AIDS TREATMENT NEWS Issue #307, November 20, 1998
John S. James

Before the speeches of World AIDS Day (December 1) again recount this grim reality, we want to suggest a new target for AIDS activism--the rules of international trade--where the work of a small number of people might save many lives.

Until recently, pharmaceutical patents and other intellectual-property restrictions on life-saving and other medications were widely recognized among major industrialized countries, but the system did not care very much if poor countries quietly manufactured patented medicines like AZT without permission when necessary. The patent holders' losses were negligible, since otherwise there would have been almost no sales anyway, as the people and governments who needed the medicines could not afford them and would only have been forced to do without. And these low-cost products took little if any market share in rich countries, since few people pay for expensive drugs out of pocket, and the government health plans, pharmacies, distributors, private insurance, and managed-care companies which do pay cannot use illegally imported medications. (In over 10 years of publishing AIDS TREATMENT NEWS, we have not heard of any U.S. resident obtaining AZT or any other antiretroviral which was manufactured without authorization of the patent holder--with the possible exception of AZT from a Canadian firm, which was stopped long ago by legal action.)

But today the system has changed. Not only are there major international efforts to stamp out all pharmaceutical "piracy" anywhere, regardless of the circumstances and the human cost, but these efforts go far beyond unauthorized drug manufacture to impose other restrictions as well. The U.S. in particular has taken the lead in trying to force even the poorest countries throughout the world to sacrifice their public health and the welfare of their people, when necessary to preserve the interests (even only symbolic interests) of multinational corporations. U.S. government and industry even try, with mixed success, to force other countries to obey rules that the U.S. itself does not follow domestically.

These changes resulted mainly from GATT, the Global Agreement on Tariffs and Trade. GATT originally began over 50 years ago, and did not cover pharmaceutical patents. Today's GATT, which does cover pharmaceutical patents and which established the WTO, developed recently at a series of meetings called the Uruguay Rounds. The WTO, headquartered in Geneva, began in 1995 and now includes about 120 countries; some provisions took effect before 1995.

GATT and the WTO, intended to improve the world economy by rationalizing trade and other economic rules, require all countries to change their laws when necessary to meet a list of conditions, almost all of which are mandatory. The WTO serves as an international forum to resolve trade disputes and regulate retaliation. The result has been a regime such that any country in the world which chooses to run its own affairs differently can face ruinous economic warfare by other nations.

GATT is not all bad. It was supposed to create trillions of dollars of additional wealth in the world (and may have done so, before the current world economic crisis). Many developing countries have better rights under GATT than they could get if forced to rely on bilateral negotiations with much more powerful nations. GATT and the WTO can often be used to support, as well as to oppose, measures which advance human health in poor countries.

Intellectual-Property Abuses

The problem is that the system is not evenhanded. As with most such efforts, the rules are distorted to favor the interests of the rich and powerful--multinational corporations, big investors, and large industrialized countries. The poorest nations and peoples are the biggest losers.

The result is a growth of what might be called 21st century tribute. In traditional tribute, vassal states had to pay extortion money to their conquerors. Today, tribute payment is usually made not through lumps of gold, but through submission to biased rules which poison the future of the weak to unjustly enrich the strong.

Probably the worst single feature of GATT/WTO was the decision to include pharmaceutical patents and apply them to developing countries--effectively locking in a system which cuts off most of the world's population from almost all access to new medicines, until 20 years later when the patents expire. No one can fully tabulate the human costs, because of the overall complexity; high pharmaceutical prices are not the only major barrier to better medical care. Perhaps the most pernicious consequence of the GATT/WTO system is that many creative possibilities for better medical care for poor countries cannot begin at all, because they might cross the rights of too many parties, some of which will require prohibitive royalty payments, or prohibitive costs for legal research and negotiation.

Developing countries were given 10 years to change their patent laws, but certain changes had to be made earlier. Some of these deadlines have already been reached, setting off a number of controversies.

It is likely that the GATT/WTO inclusion of pharmaceuticals will kill millions of people, as companies increasingly price their proprietary medicines for rich countries and tiny elites exclusively, with many if not most forms of relief now legally blocked throughout the world.

