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Trade, Intellectual Property Rights and Patents

2007 Victories:  Fewer Deaths and More Compulsory Licenses!

Activists have long claimed that access to medicines campaigns set precedents that have a snowball effect. What we are now seeing, given India's victory against Novartis in the drug company's challenge to section 3d of the India Patent Act and given Thailand's highly publicized campaign to issue compulsory licenses on both AIDS and heart disease medicines, is a new wave of patent withdrawals and a growing wave of compulsory licenses. This reciprocal wave action creates a wider opening for continuing access to newer and lower costs medicines. But the promise of this opening will only be realized if more countries amend their patent acts to take advantage of the TRIPS-compliant, definitional flexibilities that India has enacted and if more countries use the TRIPS-compliant flexibilities for issuing compulsory licenses for generic medicines that Thailand has used.

 

Patent victories

 

In the summer of 2006, following massive August 7 protests in Bangalore and Bangkok, GlaxoSmithKline withdrew its patent application for lamivudine/zidovudine (Combivir or Combid), an important first-line combination antiretroviral, both in India and, perhaps even more significantly, in Thailand. The withdrawal in India was clearly obligatory under India's new Patent Act 2005, which has strict standards preventing patenting of mere combinations of existing medicines, and was relatively straightforward, even under Thailand's easier, more "Westernized" patenting standards. Combivir was a simple fixed-dose combination of two earlier discovered drugs and involved neither newness nor an inventive step. The principal new "ingredient" in the combination was silicone - a trivial addition graphically represented by Indian demonstrators when they dumped sand in front of the Glaxo office. The anti-Combid victory in Thailand was reminiscent of an earlier activist victory in 2004 where a robust civil society movement forced Bristol Myers Squibb to abandon its patent on ddi.

 

Although Glaxo saw the writing on the wall, Novartis did not and tried to mount a TRIPS and constitutional challenge to section 3d of the Indian Act. Once again protestors mounted an international campaign, and good lawyering by the Lawyers Collective and others resulted in a resounding defeat for Novartis in the Chennai High Court, in August, when all of Novartis's efforts to undermine India 's strict standards for patentability were defeated.

 

At the time, activists claimed that the Novartis case had critical implications for access to medicines, certainly for AIDS drugs, but for other medicines as well. There were thousands of patent applications waiting in the India 1995-2005 patent "mailbox," the vast majority of which involved minor tweaks on pre-1995 medicines. If Novartis had won, many of those patent applications would have been pursued and many might have succeeded. However, with Novartis's defeat, the pharmaceutical industry began to strategically review its mailbox filings, and its new filings as well, to weed out the clearly unmeritorious applications.

 

The most recent example is further withdrawals by GlaxoSmithKline of two ARV patent applications, on Abacavir and Trizivir (GSK drops claims on two AIDS medicines, The Economic Times, 7 Dec 2007). Sources report that Glaxo's decision to withdraw those applications was in response to Novartis's loss and was undertaken to avoid a patent-defeat precedent that might have undermined its attempts to pursue patent claims in countries with weaker patent standards.

 

The growing evidence of India 's success in stopping the flow of patent applications on trivial variations of existing products should lend courage to activists and patent reformers in other countries. India has clearly set a new and defensible standard for patenting only truly innovative pharmaceutical products. The Philippines parliament is already considering a statutory amendment in line with section 3d of the Indian Act, but the momentum should not stop there. Other countries can lighten the load on their under-resourced patent offices and ensure high standards of patentability for medicines by taking the route forged by India .

 

The Indian success has also been reinforced by the availability of pre-grant opposition procedures, which allow consumer groups, generic companies, and IP specialists to intervene and challenge weak patent applications. There are already fifteen pre-grant oppositions in India concerning AIDS medicines and the number is likely to grow as public interest groups begin to appreciate the importance of stopping 90-95% of the patent applications on pharmaceutical patents that can be rejected under the Indian standard even though they sail through the U.S. patent office.

 

Compulsory licensing victories

 

Activists in Thailand have waged a near decade-long campaign to convince the Thai government to issue compulsory licenses on AIDS medicines. Although the first effort in 1999 concerning ddi was unsuccessful because of fears of U.S. trade retaliation, activists persisted and new leadership in the Thai Health Department issued compulsory licenses on efavirenz, lopinavir/ritonavir, and clopidrogel in late 2006 and early 2007. Of course, Thailand was not the first developing country to issue compulsory licenses on AIDS medicines. Malaysia and Indonesia had done so earlier for first-line regimens, and over half a dozen countries had done so in Africa as well. However, in terms of middle-income countries with large populations living with HIV/AIDS, Thailand was the first to issue licenses on higher-cost, second-line medicines. Brazil had threatened such licenses, but in the end had improvidently settled for price concessions instead.

