U.S. Should Back the Kids, Not the Pharmaceutical Companies

The creation of the WTO in 1995 brought with it the Agreement on Trade Related Property Rights (TRIPS). Under the TRIPS agreement, no party other than the patent holder can legally produce, sell, or import a drug in any of the WTO member countries for a minimum of twenty years after the drug's initial patent registration. However, TRIPS does allow for certain "flexibilities," including compulsory licensing. When a government issues a compulsory license, it gives a third party permission to manufacture certain medicines without the consent of the patent owners. At their 2001 round of trade talks at Doha, the WTO released the "Doha Declaration," which made clear that TRIPS should never prevent member states from taking actions to protect public health.

However, when Thailand exercised that right by issuing compulsory licenses for the AIDS drugs Efavirenz and Kaletra and Plavix, a cardiovascular drug, in late 2006 and early 2007, the pharmaceutical industry and its defenders lobbied the U.S. government to take retaliatory action.

Five U.S. senators sent a letter to US Trade Representative (USTR) Susan Schwab urging action against Thailand. In the letter, the senators expressed their concern about Thailand's "investment climate." They also worried about the harm that these actions might have on the U.S. pharmaceutical industry and its workers. Some of the workers in question were those at the research headquarters of industry giants Pfizer, located in Connecticut, and Roche, located in New Jersey--the home states of three of the five senators authoring the letter.

One of Thailand's most outspoken critics was the lobbying firm "USA for Innovation," which claimed to be a non-profit organization. However, The Nation reported that (pdf) the executive director of USA for Innovation, Ken Adelman, was also a senior advisor to Edelman Public Relations, a publicity firm employed by Merck, Abbott, and Sanofi-Aventis-the patent holders of the three drugs in question. Adelman was also a former member of the Reagan Administration and assistant to Donald Rumsfeld. In an April 2007 article published in the Washington Times, Adelman ramped the anti-Thailand rhetoric up to an extreme level.(pdf). He wrote of the "rampant theft of innovation" occurring in Thailand, excoriated their "lame excuses," and even placed them alongside China and Brazil in an "axis of IP evil." (Adelman's views represented quite a turnaround: he had previously regarded Thailand as a "fine little country" with "nice rulers.") Citing a study by his own organization that estimated the value of U.S. intellectual property at more than $5 trillion, he stressed the potentially terrifying costs to the U.S. economy if IP rights were not respected. Adelman also specifically called for Thailand to be placed on the USTR Priority Watch List.

Only a few days later, the USTR did just that, placing Thailand on the 2007 Special 301 Priority Watch List. Placing Thailand on this list would not automatically result in any trade sanctions, but was expected to have an effect on foreign investment in Thailand, especially in research-related industries. Thailand's position on this list also left it vulnerable to retaliatory trade related measures from the U.S. in the future. In the USTR report announcing that Thailand was named to the priority watch list, the U.S. specifically cited the issuance of the compulsory licenses, but the document also claimed that this offense was only the most recent, and that there were many other "longstanding concerns." ⁽Among the concerns mentioned were pirated disc production, book piracy, and the infringement of trademarked footwear products.)

Most public health advocates, however, weren't buying that explanation. James Love of Knowledge Ecology International wrote that Thailand's placement on the list was "entirely because the USTR and the Bush White House were not willing to stand up to corporate lobbying from Merck, Abbott, Sanofi and other PhRMA members."

The Thai government seemed to agree. A month after their placement on the watch list, Health Minister Mongkol Na Songkhla visited the U.S. and met with several U.S. government officials, including the USTR and the Secretary of Commerce, to attempt to negotiate a solution to the impasse. Mongkol left the talks bitterly disappointed, stating that nothing had been achieved, that Thailand would remain on the watch list, and that the compulsory licensing process would continue anyway. "It's clear he obviously represents the drug companies," The Bangkok Post reported Mongkol saying of U.S. Commerce Secretary Carlos Gutierrez: "There was no sign of friendship left when he started talking."

Very few states have used compulsory licenses to date--although many would benefit from them, including China. In addition to the need for pediatric formulations, local AIDS activists have told Asia Catalyst that as many as twenty percent of Chinese people living with AIDS may be in need of second-line drugs. These drugs are also not included in the government's free treatment programs, and are too expensive for the vast majority of the rural Chinese who need them. China has the capacity to manufacture these drugs itself. Asia Catalyst has urged the Chinese government to take this step, in order to save thousands of lives.

Both during the recent presidential campaign and after his election victory, Barack Obama promised to work to help people in developing countries living with HIV/AIDS gain access to safe and affordable generic drugs. He has explicitly stated that his administration will support the rights of countries to access generic drugs under the TRIPS agreement.

The Obama administration, and new USTR Ron Kirk, must follow through on this promise. We must stop penalizing countries that exercise their right--perfectly legal and agreed to by all WTO members--to issue compulsory licenses for necessary medications. The children we interviewed in China can't wait forever for life-saving medicines.

Please take a moment to sign Asia Catalyst's petition demanding that the US Trade Representative stop using punitive measures against countries who issue compulsory licenses.

Josh Greenstein is a Master's Candidate at the Graduate Program in International Affairs at the New School University and Graduate Intern at Asia Catalyst.