Health GAP Talking Paper
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As it states, in its June 25, 2002 Communication Relating to Paragraph 6 of the Doha Declaration, the U.S. has added specificity to its earlier post-Doha proposal. Unfortunately, these specifications continue to narrow the scope of the production-for-export solution promised at Doha. Once again millions of lives hang in the balance.

Narrow Articulation of the Scope of the Problem

In paragraph 2 of its submission, the U.S. strives to achieve a "compassionate" tone, while it narrowly defines the problem. It does so first by referring to "grave" public health problems, especially those resulting from HIV/AIDS, TB, malaria and other epidemics. Clearly, these major pandemics were at the forefront of international concern about inadequate supplies of affordable medicines in developing countries. But the promise made at Doha was to reach solutions for a multitude of public health concerns, not only for the most eggregious, headline diseases. The unaffordability of patented medicines for a wide range of public health diseases and conditions plagues developing countries and robs their foreign-currency depleted treasuries. Accordingly, post-Doha solutions must leave options for diseases other than the "Big Three."

Second, the U.S. attempts to define the problem narrowly by giving existing patent holders a major role in the definition of threshhold needs. In this regard, the U.S. has suggested that drug-access problems ordinarily arise only "where the supply of the pharmaceutical in question has not been provided by the patent holder through normal commercial arrangements or through discount, donation, or other aid programs." An industry that can brag about its Accelerated Access Program that it now supplies 36,000 Africans with ARV's instead of the 9,000 in 2000 (less than 1% of the African population in immediate need of anti-retroviral therapy) must be not be given any power to define the need for imported medicines from dramatically cheaper, high quality suppliers.

Third, although the U.S. has given up its earlier effort to identify solutions primarily for least developed countries, in paragraph 2 it continues to seek a narrow definition of capacity, focusing solely on manufacturing capacity within a pharmaceutical sector. In this regard, the U.S. continues to disregard the problem of small-market and low-income countries where it might be theoretically possible to utilize some marginal pharmaceutical capacity, but diseconomies of scale would make it economically infeasible to do so. Accordingly, the U.S. should be forced to address the economy-of-scale issue more forthrightly. Moreover, The U.S. has attempted to cover its probable intentions with respect to over-stringent definitions of capacity by referring to an ephemeral "procedure to clarify which developing country Members can be considered to have insufficient or no manufacturing capacity in the pharmaceutical sector or at least the factors to be taken into consideration." Rather than let importing countries establish their own frank assessment of the economic and technical feasibility of pharmaceutical production, the U.S. apparently wants to put this power in the hands of a behind-the-scenes committee which will non-transparently hold life-and-death decisions in its hands.

In terms of defining the problem, one positive feature of the U.S. proposal is that it frankly acknowledges that solutions must reach no-patent countries. It also is willing to presume at all least developed countries lack pharmaceutical capacity.

Narrow, Geographically-limited Solutions

Having defined the disease problem narrowly and having narrowed the list of countries that might avail themselves of the production-for-export solution, the U.S. next moves in paragraph 4 to limit the number of countries which might produce for export - namely developing countries with some pharmaceutical capacity. Arguably this is a negotiating offer designed to attract the agreement of existing producer countries, e.g., India, to drop their alliance with African countries and instead to ally with the U.S. demand. It also is designed to suggest the possibility of technology transfer to Africa so that it might develop some regional capacity. Admittedly, many treatment activists and developing countries have urged solutions that leave the door open for the development of indigenous pharmaceutical capacity in the Global South. However, in the short run, it might be desirable to authorize some existing generic manufacturers in developed countries to produce immediate volumes of high quality generics. Thus, the option of developed country manufacturers should not be prematurely removed from the bargaining table.

Like the E.U., the U.S. has eschewed the possibility for regional approaches, advocated by the Africa Group in favor of country-by-country production for export, none of which can be diverted to another country. Because economies of scale may be achieved by the combined purchasing power of regions, such as the proposed African Union, and some of those regional purchases might be coordinated in the future either by the Global Fund or by regional procurement bodies, the diversion rule should not limit regional approaches. Instead, diversion rules should be aimed at preventing diversion to developed countries and developing countries with patents which have not yet issued a compulsory license for import. The enforcement mechanisms should fall primarily on developed countries that already have a stellar record policing their borders.

The U.S. has also proposed a WTO notification rule that will permit a time period for "improved offers by patent holders to supply the country in need." Paragraph 5. In addition to permitting response by pharma, the notice rule will also permit behind the scenes pressure from developed countries as well as overly close supervision of anti-diversion rules.

Moratoriums or Waivers for Article 31(f) only

The key feature of the U.S. proposal is its total rejection of a proactive Article 30 solution and its advocacy of moratoriums or waivers on the enforcement of the domestic-use rule found in Article 31(f). The length of any potential moratorium or waiver period is unspecified and, of course, risks being too short. Moreover, there are multiple grounds for opposing these two ideas including: (1) they don't help developing countries that have prematurely and improvidently passed TRIPS compliant and TRIPS-plus patent legislation; (2) moratoriums and waivers are irrelevant for the first generation of AIDS medicines which are already lawfully being produced in India (because of process only patent rules) and elsewhere; and (3) the moratoriums or waivers might end, just when you need them. Given that diseases like AIDS, TB, and malaria will continue for a very long time, it makes more sense to come up with a good Article 30 solution now than merely postpose a solution for a few years.

These concerns about moratoriums are serious enough, but there is another sinister suggestion in the U.S. Communication. It states taht "a moratorium or waiver (and the actions taken under them) would be approved in advance, which would provide the manufacturing country with certainty that its prodcution and export ofthe product under the waiver will not be subject to challenge." Article 8. Apparently, the U.S. envisions a separate panel of WTO decision-makers who are going to approve individual CL's, for each and every manufacturer and for each and every importing country. Thus, in addition to the onerous procedural burdens of seeking hundreds of CL's, there will be the additional burden of seeking prior approval, case-by-case, before some kind of WTO body.

Conclusion: A procedural morasse lead to mass graves

Under the U.S. proposal, procedural barriers have multiplied once again: (1) establish your status to a WTO decision-maker as a no- or low-capacity country, (2) next, negotiate for voluntary licenses or price reductions from multiple patent holders product-by-product, (3) issue a compulsory license in the importing country, product-by-product, (4) seek prior approval from another WTO board for a waiver or moratorium, product-by-product, (5) notify a manufacturing/exporting country and convince it to issue an export-only compulsory licenses product-by-product. Each African country will have to go through three or all five of these steps, depending on whether it has patents on file or not. At some point, one has to wonder if the purpose of these procedural hoops is to protect the minor, mostly theoretical interests of Big Pharma and developed countries or whether they are designed to actually watch people die in the treatment queue as Kafkaesque procedures drag on and on and on. At what point will 8000 deaths a day matter?

Brook K. Baker, Health GAP
JUNE 27, 2002