 

The impact of Thailand 's leadership is immediately apparent. Shortly after Thailand 's bold move, Brazil issued a compulsory license on efavirenz on May 4. Indonesia did so even earlier, in March of 2007, though, unlike Brazil , its license drew little attention from Big Pharma, the USTR, or the army of right-wing think tanks that have mounted a global disinformation campaign about the legality and propriety of compulsory licenses. Emboldened by Thailand , Indonesia is considering additional licenses on tenofovir, videx, and lopinavir/ritonavir. The proactive Ministry of Health in Thailand is also continuing to weigh additional government use C.L.s on four cancer medicines and up to 20 additional products for treating hypertension, diabetes, and hyperlipideamia. Lawyers in South Africa have petitioned the Competition Commission to obtain additional licenses on efavirenz, both to promote competition but also to allow co-formulation of fixed-dose combinations.

 

Most of the licenses thus far have been issued for government use. This form of licensing has certain advantages because it is widely practiced in rich countries, including the U.S. , because it obviates the need for prior negotiations with the drug company, and because it reserves the private sector to the patent holder's monopoly control, undermining claims that all profits are foregone and that research and development will be undermined.

 

However, there are also some drawbacks to government use licenses, especially when one considers how much pressure has been brought to bear on Thailand even though it carved out a private-sector monopoly reserve for Big Pharma. The first drawback, not so apparent in Thailand as perhaps in other countries, is that many poor people cannot access medicines in public sector pharmacies, which often experience stock-outs or otherwise fail to carry essential medicines. These patients must therefore rely on private sector pharmacies where monopoly pricing prevails. Thus, in countries where high disease burdens persist and where major portions of the population are de facto dependent on private-sector pharmacies, government use licenses may be an imperfect solution to access on the ground. The second drawback is that having two pricing regimes in the same country, high private-sector prices and low public-sector prices, encourages "arbitrage," or more accurately theft and resale of public sector medicines to private sector consumers. Third, avoiding negotiations may be overrated since governments can set short time limits for such negotiations and insist on strict pro-access terms whether by regulation or negotiation demands.

 

The impact of Thailand 's compulsory licensing victories will be lessened if other developing countries do not follow suit. In fact, a better scenario will arise when developing countries cooperate more vigorously in the selection and timing of compulsory licenses. Generic producers are most likely to invest the $1-$1.5 million dollars needed to formulate a generic equivalent if they can see a sizeable market in developing countries that aggregate their collective demand. In addition, with larger, more secure, and more predictable markets, more producers will enter the market and more producers will manufacture at efficient economies of scale. The combination of competition and efficiency will result in lower prices and more secure and redundant sources of supply.

 

The strongest way for countries to cooperate may well be through creation of patent pools that allow the collective management of both compulsory and voluntary licenses (negotiations on both in- and out-licenses). Alternatively, developing countries could form regional "buying groups" and/or work intensively with the Clinton Foundation (at least for ARVs). However, in order to be able to take advantage of their South-South strength, countries will need to be more proactive both in amending their patent legislation to allow maximum use of TRIPS-compliant flexibilities and in utilizing those flexibilities to actually issue compulsory licenses.

 

The current, countervailing strategy of Big Pharma, besides USTR intimidation and even product withdrawals, seems to be the use of strategic price discounts and restrictive licensing. Although these concessions look tempting in the short-run - since they reduce the treat of trade sanction and product embargoes - they are futile in the long run since they are Pharma controlled and because they deter generic entry. An even greater danger is presented by so-called free trade agreements where the United States attempts to impose TRIPS-plus intellectual property protections that hamper countries ability to ensure access to medicines for all.

 

Conclusion

 

The space that has been created by activist-backed defense of India 's strict patent standards and by activist-prompted issuance of multiple compulsory licenses in Thailand is one of the most promising outcomes of AIDS advocacy in 2007. Hard fought precedents have been won, but enemies in Big Pharma and in the U.S. government are hard at work plotting a reversal of fortune. It is only by building on these recent victories - by rejecting more patents, by issuing more compulsory licenses, and by opposing TRIPS-plus IPR provisions - that activists and pro-access forces in developing countries can create a momentum that cannot be stopped. Standing still is not an option.

