BY EVA CHENG
To get Third World countries to agree to a new round of global talks on trade rules, in November 2001, at the Doha ministerial summit, US President George Bush's administration supported a declaration that reaffirmed the right of poor-country governments to suspend patent laws so that cheap, life-saving medicines can be manufactured or imported in public health emergencies.
Since then, the Bush regime and the big US pharmaceutical corporations have manoeuvred to undermine that commitment. Washington's moves threaten to aggravate the Third World's already mammoth health crisis.
Most poor people in the Third World cannot afford medicines, which are priced beyond their reach so that the big drug companies can maintain their super-profits. According to the US Fortune magazine, the pharmaceutical industry has been the most profitable in the world for the past 11 years.
The huge profits of the drug industry are only possible because a patent on a new drug gives a corporation a 20-year monopoly on its production and marketing. Drug companies claim that these super profits are justified in order to recoup the money they spend on research and development, and as an incentive to develop new drugs. This is untrue.
Western governments generously subsidise drug industry research and allow companies to market discoveries made in government and university laboratories. The lion's share of new drug development costs are in preclinical research, and much of that is performed by universities and government-funded facilities, not the drug companies.
According to the aid agency Oxfam, each year 14 million people die from infectious diseases, such as tuberculosis, malaria and lower respiratory infections, mostly in the Third World. In 2002, 3.1 million people died from AIDS, in many cases because they couldn't afford treatment.
Yet, just over 1% of the 1393 new medicines approved by the multinational drug companies between 1975 and 1999 were designed to treat these diseases. Only a tiny proportion of the industry's massive annual research budget (the eight-largest drug corporations spent US$19 billion on R&D in 2002) is devoted to combating diseases in the Third World that afflict more than half a billion people.
While people's movements and governments in the Third World have scored some successes in recent years in their struggle for increased access to cheaper drugs, Washington and the big drug producers won't lie down.
The battle is expected to continue during the fifth ministerial summit of the World Trade Organisation (WTO) in Cancun, Mexico, September 10-14, when all elements of the ongoing negotiations on new global trade rules will be reviewed. This includes the Trade-Related Aspects of Intellectual Property Rights agreement (TRIPS), the WTO rule that governs patents.
The WTO wants to complete all negotiations by December 2004. However, given the serious lack of progress in the negotiations, it can be expected that Washington and the big drug corporations will continue to push their profit-gouging agenda at the Cancun gathering.
Long battle
The TRIPS agreement offers blatant protectionism for the pharmaceutical industry, whose operating profit rate is more than 20% per annum. Drug companies, and especially the powerful Pharmaceutical Researchers and Manufacturers of America (PhRMA), were closely involved in drafting the agreement, which was signed in 1994.
TRIPS creates a global patent regime, replacing the patchwork of many different sets of national rules. Developing countries have until 2005, and least-developed countries until 2016, to enforce the uniform system, which includes 20-year protection for new drug patents, with no exceptions. Failure to enforce patents can lead to trade sanctions against a country.
The gains for the Western-dominated pharmaceutical companies are obvious: they hold 90% of all patents on pharmaceuticals and companies can charge what they like during the life of their monopoly on production and marketing. Patented anti-retroviral drugs, used to keep HIV from developing into full-blown AIDS, typically cost between three and 15 times their generic (as cheaper, non-brand-name versions are called) equivalents.
The new global patent regime is clearly directed against those Third World countries, like India, Brazil and Egypt, which have managed to build up pharmaceutical industries of their own, using patent regimes which don't favour Western companies.
By enforcing patents on everything from industrial processes to biotechnological processes, including those applied to agricultural products and life processes, the advanced capitalist countries are trying prevent Third World countries from having easy or rapid access to existing inventions.
While Third World countries do not have to legislate to enforce patents for pharmaceuticals until 2005, many governments have been arm-twisted into doing so by their strong First World trading partners.
While the Doha WTO ministerial meeting reaffirmed that Third World governments could activate the TRIPS provisions to suspend drug patents when public health is endangered, the US and the drug barons have sought to undermine them by insisting on "alternative interpretations".
Under article 31 of TRIPS, for example, member-countries have the right to engage in "compulsory licensing", which allows domestic manufacturers to produce much cheaper generic versions of patented drugs.
In response to the AIDS crisis, Brazil produced its own generic anti-AIDS medicines in 1996. This enabled Brazil to provide the country's AIDS victims with free treatment, cutting the country's AIDS mortality by half and slashing the hospitalisation rate by 80%.
