The Politics of Patents Jason Andrews

The Access GAP 2.4 Million people died of AIDS in sub Saharan Africa in 2002 – yet only 50,000 in the region had access to medicines for AIDS. 485,000 people died of AIDS in Asia in 2002 – yet only 43,000 in the region had access to medicines for AIDS. (UNAIDS)

Treating AIDS in developing countries is infeasible ► Africans can’t take AIDS medicines because they “don’t know what Western time is.” --Andrew Natsios, chief of US Agency for International Development under Bush

Myth #1: People living in developing countries can’t adhere to difficult pill regimens ► Empirical data from a wide range of resource-poor settings show that people living in developing countries can be as adherent, if not more, than those living in developed countries ► Surveys in Botswana, Uganda, Senegal and South Africa show 20% higher adherence rates than US ► Survey in Sao Paulo, Brazil found equivalent rates to study in San Diego

Myth #2: It’s not the price of medicines, it’s the lack of health infrastructure  True that health infrastructure in poor countries may often be limited  But no particularly complex/ expensive training or infrastructure is required to run a successful treatment program (Paul Farmer, Haiti)  In all cases, the price of medicines is a key component of treatment access

“There is a lot of talk here about 'forecasting demand' for antiretrovirals in poor countries. We should not forecast demand. The demand has always been there. We should forecast our own ability to stop ignoring demand." --Paul Farmer  Working in Haiti, Farmer and colleagues, working in sparse electricity and without CD4 counts have had better treatment results than most US clinics

Myth #3: Patents don’t affect access to treatment ► Then what happened in Brazil?? ► In 1997, Brazilian government rolled out plan to treat every AIDS patient ► To do so, they began producing generics in 1998, and price of medicines has fallen by an average of 79%

Success in Brazil ► Brazil has already cut its AIDS death rate by 50% ► Has half the number of HIV cases that World Bank projected in 1994 ► AIDS patients are a quarter as likely to be hospitalized as before ► TB incidence has fallen by half ► Health Ministry spent $444 million on AIDS drugs in 2000 ► Decline in hospitalizations alone saved Health Ministry $422 million from ’97 to ’99

Generics, anyone? Not if we (and by “we” I mean “U.S.”) can help it

Costs of Major AIDS Drugs ► Large disparity between price and production costs provides big incentives for generics to enter market

So what’s to keep countries from producing generic versions of AIDS drugs?

► U.S. patents don’t prohibit generic production in other countries ► U.S. pharm companies must file patent in every country in which they wish to protect their drug from generic production ► But who is to keep developing countries from violating the patents and producing generics??

The World Trade Organization

► The WTO signed the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) ► Sets minimum standards for protection of intellectual property by its members ► Member countries will be required to respect foreign patents filed in their country, not produce generics without permission from the pharm companies ► Goes into effect in 2006, 2016 for least developed countries (LDCs)

Some good news…. ► TRIPS does have a provision in it that allows countries to produce generic drugs for public health crises ► However, no country has done this, largely out of fear of being put on “trade watch list” by US which would greatly decrease foreign investment and severely hurt their economies ► Developing countries wanted the language of this provision clarified and strengthened to protect them

► In months leading up to meeting of WTO ministerial meeting, the U.S. lobbied heavily against provisions that enabled generic production in public health crises

Disaster Strikes… and the U.S. takes a new look on compulsory licenses ► One month before the WTO ministerial meeting to address the questions raised about compulsory licensing in TRIPS, Anthrax hits the U.S. ► As a result, the U.S. threatens to violate the patent on Cipro unless the German manufacturer made enough doses available at a lowered price

A Victory for the Developing World ► One month later, at the WTO ministerial round in Doha, a resolution was passed stating that the TRIPS agreement should be interpreted in a way such as to “protect public health and, in particular, to promote the access to medicines for all”

The Empire Strikes Back ► With the Doha Declaration providing a means for developing countries to produce generics when public health crises emerge, the U.S. sought other ways of protecting their pharm companies ► They began signing bilateral trade agreements with more strict rules prohibiting generic production (TRIPS+)

And those without the means ► What about smaller/poorer countries without the capacity for generic production? ► The TRIPS agreement is unclear on whether the countries will be able to import generic medicines from other countries ► Again, most countries are too afraid of U.S. trade sanctions to import generics

Why all of this?

The Short Answer ► Follow the $ ► The Pharm industry, the biggest Washington lobbiest and largest donor to political campaigns, put pressure on the U.S. government to protect their interests through the WTO

Pharm Guide to dropping $150M ► “The documents show that the trade association, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, will spend at least $150 million in the coming year.” ► “The drug trade group plans to spend $1 million for an "intellectual echo chamber of economists”--a standing network of economists and thought leaders to speak against federal price control regulations through articles and testimony, and to serve as a rapid response team.“ ► “At least $2 million, and perhaps $2.5 million, in payments to research and policy organizations, "to build intellectual capital and generate a higher volume of messages from credible sources" sympathetic to the industry.” ► “In addition, the budget sets aside $17.5 million to fight price controls and protect patent rights in foreign countries and in trade negotiations.” ► “$9.4 million for public relations, including "$1 million for inside-the-Beltway advertising, $555,000 for placement of op- eds and articles by third parties," $600,000 for polling, $1.3 million for local publicity in 15 states and $680,000 for media relations consultants.”

yes, there are some actual arguments for patent protection too

The Money Argument ► Pharm companies need money for R&D, can’t just give drugs away

Who pays?

Blackmarkets? ► Allowing developing countries to produce cheap, generic versions of drugs used in developed countries will lead to a massive black market that will undermine markets in developing countries

► As part of an agreement to allow generic production of a drug, developed countries could require that countries take significant measures to prevent illegal export of the drugs ► Pills could be made a different color/appearance to make detection of generics easier

What they don’t know… fills our pockets ► Pharmaceutical companies are worried that if generics are produced in developing countries, people in the developed countries will learn how low the cost of their production is tarnishing the companies’ images

Sounds good to me

When all else fails, sue ‘em

Pharm v. South African Government ► In 1998, a group of 39 pharmaceutical companies filed a lawsuit challenging a 1997 law that enabled South Africa to issue compulsory licenses for production or importation of generic essential medicines ► The Clinton Administration (and, most notably, Al Gore) supported the Pharm suit

Talkin’ bout a revolution ► The South African Treatment Action Campaign lead thousands of activists and HIV+ South Africans in protest of the pharmaceutical companies

We’re outta here ► On April 19, 2001, the Pharm companies, not enjoying the negative publicity they were getting from filing a suit aimed at preventing life-saving drugs from being imported to the country with the most people suffering from AIDS dropped the suit

They may have won the battle….  The U.S. continues to negotiate bilateral trade agreements, which threaten the abilities of countries to retain the right to generic production  As of yet, no country has issued a compulsory license, indicating that despite the WTO provision, most countries are still afraid to anger the U.S. Trade Representative

Campaigns ► Doctors Without Borders initiated a large scale Access to Essential Medicines Campaign: ► Student campaign for changing university policies to promote access to essential medicines developed at universities (started at Yale): ► Consumer Watchdog Organization with lots of information on intellectual property and health:

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