What Can Be Done?

Even without changing the GATT treaty itself, it would be surprisingly feasible for an activist movement to save lives.

The reason is that GATT is not only a fixed, static body of rules, but is constantly being litigated and otherwise applied in thousands of specific cases. In this ongoing activity under the trade rules, the U.S. (the "world's only remaining superpower") has been an extremist in trying to force unworkable conditions on other countries--resulting in ongoing disputes with countries representing most of the people of the world.

The reason for the U.S. extremism in this area is that Congress, the White House, the U.S. Trade Representative, and others usually hear from only one side--multinational corporations, their industry associations, and organizations which have been created, paid, or pressured to echo their line. Usually *no one* even addresses any other side-- effectively turning the U.S. government into a tool of corporate interests. When abuses occur--for example, when a major pharmaceutical company got Senator Jesse Helms to obstruct an unrelated treaty, in order to punish South Africa for passing a domestic law which could be interpreted to give the public health and welfare of South Africans priority over the intellectual property interests of multinationals--or when policy makers abroad are given misleading information, such as copies of a U.S. law with a key section omitted--the U.S. public seldom hears anything about it.

Access to health care when life and death are at stake could become a world-class moral issue, like the international campaign against apartheid. But meanwhile, even a far smaller movement could restrain some of the worst excesses, by exposing abuses and forcing debate on the merits. If Federal agencies heard not only from industry, but from churches, doctors and other medical professionals, activists, and others--and from the press as well--much would be different. Below we include some authoritative information sources which activists can use in educating themselves and others.

For More Information

In our experience, the hardest part of engaging this issue was knowing where to begin. The following can help others get started.

* The leading U.S. organization on international intellectual property and consumer protection is the Consumer Project on Technology, an organization created by Ralph Nader in 1995; see their Web page on intellectual property and health care (http://www.cptech.org/ip/health), which has collections of background papers on international and other issues (including U.S. pricing of pharmaceuticals). CPT has additional information, and was able to supply us with documents on South Africa and the dispute between President Bill Clinton and President Nelson Mandela about pharmaceuticals and intellectual property, during Clinton's visit to that country in 1998. (Much of this information came from Freedom of Information Act requests to the office of the U.S. Trade Representative.)

* Health Action International (HAI) is "a non-profit, global network of health, development, consumer and other public interest groups in more than 70 countries working for a more rational use of medicinal drugs"; see http://www.haiweb.org.

* The treatment access forum, an electronic mailing list on AIDS treatment access for the developing world, was started by organizers of the 12th World AIDS Conference in Geneva. For more information, including an archive of previous postings, or how to join the forum, see http://www.hivnet.ch/aids98. (If you only have email but not Web access, write to: aids98.community@hivnet.ch.)

* Some law firms which advise clients on international intellectual property have Web sites anyone can use, with background articles and news bulletins. Of course these are written from a corporate viewpoint, but they are professionally authoritative. For example, see the Ladas & Parry site, http://www.ladas.com.

* The U.S. Trade Representative Web site is http://www.ustr.gov. The U.S. Trade Representative--the focal point of most U.S. pressure on trade rules--is a member of Clinton's Cabinet.

* The International Trade Law Monitor, http://itl.irv.uit.no/trade_law, includes searchable full texts of GATT and other international-trade agreements.

* You can find many other relevant Web sites by using the search engine of your choice (for example, http://www.metacrawler.com). Some of the following search terms may be helpful; and often the Web pages returned will suggest other terms for additional searches reflecting your interests. The same list may also help reporters, librarians, and others using searchable archives of news stories--or help locate USENET electronic discussions (another forum for activism) in http://www.dejanews.com.

Search Terms on Pharmaceutical Intellectual Property and World Trade:

WTO (or World Trade Organization, http://www.wto.org)

GATT (or Global Agreement of Tariffs and Trade)

TRIPS (or Trade Related Aspects of Intellectual Property Rights, which is a section of GATT)

U.S. Trade Representative (or USTR; see explanation above)

Special 301 (a provision in U.S. law which requires the U.S. Trade Representative to create an annual watch list of countries for possible retaliation for not adequately protecting U.S. intellectual property rights; this year about 40 countries are on the list.)

