Global Policy Forum

By Sanjay Basu

If you cross paths with Robert Zoellick's mother over the next few weeks, please remind her that applications to George Washington University's School of Public Health are due soon. Her son needs to hurry up and submit his paperwork. Mrs. Zoellick might be surprised at the suggestion that her son Robert, our US Trade Representative, should go back to school. She might tell you that her dear Robbie already graduated magna cum laude from Harvard's Law School and received an MPP from the Kennedy School of Government. Mrs. Zoellick might say that her son's overqualified for his job. The only problem is that Robert Zoellick has been making a lot of decisions about public health lately--and in that realm, he is terribly uninformed.

Take, for instance, his actions earlier this week at the WTO council. Trade representatives from the other 143 member countries of the WTO decided that the poorest of nations--those without any pharmaceutical manufacturing facilities--should be able to import cheap generic drugs, since they can't pay for the more expensive patented versions. But earlier this week, Mr. Zoellick became the only minister at the WTO to refuse to agree to the measure.

This isn't the first time that's happened. Back in December, Mr. Zoellick did the same thing just before Christmas. The issue was how to implement the WTO's "Doha Declaration" on public health, which the WTO (with Mr. Zoellick's vote) passed in November 2001. That agreement declared that the patent rights of drug companies should be secondary to public health concerns to "promote access to medicines for all." In the agreement, the WTO promised to determine how countries without manufacturing facilities were going to import generic drugs.

But Mr. Zoellick decided that he would "reinterpret" the Doha Declaration. He claimed that the Declaration was not really about promoting "access to medicines for all" (in spite of the wording in the Declaration itself) but it was really only intended to cover a short list of diseases. He came to the table with a list of 15 diseases he thought were suitable. The only problem was that major killers like cervical cancer and pneumonia were not included. Mr. Zoellick said those diseases not on the list were "lifestyle" disorders. So the three million kids who will die from pneumonia in Africa this year better whip themselves back into shape and learn to change their ways. Some of the other trade ministers thought this was a bit perverse, and refused to agree to that deal.

This Monday was supposed to be a finalization of the delayed negotiation process, but Mr. Zoellick came to the table with a new set of rules, once again using his "alternative" theories of public health practice. This time, medicine access would not be restricted to just a short list of diseases, but countries would also be restricted to importing generics only after a "national emergency." So health ministers in Burkina Faso, which is currently in the beginning stages of a major meningitis epidemic, should sit tight and wait for a couple hundred thousand people to die--then they can begin the legislative process to get medicines. Other rules proposed by Mr. Zoellick would be extraordinarily cumbersome. Under the system proposed, if Pakistan wanted to get cheaper drugs from an Indian generic manufacturer, the Indian government would have to pass legislation for Pakistani citizens. How politically pragmatic!

No one mentions, of course, that the very measures Mr. Zoellick is pushing on the poorest of countries are far more stringent than those followed by the United States. Remember the anthrax scare? After only four deaths, Congress was threatening to import generics immediately if Bayer Corporation didn't produce its anti-anthrax drug quickly enough. But other countries, of course, aren't allowed to do the same when they have real public health crises.

I pity Mr. Zoellick's public relations officer, who will no doubt be working long hours this week to generate an entirely new system of logic justifying the nature of these deals. But, of course, there's plenty of support for Mr. Zoellick and his worker bees at the Washington trade office. It comes from the pharmaceutical industry, as was made explicit this week at the WTO council. Instead of negotiating with each other, the trade ministers declared they would just circumvent the whole process and start negotiating directly with Pfizer. Companies like Pfizer don't want a break in their global monopoly on prices. But if most profitable industry in the world can't handle the fact that poor countries represent a tiny percentage of their pharmaceutical market, then our trade minister needs to be able to stand up to them and defend the Doha Declaration.

The industry, and the USTR, claims that generics would undermine their capacity to pay for research and development--that is, the research and development that American taxpayers actually foot most of the bill for. The industry doesn't bother to release it's own tax information, however, which reveals that Merck this year used 13% of its profits on marketing and only 5% on R&D, Pfizer spent 35% on marketing and only 15% on R&D, and the industry overall spent 27% on marketing and 11% on R&D according the Securities and Exchange Commission. That's not accounting for the fact that 52% of new drugs on the market aren't even the result of R&D, but are "me too" drugs that are simple reformulations of old products slapped with new stickers.

The industry still claims that generics will undermine its business, even as it continues to be ranked by Fortune Magazine as the world's most profitable industry for 11 years in a row (having profits as a percentage of revenue nearly three times the rest of the Fortune 500 industry). When confronted with the fact that Africa comprises only 1.3% of the industry's revenues (making its loss equivalent to "about three days fluctuation in exchange rates," according to an industry analyst quoted in The Washington Post), the industry claims that generic drugs will get diverted to the North to undermine its key markets, and cites GlaxoSmithKline's recent loss of AIDS drugs sent to Africa as a case in point. But a look at the GSK case shows that Glaxo failed to even track the shipments and only discovered after a year that its packages to Africa had been shipped improperly, allowing them to be smuggled to Europe. Tracking mechanisms, however, seem to be no trouble for neighborhood flower shops. Indian generic manufacturers, meanwhile, have shipped medicines for over two decades without a single case of "diversion".

The negotiations process on generic drugs will re-start in less than one week. It's time for Mr. Zoellick to learn what it means when 24,000 people die a day from treatable diseases; otherwise, he should take a fraction of the $20 million in campaign contributions pharmaceutical companies donated last year and use it for his tuition at the School of Public Health.

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