the U.S. Robin Hood Tax Campaign.

Source: 
http://thehill.com/blogs/congress-blog/economy-a-budget/276119-a-small-sales-tax-on-wall-stree-reaps-big-rewards


Health GAP's 2012 Redux: Help us, help you...

We began 2012 with a bold commitment from President Obama to “create an AIDS free generation”.  This vision for policy was rooted in science and was heralded by advocates.  This new direction towards an AIDS policy deeply rooted in science was strongly advocated by Health GAP.  The campaign to get us there consisted of a series of small, seemingly disparate, actions which enabled us to slowly build key relationships, power in crucial legislative districts and a strong reputation with media and advocacy organizations.  This combination of an “inside and outside” strategy is Health GAP’s formula for success and we are writing to ask you to support our work in 2013.

Here are some of the highlights that Health GAP achieved in 2012:

  • Health GAP spearheaded the We Can End AIDS coalition which organized tens of thousands of people living with AIDS for a massive mobilization in Washington, DC during the International AIDS Conference directly confronting decision makers on their global AIDS response and setting the tone for the conference.
  • Health GAP is leading the U.S. Robin Hood Tax campaign to demand a tiny tax on big banks that could raise enough money to end AIDS.  We launched the campaign with a celebrity filled video.  Within a few months, the campaign successfully advocated for the introduction of bold legislation that could generate up to $350 billion per year to fund our social safety net.  (For more info goto www.robinhoodtax.org)
  • With the recognition that no social justice movement has ever been successful without a strong youth base, our student organization, the Student Global AIDS Campaign launched the Positive Students Network in an effort to intentionally organize HIV+ youth in high school and college campuses across the country.  (For more info, go to www.studentglobalaidscampaign.org)
  • Health GAP Uganda worked with SumOfUs.org to develop a petition targeting Pepsi, one of Uganda’s largest employers, to speak out against the proposed homophobic legislation that calls for the death penalty of LGBTI generating over 100,000 signatures.
  • Thanks in part to the advocacy of Health GAP Kenya and our partners, Kenya has increased the investment in their domestic health budget by 55% and is the only high-prevalence/low-income country to get one person on treatment for every new infection.
  • Health GAP, working with QUEEROCRACY and ACT UP Philadelphia, “exposed” the “naked” truth about the proposed dramatic budget cuts that could result in the death of 62,000 people living with AIDS.  Our work generated an unprecedented amount of media attention.  See http://www.cnn.com/video/#/video/bestoftv/2012/11/28/exp-point-protestors-boehner.cnn

Health GAP is a small organization with almost no overhead.  Your donation is tax exempt and goes directly to support our effective advocacy.  If you can, please donate today and join our movement:  www.healthgap.org.  Thank you for your time, consideration and commitment to ending the AIDS pandemic.


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