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E-DRUG: Health Care and Trade Negotiations Letter to Department of State

E-DRUG Letter to US Department of State on Health Care and Trade Negogiations

May 12, 1998

James McGlinchey
Office of Intellectual Property and Competition
United States Department of State
Washington, DC 20520

via fax 1.202.647.0892

Mr. McGlinchey:

        We are writing to express our appreciation for your participation at
the Washington, DC meeting on Intellectual Property Rights, Health Care
and Trade Agreements, and also to emphasize our concerns about U.S.

        This week the World Health Assembly (WHA) will meet in Geneva.  One of
the resolutions before the WHA asks member states "to ensure that public
health rather than commercial interests have primacy in pharmaceutical
and health polices and to review their options under the Agreement on
Trade Related Aspects of Intellectual Property Rights to safeguard
access to essential drugs."

        There was a consensus among public health and consumer groups that it
is important for governments and international bodies to be clear that
in health care sectors, public health considerations indeed have primacy
over commercial considerations.  This is not to say that intellectual
property rights are not important or useful in achieving public health
goals.   Rather, it speaks to the framework under which competing policy
objectives are evaluated and resolved.

        For example, at the conference there was discussion of several disputes
concerning the use of generic drugs, including government efforts to
encourage generic substitution, the mandatory use of the generic name on
the label of the drug, and so-called "Bolar" disputes, regarding the
non-commercial testing of drugs prior to patent expiration.   Public
health officials strongly support government efforts to promote generic
drug competition, and we ask that trademark and patent disputes be
evaluated in the context of the impact of the policy on public health.

        Likewise, we ask that disputes concerning the public health regulation
of the marketing of infant formula, tobacco or other products be judged
on the basis of public health concerns.  Thus, for example, we would not
expect poor countries to be threatened with trade sanctions for efforts
to implement World Health Organization guidelines on infant formula
marketing, as recently occurred in Guatemala, nor should Canada or other
countries be threatened with NAFTA and GATT sanctions for plain paper
packaging of cigarettes.

        There are a number of disputes over the appropriate level of
intellectual property protection for patents on pharmaceuticals and
biotechnology, health registration data, orphan drug market exclusivity
and related topics.   As you know, intellectual property regulation is a
complex topic, and one cannot rely upon simple minded "more is better"
rules.   It is inappropriate to always choose the policies which lessen
competition and raise drug prices the most, or to evaluate such disputes
solely in terms of how the disputes benefit U.S pharmaceutical and
biotechnology firms.  Government sponsored monopolies and regulatory
entry barriers to competition lead to higher prices, and should be
justified only when the policies are necessary to promote public health
objectives.  Overbroad protections should be avoided,  and governments
should be encouraged to adopt policies which enhance universal access to
health care technologies.  Countries with low incomes face different
problems in providing universal access to health care than do developed
countries, so "one size fits all" approaches may be inappropriate.

        At the workshop there was much discussion about policies to encourage
and provide access to "Essential Health Research."  As you know, in the
United States the government spends more than $14 billion for research
at the National Institutes of Health, which it plans to double, and it
also funds health care research in other Public Health Service agencies,
the Department of Energy, the Department of Defense and elsewhere.  Many
participants expressed concerns that government policies to transfer
taxpayer funded research on drugs for cancer, AIDS, malaria and others
severe illnesses to the private sector were designed to benefit
commercial interests more than consumers.  In some cases these disputes
are matters of foreign policy, such as the many international disputes
over the introduction of generic versions of Taxol, a cancer drug
invented by NIH scientists, but marketed by Bristol-Myers Squibb.   The
U.S. government recently placed South Africa on its Sec. 301 Watch list
for not providing "unfair competition" protection for health
registration data for Taxol, even though in the United States, the Taxol
registration data expired in December 1997. The grounds for the 301
Watch list were that "some" countries still provide longer protection
than does the U.S.   Here again, it would be appropriate for the U.S.
government to consider public health concerns, and seek to justify why a
government funded invention such as Taxol (all clinical trials in
question were sponsored by the NIH, not Bristol-Myers Squibb) should not
be available in generic form in South Africa, a country with many poor

        There was also much concern about the adequacy of funding for research
on tropical diseases such as Malaria, whether or not the consumer
interest was protected in the commercialization of inventions developed
at Walter Reed Army Institute of Research, and the lack of incentives
for research on adverse drug effects, appropriate technologies and other
important areas of research which do not produce marketable products.

        Some conference participants further suggested that countries use
innovative "reinvestment" approaches to promote essential health
research.  These approaches have been considered by the U.S. government
in several contexts beginning in 1983, and also in the UK.  Some say the
PhRMA companies will claim that such requirements will be in violation
of the TRIPS and the proposed multinational agreement on investments
(MAI).   The U.S. should evaluate the public interest in increasing the
level of essential health care research before it takes action against
such measures.  

        There are also many other disputes.  Poor countries want to permit
parallel imports of patented drugs, as do the UK and other developed
countries, in order to obtain competitive world prices.  This is very
important for countries with small internal markets.  Compulsory
licensing is also important.  Disputes about compulsory licensing of
essential drugs are expected to reach the World Trade Organization. 
There is also much concern by medical researchers that compulsory
licensing will be important in new gene therapies and other complex
technologies.   In evaluating the reasonableness or appropriateness of
compulsory licensing programs, the U.S. government should indeed begin
by considering the impact of the program on public health.

        There was also much discussion about the need for developing countries
to receive better  legal assistance in evaluating or negotiating new
treaties.  Many participants expressed gratitude to the World Heath
Organization for publishing monographs and reports on health aspects of 
TRIPS and other IPR issues, and we encourage the U.S. to support such
efforts.   This is particularly important given the immense resources
that PhRMA and other industry groups spend lobbying various governments
on these policies.  Independent information restores some measure of
balance in debates, and prevents future misunderstandings.

        Again, thank you so much for taking the time to meet with public health
and consumer groups to discuss these important and complex topics.  We
look forward to a broader dialog with  U.S. officials on the development
of trade policies which promote public health objectives.


James Love
Consumer Project on Technology
Washington, DC

Bas van der Heide, International Coordinator - Europe
Dr. K. Balasubramaniam, International Coordinator - Asia South Pacific
Dr. Roberto Lopez, International Coordinator - Latin America
Health Action International

Dr. Amir Attaran
Malaria Project
Center for Study of Responsive Law
Washington, DC

Robert Weissman
Essential Action
Washington, DC 

Dr Patrick Bond
Senior Lecturer, Economic Policy
University of the Witwatersrand Graduate School of Public and 
Development Management, Johannesburg, South Africa

Niyada Kiatying-Angsulee
Chairperson of Drug Study Group
Drug Study Group (Thailand)

Sumlee Jaidee
Health & Development Foundation

Richard Laing, MD, MBChB, MSc
Associate Professor
Department of International Health
School of Public Health
Boston University

Llew J. Gibbons, Fellow
Franklin Pierce Law Center

Jerome Dumoulin
Institut de Recherche Economique sur la Production et le Developpement
Universite Pierre Mendes France

Celine Gounder
Project Manager
Princeton Project 55 Tuberculosis Initiative

James Love
Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
http;//www.cptech.org | love@cptech.org
202.387.8030, fax 202.234.5176

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