 

Professor Brook K. Baker, Health GAP

Northeastern U. School of Law

Program on Human Rights and the Global Economy

400 Huntington Ave.

Boston , MA 02115

617-373-3217 (office)

617-259-0760 (cell)

 

U.S. FREE TRADE AGREEMENTS

US-SACU FREE TRADE ARGREEMENT THREATENS ACCESS TO MEDICINES IN SOUTHERN AFRICA

On November 4, 2002, United States Trade Representative Robert B. Zoellick formally notified Congressional leaders of the Administration's intent to initiate negotiations for a free trade agreement with the nations of the South African Customs Union: Botswana, Lesotho, Namibia, South Africa and Swaziland. With respect to intellectual property rights, the negotiations would:

    • Seek to establish standards that reflect a standard of protection similar to that found in U.S. law and that build on the foundations established in the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPs Agreement) and other international intellectual property agreements, such as the World Intellectual Property Organization Copyright Treaty and Performances and Phonograms Treaty, and the Patent Cooperation Treaty.
    • Establish commitments for SACU countries to strengthen significantly their domestic enforcement procedures, such as by ensuring that government agencies may initiate criminal proceedings on their own initiative and seize suspected pirated and counterfeit goods, equipment used to make or transmit these goods, and documentary evidence. Seek to strengthen measures in SACU countries that provide for compensation of right holders for infringements of intellectual property rights and to provide for criminal penalties under the laws of SACU countries that are sufficient to have a deterrent effect on piracy and counterfeiting.

    To meet "standards of protection similar to that found in U.S. law," SACU nations would be required to limit compulsory licenses to national emergencies or to governmental, non-commercial use only. They would be required to bar parallel trade, to extend patent monopolies for administrative delays, and to link drug registration rights to patent status. Finally these nations would be required to enhance protections for clinical trial testing data and to adopt criminal enforcement for patent violations, including improvidently granted compulsory licenses. In sum, the proposed negotiation objectives would completely eviscerate the Doha flexibilities, dramatically increase IP protection, and shamefully reduce access to more affordable generic products.

    More particularly, in the context of the production-for-export problem left unresolved in paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, the SACU negotiations could be disastrous. For example, in another regional trade negotiation, the Free Trade Area of the Americas, the U.S. is the presumed sponsor of a troubling bracketed provision that would prohibit compulsory licensing for export (8.64 (6) (b)). If this clause were imposed on SACU nations, then South Africa would be prevented from being a supplier of standard quality generic medicines to other SACU nations or to the subcontinent as a whole. Since regional and international production-for-export of generic medicines is necessary for countries with little or no efficient manufacturing capacity, excluding one of the few technically compotent Africa producers would be a huge blow to sourcing affordable AIDS medicines. Thus, any effort by U.S. SACU negotiators to sabotage pro-public health interpretations of TRIPS that would otherwise permit the most rational, pro-public health solution to countries obtaining exported, low-cost medicines is morally and legally unacceptable.

    These intellectual property objectives in SACU negotiations directly violate the principal negotiating objectives in the Trade Act of 2002 which requires the U.S. " to respect the Declaration on the TRIPS Agreement and Public Health, adopted by the World Trade Organization at the Fourth Ministerial Conference at Doha, Qatar on November 14, 2001." 19 U.S.C. ¤ 3802(b)(4)(C). Similarly, by seeking TRIPS-plus provisions found in U.S. law, the U.S. Trade Representative is also directly violating Executive Order 13155, which in relevant part, reads:

      (a) In administering sections 301-310 of the Trade Act of 1974, the United States shall not seek, through negotiation or otherwise, the revocation or revision of any intellectual property law or policy of a beneficiary sub-Saharan African country, as determined by the President, that regulates HIV/AIDS pharmaceuticals or medical technologies if the law or policy of the country: (1) promotes access to HIV/AIDS pharmaceuticals or medical technologies for affected populations in that country; and (2) provides adequate and effective intellectual property protection consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) referred to in section 101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15)).
"Free Trade" costs lives: access to medicines, the AIDS crisis, and the Free Trade Area of the Americas

    Recent draft negotiating texts that would create a Free Trade Area of the Americas (FTAA) show this expansive trade agreement will threaten the health of poor people in the Western Hemisphere--thanks to the trade agenda of the most powerful FTAA negotiator, the Bush Administration. In Latin America and the Caribbean, lack of access to affordable medicines for treatable diseases like HIV is already a crisis. But provisions contained in the draft FTAA would dramatically worsen lack of access to medicines, while curtailing or eliminating countries' recourse to sustainable solutions that would help increase the affordability of desperately needed treatments.

