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New Trade Deal Would Benefit Big Pharma At AIDS Programs' Expense

Us Trade Deal Aids Drugs

First Posted: 10/ 5/2011 1:36 pm Updated: 12/ 5/2011 5:12 am

This piece is a continuation of The Huffington Post's collaboration on trade issues with The Dylan Ratigan Show, called Trading Our Future.

WASHINGTON -- In 2003, with the AIDS pandemic developing into one of the most severe humanitarian crises in modern history, President George W. Bush pledged billions of dollars in relief funding for citizens of the world's poorest countries. Seven years in, the initiative, called the President's Emergency Plan for AIDS Relief (PEPFAR), is widely regarded as an outstanding success, responsible for saving millions of lives in 15 developing nations.

Vietnam has received more than $320 million from the program since 2004, giving thousands of people living with HIV access to critical, life-saving medicine for the first time. But a new trade deal the Obama administration is pushing to complete with Vietnam and seven other Pacific nations threatens to seriously hinder both U.S. and international efforts to combat AIDS -- including the government's own efforts in Vietnam.

According to leaked documents from the talks, U.S. negotiators are seeking to impose a set of restrictive intellectual property laws that would help American drug companies secure long-term monopolies overseas. The result? Higher prices for drugs. That's good for corporate profits, but disastrous for relief programs like PEPFAR that depend on cheaper generic medications to treat the global poor.

"This U.S. trade policy is going to undermine U.S. AIDS policy by driving up medicine costs and keeping new HIV/AIDS drugs monopolized for longer periods of time in Vietnam," says Peter Maybarduk, director of Public Citizen's Access to Medicines project. "We're setting up U.S. taxpayers to pay more for the same result or just accomplish less."

While the potential repercussions are most obvious in Vietnam, the trade talks have broader implications. Trade experts at Public Citizen, the Health Global Access Project and other nonprofits view the current negotiations, dubbed the Trans-Pacific Partnership, as part of the Obama administration's "beachhead strategy" to establish a new international trade standard on drug access -- just as the North American Free Trade Agreement did for scores of trade issues in 1993.

The Office of the U.S. Trade Representative, the federal agency with formal responsibility for the negotiations, is aware of the concerns. But a USTR spokesperson said the agency needs restrictive patent standards in order to "incentivize" drug companies to supply medicine. "Patents covering new methods of use or new forms incentivize development of adaptations of drugs that are often highly valued in developing countries, such as heat-stabilized medicines for places that lack reliable refrigeration capacity," she said.

The same view is frequently voiced by U.S. pharmaceutical giants, many of which have close ties to USTR and the Obama administration through key staffers who had careers at the Big Pharma heavyweights before moving to their government positions.

And plenty of economic data suggest that the American patent regime does not foster useful medical innovation. Pharmaceutical companies spend about twice as much money marketing their drugs as they do on researching and developing them, and a tremendous portion of drug research is conducted by universities and the federal government's National Institutes of Health. Much of the research pharmaceutical companies do conduct is simply not relevant to public health concerns, with money pouring into projects for hair loss, for instance, while funding for diseases that primarily afflict the poor, like tuberculosis, stays in perpetual short supply.

"The drug companies would say it generates research, but the evidence is very questionable, because much of the research is not directed at important diseases," says Nobel Prize-winning economist Joseph Stiglitz.

USTR's efforts have alarmed some congressional Democrats, eight of whom wrote a letter to USTR head Ron Kirk emphasizing that the Obama administration's trade proposals are significantly more restrictive than the access-to-medicine terms negotiated in trade deals with Peru, Panama and Colombia under President Bush in 2007.

"The 2007 bipartisan 'May 10th agreement' was an important step in moving U.S. trade policy back toward a more balanced approach to promoting innovation and health in trade agreements with developing countries," the Aug. 2 letter reads. "We are concerned about reports that the balance is once again shifting away from the progress achieved in those past efforts ... a move that would jeopardize treatment goals and millions of lives."

Nevertheless, in several rounds of negotiations, the Obama administration has continued to press for a hard-line patent regime, claiming that stricter rules build on existing requirements that encourage innovation.

