Wall St. and Business Wednesdays: U.S. Pushes To Limit Generic-Drug Rights In Trade Pacts By Anand Giridharadas

Under global trading rules, the inventors of medicines ordinarily have the right to a 20-year monopoly on their inventions. But five years ago, the United States joined 141 other countries in signing the Doha Declaration, confirming the right of poor countries to break drug patents and produce cheap generic drugs in the event of contagions like HIV.

At the time, Thailand was heartened. It had been trying everything in its fight against AIDS. It coined a jingle to promote safe sex. It placed condoms in massage parlors. Most important, it curbed deaths among the poor by giving them generic versions of medicines invented by multinational drug makers.

So it came as a jolt in January when the United States asked Thailand to sign a free trade agreement that would, on paper, dilute its right to break patents and use generics.

Washington said the agreement would save lives by spurring innovation and by making multinationals more confident to sell drugs in the country. But Thai officials saw the proposal as a morbid bargain: either refuse the U.S. offer and scuttle a trade deal with the United States worth billions of dollars, or accept it and lift the price of AIDS drugs beyond the reach of the poor.

"Those who require the essential drugs but cannot afford it, they will have to die," said Dr. Suwit Wibulpolprasert, the Thai official who is coordinating the Public Health Ministry's response to the U.S. proposal.

Thailand is not alone. It is merely the latest target of a quiet worldwide campaign by the administration of President George W. Bush to coax developing nations to barter away their patent- breaking rights in exchange for lucrative trade benefits, according to public health experts and government officials from Thailand to Brazil.

Specifically, Washington is pushing bilateral and regional trade agreements in which countries enact "superpatents" that prolong U.S. drug makers' monopolies and limit the conditions under which their patents can be broken.

These new rules, once they are adopted by developing countries, roll back the patent-breaking rights that were confirmed by the 2001 declaration at World Trade Organization talks in Doha, Qatar.

In effect, Washington is stitching together a parallel global patents system.

The trade deals, negotiated in secret, attract little notice. But they have already been signed with developing countries battling AIDS, including six in Central America. And negotiations are beginning with several nations pivotal to the fight against the virus, from Thailand to five southern African countries, including South Africa and Botswana.

Because of these agreements, India's generics industry, the world's largest, is reining in plans to supply poor countries and refocusing on richer ones, said Dilip Shah, head of the Indian Pharmaceutical Alliance, which represents generic makers.

"For the Indian pharma industry," he said, "it's not doomed; it will find a way out. But for the patients in the Third World, it's bad."

Public health officials warn of catastrophic consequences if the bilateral deals are applied to AIDS drugs.

"If you prevent countries from using generic drugs," said Pedro Chequer, the head of Brazil's national AIDS program, "you are creating a concrete obstacle to providing access to drugs. You are promoting genocide, because you're killing people."

First-generation AIDS drugs reached the world's poorest people only when the use of generics cut their cost to $140 a year from more than $10,000. As new drugs emerge to treat patients resistant to first-line medicines, the trade agreements make a similar drop "extremely difficult to ensure," according to Médecins Sans Frontières, or Doctors Without Borders.

Washington maintains that the trade deals are directed toward diseases other than AIDS.

And Richard Feachem, executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, based in Geneva, acknowledged that it was too early to tell whether the bilateral agreements would be used to block access to AIDS drugs.

"If we do see this in practice," he said, "we should condemn it. But it really is in the interpretation of these agreements in very particular circumstances."

Yet, in defending the bilateral agreements, Bush administration officials often cite the AIDS example to make their case. Stronger patents save lives, the argument goes, by keeping companies confident enough in profit to keep discovering new drugs.

Dr. Mark Dybul, the second-ranking official in the White House program to fight AIDS, said that because AIDS patients constantly grow resistant to medicines, it is disastrous to widen access today and have no drugs tomorrow.

"As an individual physician sitting in front of an individual patient, you will do whatever you need to for that patient now," said Dybul, a physician. "When you're a public health physician, you're not a physician for one person but for millions of people. And you need to be thinking about whether the action in that single setting, repeated hundreds of thousands of times, will cause a problem for the millions."

Spreading the new patents system are U.S. trade negotiators, who some experts believe are assuming the influence that public health experts once had over the Bush administration's AIDS policy.

Victoria Espinel, an assistant U.S. trade representative, strongly defended the use of trade agreements to promote patents that "have more in place" than the patents agreed upon at the WTO talks in Doha, a step she described as merely "harmonizing minimum standards."

"It is crucial to public health," she said, "to promote the innovation of drugs and to make sure that research and development of drugs continues."

As for exempting AIDS drugs from the new accords on patent-breaking, she said, "I want to emphasize that there is enough flexibility in our free trade agreements to allow our partners to do what they need to do."

An explicit promise to exempt AIDS drugs, however, is not in the agreements, said Wibulpolprasert, the Thai official. And that, experts say, is at the heart of the problem: Nations must take Washington's word for it.

An examination by the International Herald Tribune of several free trade agreements reveals provisions that appear, on paper, to limit the freedom to use generics.

Several agreements, for example, prolong a patent monopoly beyond 20 years if the developing country's regulators show "unreasonable delays" in approving a patent. This provision, absent from WTO rules, sustains higher prices.

Many agreements also serve to prolong patents by requiring generics to be retested as if they were new inventions. Retesting a drug biologically equivalent to one already approved takes time and may be unethical, since infected patients must be given placebos.

The WTO rejected this requirement, a five-year ban on the use by generics makers of the safety data submitted for the original branded drug.

And while the WTO lets countries decide when to break patents, the new U.S. agreements limit this action to special cases - to enforce antitrust law, for example, or during emergencies.

Experts say the most important use of generics is excluded: to reduce costs by making branded products compete with generics.

The generics question has also opened a rift in the United States, between Bush and former President Bill Clinton. On a recent visit to New Delhi, Clinton said he had confronted Bush about generics while flying to Rome for the papal funeral last April.

"The American position is untenable," Clinton recalled saying.

In an interview, Clinton said Washington was succumbing to the influence of the drug lobby in undermining the Agreement on Trade-Related Aspects of Intellectual Property Rights, or Trips, the WTO framework on which the Doha declaration built.

"If a company develops a new advance in AIDS, TB, malaria, you need large numbers right away and all the people who need it are in poor places," Clinton said, referring to generics producers.

"If you don't have Cipla, Ranbaxy, Hetero, Aspen in South Africa and other people to step into the breach, how are we going to do that? I don't understand the apparent obsession with some of the big pharma interests in trying to block them off."

This article appears in The International Herald Tribune.
Brian Knowlton in Washington contributed reporting to this article.

Anand Giridharadas

Wednesday, April 19, 2006