    Download a one-pager from Health GAP on the FTAA: PDF Document

BACKGROUND

    42 million people are already living with HIV worldwide. 95% of those people have no access to the medicines that have transformed HIV in a chronic illness in wealthy countries like the U.S. These people have a death sentence because they are considered too poor to be treated. In this regard, HIV is like many other diseases of poverty—treatment is available, but only to a wealthy minority. As a result, more than 8500 people with HIV/AIDS die daily—3 million people per year.

    In the regions of Latin America and the Caribbean, AIDS is a profound threat to public health—even though these regions are not as heavily impacted as sub-Saharan Africa. 2 million people are currently infected in Latin America and the Caribbean. Worldwide, HIV prevalence in the Caribbean is exceeded only by sub-Saharan Africa. Throughout Latin America and the Caribbean the HIV pandemic has eroded development gains, undermined the human rights of infected people and of high-risk communities, and has exacerbated economic crises. Numerous studies have shown that medicines needed to treat other public health problems in the region are likewise priced out of reach.

    Drug Prices Slashed: Activists' efforts to force the prices of life-extending AIDS medicines down, particularly through the introduction of generic competition, have created pockets of access in some poor countries. In Brazil, national activist pressure has created an AIDS program built on the principle of universal treatment access. This universal access is only possible because of the availability of lower cost generics, and the government's decision to negotiate price reductions aggressively, using tactics with such as the threat of breaking a drug company's patent monopoly (called "compulsory licensing"; compulsory licensing is permissible under the rules of the WTO).

    AIDS-related death rates and hospitalizations in Brazil have plummeted as a result of this internationally lauded program. Brazilians are seeking testing for HIV where they would not have beforeÑbecause they have hope that if they test positive for HIV, they will have access to treatment and not just a death sentence. Moreover, demand in Brazil for lower cost medicines has changed the global market; the cost of HIV medicines has dropped from more than $10,000 per year in the U.S. to about $300 in many poor countries. While still too costly in sub-Saharan Africa, this price could bring life saving treatment within reach in the Western Hemisphere.

    Exit the Doha Declaration, Enter the FTAA: If the U.S. gets its way, the FTAA would make sustaining or expanding Brazil's AIDS treatment program nearly impossible. The Bush Administration, working with the American pharmaceutical industry lobby, the most powerful in the world, is fighting for tougher patent rights for the Western Hemisphere—regardless of the impact on health and access to medicines. These patent rights would exceed even the strict rules established by the WTO.

    At the last WTO Ministerial in Doha in 2001, developing countries and NGOs won a declaration, called the "Doha Declaration on the TRIPS Agreement and Public Health," signed by all WTO Members, stating that WTO rules "can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all." This declaration, opposed by the U.S. and the drug company lobby, gave countries the green light to use WTO rules to promote access to affordable medicines—for HIV or any health problem. The U.S. is now sidestepping the forum of the WTO: in aggressive negotiations of the FTAA and other regional and bilateral agreements, this declarationÑa tremendously important political victoryÑis never mentioned.

    The tougher rules the Bush Administration is fighting for include: 1) extending patent monopolies for drug companies beyond the current twenty year lifespan, 2) drastically limiting the conditions under which countries could do compulsory licensing of medicines, 3) eliminating the ability of FTAA countries to export compulsorily licensed medicines to other countries in need, 3) blocking generic companies' access to test data needed to do compulsory licensing in a timely and economically viable way, 4) in the FTAA investment chapter, drug companies would have standing to sue governments, potentially to block actions like compulsory licensing, and 5) directing drug regulatory authorities to block approval of a generic version of a drug if there are existing patent claimsÑincreasing the chance that bogus patent claims would prevent generics from coming to market, because drug companies already access have normal judicial means through which to enforce valid patent claims.

WHAT YOU CAN DO
    Join the growing network of public health, fair trade, human rights and AIDS activist organizations in the U.S. and in Latin America and the Caribbean fighting the deadly impact of the FTAA and related regional and bilateral trade agreements on public health and access to medicines. For more information, updates, and other resources contact Asia Russell at Health GAP: +1 267 475 2645 or asia@healthgap.org.