The USTR spokesperson tells HuffPost that Vietnam, in particular, already has some patent requirements in place and that those standards have not hampered the U.S. AIDS relief effort.

That claim directly conflicts with PEPFAR's official 2010 report (PDF) on its operations in Vietnam. Generic HIV drugs, which cost around $100 a year per patient, constitute 98 percent of the medicines that the U.S. buys for the Vietnam relief program, according to the report.

But the remaining 2 percent of drugs that are patented -- and thus far more expensive -- are a significant financial burden. Many of these patented medicines are "second-line" drugs, which patients need to combat HIV once the infection develops resistance to standard treatments. PEPFAR has expressed particular concern about Kaletra, a key second-line drug produced by Abbott Laboratories, one of a handful of multinational pharmaceutical companies with influence over the Trans-Pacific talks thanks to its position on a USTR advisory board.

"A key driver is the cost of Abbott products," reads the 2010 report on AIDS relief in Vietnam. "Expectations that the cost ... would fall by 50% in 2009 due to the introduction of generic versions were dashed when it was discovered that Abbott has patents pending in Vietnam and that Abbott intended to use the patents to prevent the procurement of generic alternatives."

"Work is continuing with intellectual property experts ... to determine if there are any legal grounds to enable the procurement of generic [Kaletra]," the report continues. That suggests patented medicine is a big financial hurdle for the program, contrary to USTR's claim. PEPFAR declined to comment for this article.

The framework proposed in a leaked draft of the Trans-Pacific pact builds off the U.S. patent regime, long maligned by public health advocates for fueling the highest drug prices of any nation. In Vietnam, such policies could end up extending already long-held monopolies on life-saving drugs, including Kaletra.

The World Trade Organization requires all countries to grant 20-year patents on medicine, but gives nations substantial leeway over which specific drugs actually receive patents. Less-developed countries with pressing epidemics often do not permit patent protections for drugs that receive monopoly rights in the U.S. Further, medicines that governments purchase for state-run health care programs are currently exempt under WTO patent rules.

According to leaked documents from the Trans-Pacific talks, the U.S. wants to require the eight other Pacific countries in the negotiations to grant patents on a wider swath of drugs and bestow a host of secondary patents that go beyond the simple chemical compound for the drug. These secondary patents can cover almost any characteristic of a particular medicine, from the color of a pill to a capsule's ability to resist heat.

Public health advocates refer to these types of patents as "evergreening patents" -- or even "junk patents" -- because they allow companies to extend their monopolies beyond the 20-year WTO window without actually creating a new medicine. The World Health Organization frowns on these secondary patents and has said they should be rejected.

But USTR is expressly seeking to require countries to issue patents on "any new form, use, or method of using a known product ... even if such invention does not result in the enhancement of the known efficacy of that product," according to the leaked draft of the trade agreement.

"It's an invitation to the pharmaceutical industry to extend drug monopolies and charge unaffordable prices for medicines," says Rohit Malpani, director of Oxfam's Access to Medicines campaign. "Not only do these restrictions deny affordable medicines to poor people in developing countries; they also encourage drug companies to focus on extending monopolies for existing medicines, instead of investing in research and development to develop the new medicines needed to improve treatment outcomes around the world."

The USTR spokesperson tells HuffPost that these secondary patents encourage companies to develop new uses for drugs and improve on existing drugs in ways that benefit developing nations. The agency also argues that even if a company obtained such secondary patents, the original compound would be available for generic competition.

But public health advocates say that, in practice, drug companies do extend their monopolies for years with these patents, by filing for protection on secondary aspects of existing drugs -- sometimes repackaged under a new brand -- that are essential for use in a certain regions. The heat-stable version of Kaletra, for instance, is prized by doctors in Africa and hot Asian nations such as Vietnam, but under secondary patent regulations could remain cost-prohibitive for decades to come.

"USTR wants to create brand-new monopolies on older drugs, for formulations that are developed with the U.S. and European market in mind," says James Love, director of Knowledge Ecology International, a nonprofit focusing on how intellectual property rules affect the poor. "The fact that these formulations are more valuable in a country with poor cold storage isn't a reason to block generic competition in places where people live in shacks and depressing poverty."

