Global Policy Forum

The Fate of Medicine Access in Poor Countries

By Sanjay Basu

Over the course of the past two years, trade negotiators from around the world have negotiated over patents and medicine access. At issue is the question of whether the privileges of companies to hold temporary (now 20+ year) monopolies over the sale of specific medicines, and thereby prevent price competition, is to outweigh public health concerns that medicines are priced out of reach to the poor. Last night (Wednesday, 8/27), the WTO determined that the former privilege outweighed the latter right by allowing the U.S. Trade Representative to overrule the "Doha Declaration on the TRIPS agreement and Public Health" (where "TRIPS" refers to the Trade-Related Aspects of Intellectual Property Rights agreement), which was passed by all member countries of the WTO in November 2001 (WTO, 2001). The Declaration stated that patent law "can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all."

That claim was lost on U.S. Trade Representative Robert Zoellick last December when he became the only trade minister in the world to have signed the Doha Declaration (as all WTO members did) but later prevent its key component from being implemented. This component would allow the poorest of countries--those without their own manufacturing capacity--to access cheaper "generic" medicines. But the USTR decided that such a provision could only be applied to a limit set of infectious diseases; conveniently, this set of diseases was also the set for which no medicines existed or for which the relevant medicines were off-patent or distributed through non-profit networks, thus having no impact on highly-priced, patented medicines (MSF, 2003).

One company--Pfizer--began to officially negotiate with the WTO ministerial director after the December negotiations broke down; the USTR had no qualms about stating openly in interviews with the business press that his position was directly arbitrated through the Pharmaceutical Research and Manufacturer's Association of America (Forbes, 2003), even though WTO trade ministersare supposed to represent country citizenry, not private entities (which technically have no rights in the WTO).

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 (Public Citizen, 2001). 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 (Families USA, 2002). 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 (Public Citizen, 2001). 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; Public Citizen, 2001). 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; Gellman, 2000), 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 (Boseley & Carroll, 2002). Indian generic manufacturers, meanwhile, have shipped medicines for over two decades without a single case of "diversion".

The perversity of these arguments seems more frustrating when we consider that 24,000 people die each day from preventable and treatable diseases (Donnelly, 2003), and that the very economic policies that have restricted medicine access are leading to the spread of infectious disease in the first place by destroying agricultural sectors in poor countries and leading to massive forced-migration-related infectious disease outbreaks (Bello et al, 1998; Kim et all, 2000; Farmer, 2003).

Anticipating that the issue (along with a set of stalled agricultural talks) might provoke questions about the WTO's fundamental legitimacy at its upcoming WTO Ministerial Conference in Cancun, the USTR convinced four other member states yesterday that the implementation of the Doha Declaration would have to be so narrow as to essentially prevent generic drugs from being used in most circumstances (Bloomberg, 2003). The deal, completed with the help of neoliberal trade ministers from South Africa (and highlighting the fact that between-country hegemony connects with within-country inequality to hurt the poorest of persons), calls for extreme circumstances to exist before generic drugs can be accessed. An epidemic would have to be in full-swing before public health officials could address it--and only then could some long and complex legal procedures (most outside of the domain of skill and time limits for poor country health ministers) be started to allow for medicine access.

The text of the USTR's implementation--which will be rubber-stamped at a WTO committee meeting today (Wednesday, 8/27)--is 7 pages long, even though the clause to which it refers is only 20 words. This should indicate the level of domestic litigation required before a country can use generic medicines. In addition, no matter how desperate the health need, a developing country without the capacity to produce a needed drug (which is virtually all of the poor countries) will have to ask another government to suspend the relevant patent and license a local company to produce and export it (Oxfam, 2003). Few countries, if any, will be prepared to help other countries in this way; it's hard to imagine, for example, the Indian government passing legislation for poor Pakistanis, let alone poor Indians.

Such an action would also provoke retaliation by the USTR, which in the past has threatened trade sanctions on Thailand, Brazil, Argentina, and a number of other countries for attempting generic importation for their own populations (Mayne, 2002). If that wasn't enough, the USTR is now also circumventing the entire WTO agenda in order to propose bilateral agreements with countries that further restrict medicine access while worsening terms of trade; these amount to legitimized bribery for the wealthiest members of poor countries while hurting the poorest (for a current list and implications for medicine access, see Table 2 in: www.zmag.org/content/GlobalEconomics/basu_publichealth.cfm) While developing countries do have some remaining options for generic medicine access, such as using the full extent of existing deadlines before the implementation of the WTO's patent rules, and by building up their own manufacturing capacity (although this takes years of effort), the bullying of the USTR foreshadows the upcoming WTO Ministerial Conference in September. It also highlights some important themes to keep in mind: the making of dramatic declarations followed by closed-door negotiations that undermine unanimous agreements; the co-optation of small regional powers like South Africa to decide the fate of smaller and weaker nation-states through what Peter Drahos has termed "circles of consensus"; and the connection between First and Third World inequality and within-country inequality, which perpetuates the lack of representation and power made evident in this case. Creative solutions will be needed to challenge these sorts of problems; among them are the development of new non-market-based drug development initiatives (http://www.accessmed-msf.org/dndi.asp), or the campaign to change university policies transferring publicly-funded research directly to for-profit entities without access stipulations (www.essentialmedicines.org). More support will be needed to enhance such strategies while delegitimizing those they contend with.