    Download a one-pager from Health GAP on the FTAA: PDF Document

HEALTH GAP STATEMENTS AND PAPERS
  • July 18, 2005 Imminent CAFTA Vote: Will Poor Nations Be Cut Off From Access To AIDS and Other Medicines? Conference with experts on issue of CAFTA choking the life out of access to treatment in Central America Media Advisory | Download transcript
  • February 10, 2005 Health GAP responds to USTR fact sheet on the Central American Free Trade Agreement and access to medicines by issuing a "Myths and Realities" briefing paper focusing on U.S. pressure on Guatemala regarding the government's efforts to protect access to clinical data necessary for entry of affordable generic drugs to enter the market. Download PDF | Download Word doc | Download Spanish version
  • May 28, 2004 (Washington) In reaction to today's signing of the Central America Free Trade Agreement (CAFTA), the AIDS activist group Health GAP criticized the agreement for threatening access to affordable, life-saving generic drugs in the region. CAFTA is a trade agreement between the U.S. and five Central American countries: Costa Rica, El Salvador, Nicaragua, Honduras, and Guatemala. Health GAP Media Release
  • December 17, 2003 (Washington, DC) Health GAP sick people lose out in U.S.-Central American trade deal finalized today as the U.S. won most measures to protect U.S. drug companies at the expense of public health. Health GAP Press Release | From the USTR: USTR Fact Sheet
  • December 9, 2003 (Washington, DC) Health GAP on Central American Free Trade Agreement (CAFTA) final negotations in Washington, DC: White House pushes for more drug company protectionism in Central America. Health GAP Press Release | Health GAP Fact Sheet: The Central America Free Trade Agreement, Access to AIDS Medicines, and Intellectual Property: Word doc | Transcript of Journalist Teleconference with Health GAP and experts & activists from Central America: Word doc | Read Online | ACT UP stages protest during CAFTA negotations, 9 AIDS activsts are arrested blocking traffic and storming meeting location: ACT UP Press Release, Pictures
    Health GAP Fact Sheet: The Central America Free Trade Agreement, Access to AIDS Medicines, and Intellectual Property, December 2003. Word doc
  • Health GAP on "FTAA and Protectionism for U.S. Drug Industry: Affordable AIDS Medicine Threatened in Latin America," Asia Russell of Health GAP, December 03. Download: Word doc
  • November 19, 2003 (Miami) Health GAP warns access to generic AIDS drugs goes from bad to worse as FTAA negotiations progress and the USTR pushes protectionist policies for the US pharmaceutical industry. Press Release and Fact Sheet
  • Health GAP on "FTAA and Protectionism for U.S. Drug Industry: Affordable AIDS Medicine Threatened in Latin America," Asia Russell of Health GAP, November 03. Download: Word doc | PDF file

  • Health GAP comments submitted to the office of the USTR on the second draft text of the FTAA , 28 February 2003.Read Online | Download Word Doc
  • Benchmarks on the Road to Free Access: Trade agreements, patent rights, and the right to essential medicines, Asia Russell, Church World Service roundtable on universal access to AIDS treatment February 19-20 2003. Download Slide presentation

Other Resources and Materials

  • The Impact of TRIPs-Plus Provisions in International Trade, Investment and Intellectual Property Agreements, Draft in Progress by Robert Weissman, co-director, Essential Action. Robert can be reached at rob@essential.org or 1-202-387-8030. Download Word doc | Letter on US-Chile Free Trade Agreement (discussing precedent in US-Jordan FTA): Read online | Comments on Drafts 1 and 2 of FTAA submitted to the USTR from NGOs: Draft 1 of FTAA | Draft 2 of FTAA

  • Médecins Sans Frontières/Doctors without Borders launched its Don't Trade Away Health campaign in August. Go to MSF's website | Download the MSF briefing document: "Trading Away Health" | MSF Press Release (19.11.03)

  • Médecins Sans Frontières/Doctors without Borders Regional and Bilateral Trade Agreements Must Not Erode Patient Rights: Read online

  • Médecins Sans Frontières/Doctors without Borders open letter to Robert Zoellick (U.S. Trade Representative) concerning Intellectual Property and access to medicines in the US-Central American Free Trade Agreement (CAFTA): Read online

Get Involved in the Campaign
    Contact Asia Russell of Health GAP: asia@healthgap.org, tel: +1 267 475 2645

What's New...

>> Health GAP Board Chair, Brook Baker on Dan Rather, taking on big PhARMA and supporting generic production.

>> Download 2007 Victories:  Fewer Deaths and More Compulsory Licenses

>>July 18, 2005 Imminent CAFTA Vote: Will Poor Nations Be Cut Off From Access To AIDS and Other Medicines? Conference with experts on issue of CAFTA choking the life out of access to treatment in Central America Media Advisory | Download transcript

>>February 10, 2005 Health GAP responds to USTR fact sheet on the Central American Free Trade Agreement and access to medicines by issuing a "Myths and Realities" briefing paper focusing on U.S. pressure on Guatemala regarding the government's efforts to protect access to clinical data necessary for entry of affordable generic drugs to enter the market. Download PDF | Download Word doc | Download Spanish version

 
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