PhRMA (or Pharmaceutical Research and Manufacturers of America, representing about 100 U.S. pharmaceutical corporations, is a major opponent of liberalization on pharmaceutical patent issues; see http://www.phrma.org)

Data exclusivity (forbidding the use of data submitted to regulatory authorities--even if publicly available--for approval of other companies' drugs)

Compulsory licensing (requiring patent holders to license their rights in an emergency, or certain other circumstances, meaning that others can use the rights and pay a set royalty. The U.S. pressures other countries to end compulsory licensing of vital pharmaceuticals for their citizens--but meanwhile within the U.S. it provides compulsory licensing of musical entertainment, and of patent rights in other business contexts. In both cases, the government is responding to pressure from corporations, which insist on workable arrangements within the country, but are unmoved by the sacrifice of people abroad.)

Turmeric; Neem; and other medicinal plants (on the issue of multinational companies patenting plants which have been used in traditional medicine for centuries. Fortunately these patents are starting to be overturned in the U.S. and Europe, and in the WTO, as Western institutions are finally beginning to acknowledge that the traditional uses claimed in the patents are not original.)

Parallel importing (importing authorized patented drugs, originally sold by the patent holder at discount to distributors in large markets who have more negotiating power than many small countries, then resold by the distributors without the patent holder's permission. Parallel importing is related to the doctrine of "exhaustion of rights" of the patent holder by the first sale--which is neither supported nor opposed by GATT).

Bolar provision (a provision in U.S. law which allows the use of patented drugs (purchased on the open market) for medical research, without the approval of the patent holder. Generic drug companies can use this law to develop bioequivalent products while the proprietary drug is still covered by the patent, so that they will have low-cost generics ready to go as soon as the patent expires. Some U.S./multinational pharmaceutical companies want to stop other countries from using this strategy to reduce drug costs.)

Trade dress (color and appearance of pills or other medicine. By trademarking the appearance, companies can create disincentives to the substitution of generics, because of the risk that public confusion could cause dangerous medication errors.)

Medicines and Related Substances Control Amendment (South African law strongly opposed by PhRMA)

Nkosazana Zuma (South African health minister, advocate of wider use of generic drugs and other public-health reforms)

Other search terms: intellectual property; patent; pharmaceutical; names of specific countries; 1998 (to help select recent articles and Web pages); etc.

Conclusion

The current problems of intellectual property and treatment access may have resulted partly from oversight. A few years ago this writer attended an AIDS meeting where another participant happened to be an intellectual-property professional. I asked him what could be done about the effect of GATT on treatment access in poor countries. He seemed concerned, but said that he had never thought of that problem before. Apparently the effect on access to medical care was not a significant part of the discussions establishing today's GATT and the WTO. (GATT seldom mentions pharmaceuticals, and when it does, it lumps them with agricultural chemicals--suggesting that the human consequences for medical care were not carefully considered.)

This issue is winnable because the powerful pharmaceutical industry need not be the enemy. When someone dies from lack of money for treatment, there is no sale and no profit. If they were saved with a lower-cost equivalent drug--available through compulsory licensing or parallel importing, for example--there would be no loss to anyone's profit, investment, incentive, or research. Many lives could be saved with little financial impact anywhere.

Corporations seem to fear losing *precedents* for strong intellectual property protection--a legitimate concern perhaps, but not one to kill for. We can support market incentives, while opposing market extremism which disregards the health and welfare of the majority of people. Better arrangements are possible, and we should insist on them.

Industry gains nothing and only loses from condemning most of the world's people to lack of access to modern medical treatment, even when they need it to save their lives. Surely the human race, and the companies as well, can do better than that. The problem is that corporations often act on autopilot, with managers fighting for advantage and oblivious to long-term consequences, including effects on the company's reputation. Much can be gained without pressuring companies to go against their interests. They need only stop and think about what they are doing and what their interests are.

A first step is for potential activists to acquaint themselves with this issue, and begin discussions on specific alliances and strategies.

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