In response, Washington put Brazil on the "watch list" under the US trade law's infamous "special 301" clause, which threatens trade sanctions. The US also launched a formal action against Brazil in the WTO to stop Brazil's production of generic drugs.
When South Africa passed a law in 1997 enabling the production of generic drugs to deal with its AIDS crisis, US President Bill Clinton's administration in 1998 suspended the country from additional benefits under a preferential trade scheme. In 1999, Washington also put South Africa on the "special 301" watch list. In 2000, the US offered cheap trade credits to South Africa on condition that it does not produce generic anti-AIDS drugs. Soon after, 39 pharmaceutical transnational companies unsuccessfully sued South Africa in a bid to stop it from producing or importing generic drugs.
These outrageous actions unleashed a major international defence campaign, which contributed to the drug companies dropping their case against South Africa in April 2001 and Washington withdrawing its WTO case against Brazil.
Boosted by the victories, African countries, and at least 17 other Third World countries (including Brazil, India, Cuba, Venezuela and Indonesia), led a campaign within the WTO to re-affirm the TRIPS provision that recognises the priority of public health over patents. This resulted in the Doha Declaration on Public Health, issued by the WTO's fourth ministerial summit in Doha, in November 2001.
The Doha Declaration stated: "The TRIPS agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS agreement, we affirm that the agreement can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote medicines for all."
The declaration was a setback to the big drug corporations and the US government. However, it did serve as a "sweetener" by the First World to win enough Third World support for the next round of global trade talks. The launching of these negotiations had been delayed by two years following the revolt in Seattle in 1999.
New US offensive
As many Third World countries don't have the capability to produce essential generic drugs, paragraph 6 of the Doha Declaration instructed the TRIPS Council to find a solution to this problem by the end of 2002. At issue was whether member-countries have the right to import generic drugs. As the few Third World drug manufacturing countries charge much less than those produced by the big corporations based in the US and Europe, uninhibited importation of generic drugs would hurt the drug barons' profits.
Liasing closely with US drug firms, Washington immediately focused its fire on paragraph 6. In a May 2003 analysis, entitled "Reneging on Doha", Medicins Sans Frontieres (Doctors Without Borders) explained: "Originally, the US argued that [production and importation of generic drugs] should be restricted to a handful of infectious diseases — AIDS, TB, malaria and 'other epidemics of comparable gravity and scale', later extending this to a shortlist of AIDS, TB, malaria, plus an additional 19 infectious diseases."
In December 2002, negotiations on paragraph 6 broke down when, despite all other WTO members agreeing to a common solution, the lone objection of the US stalled the whole process. The US insisted that there be a precise list of diseases for which generic drug production is permitted.
The recent SARS epidemic exposed just how Washington's position is fundamentally hostile to the interests of public health; obviously SARS was not on the list and there was no provision for hitherto unknown epidemics.
Most revealing, the MSF article pointed out, was that Washington's proposed list of diseases included "mostly diseases for which patents are not a barrier (because there is no treatment, or no patented treatment)". In other words, "this 'compulsory licensing' list includes mostly commercially irrelevant diseases, and excludes many commercially important diseases for which treatments could require a compulsory licence."
In January, the European Union proposed a compromise that was little different from the original US proposal. The MSF article explained that the EU and US proposals will create a two-tier system in which countries without drug-production capacity not only have to meet more onerous conditions but also "lose the right to determine what constitutes a public health need in their own territories".
At the World Health Assembly in May, the US again pushed its anti-health agenda. But its proposal received virtually no support from the WHA's other 191 members. According to Partners In Health's Sanjay Basu, in a May 29 article "Patents and pharmaceutical access", the US refused to support a counter-proposal by Brazil — cosponsored by Bolivia, Ecuador, Indonesia, Peru, Venezuela and South Africa — which reaffirmed the main aspects of the Doha Declaration.
Unable to defeat Brazil's motion, Washington refused to support it until all mention of the Doha Declaration, bilateral and multilateral trade agreements, and language of the "public good" were removed.
Washington didn't want multilateral trade agreements mentioned in the resolution because it might enhance the WHA's role in shaping WTO rules. Washington has increasingly used bilateral trade agreements to impose harsh trade rules on trading partners when the WTO rules fall short of delivering what the US wants. Though watered down, Brazil's proposal was adopted by the WHA.
From Green Left Weekly, August 6, 2003.
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