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This piece is a continuation of The Huffington Post's collaboration on trade issues with The Dylan Ratigan Show, called Trading Our Future. WASHINGTON -- In 2003, with the AIDS pandemic developing ...
This piece is a continuation of The Huffington Post's collaboration on trade issues with The Dylan Ratigan Show, called Trading Our Future. WASHINGTON -- In 2003, with the AIDS pandemic developing ...
 
 
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COMMUNITY PUNDITS
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martiniandabotoxchaser 04:04 PM on 10/05/2011
This is a no win...if Obama tells the US drug companies that they have to allow foreign makers to use their research and methods to produce their own drugs then everyone cried that Obama is allowing US jobs to go abroad.  If he keeps the jobs here then he is not allowing drug prices to fall and that hurts people in developing nations with AID but can also be translated into all sorts of other  Read More...
HUFFPOST SUPER USER
se72748
06:07 PM on 10/06/2011
The thing is,its not in big pharma's interest to cure anyone and of course its not in their interest to kill anyone either.What is in their interest is to keep you coming back to them for more medicine.I cured myself from what I was told was incurable type 2 diabetes.I did it with herbs,spices and nutrictional advise I found on the internet.I'm not selling anything so you will have to search out the answers yourself.The answers are there an its not always in pharma medicine.You can do it to.
11:00 AM on 10/06/2011
The statement in this article that there are “plenty of economic data [to] suggest that the American patent regime does not foster useful medical innovation … and is not relevant to public health concerns” isn’t supported by the evidence.

WHO states that there were 50,000 AIDS patients in the developing world under antiretroviral treatment (ARV) in late 2003. In May 2004, the US FDA offered to accept any file from any ARV producer that wished to have its therapy classified as a true generic.

Since all ARVs at that time were under patent, mostly by US firms, the FDA, by law, had to offer the right holder an opportunity to challenge the file. None did so.

The vast majority of ARV files were submitted by Indian manufacturers. In October 2009, the FDA announced that the 100th ARV in WHO’s Prequalification Programme, listing 185 different ARVs of various dosage forms, strengths, and manufacturers, had been approved as a true generic.

In global public health, neither patents nor prices have been a barrier to patients’ access to medicines. There is simply no way that global coverage for AIDS patients could have risen from 50,000 in 2003 to 7.2 million today if either had been a factor

-Jeremiah Norris
Director
Center for Science in Public Policy
Hudson Institute
http://scienceinpolicy.wordpress.com/
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vixter72
Think for yourself
10:27 AM on 10/06/2011
President George W. Bush pledged billions of dollars in relief funding for citizens of the world's poorest countries. Seven years in, the initiative, called the President's Emergency Plan for AIDS Relief (PEPFAR), is widely regarded as an outstanding success, responsible for saving millions of lives in 15 developing nations.
-----------------------But a new trade deal the Obama administration is pushing to complete with Vietnam and seven other Pacific nations threatens to seriously hinder both U.S. and international efforts to combat AIDS -- including the government's own efforts in Vietnam.
----------------------For those that obviously didn't read the article......
HUFFPOST SUPER USER
wlcd
10:12 AM on 10/06/2011
Penny wise pound foolish. I foresee a rise in AIDS cases which knows no borders-whose to say that an individual who was not able to receive treatment may pass it on to someone who comes to US and passes it on.
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HUFFPOST SUPER USER
Frank Larkin
Don't take it personal you're not that special
09:29 AM on 10/06/2011
Drug companies spend BILLIONS to develope new drugs, Should they not be allowed to recoup this money? They are private for profit businesses, are they not allowed to make money?
Millions or people are starving to death in the world yet Wal-mart and McDonalds make huge profits selling food. Sometime for 10 times what they paid for it.
What does all this mean.
Basically it means this. If there is not profit to be made, there will be no motivation to make, means there will be no treatment for some ailments, and more will die. It costs money to live.
HUFFPOST SUPER USER
Guy Fratianni
my micro has gone bio
03:57 PM on 10/06/2011
Why is it that the VA pays half of what it costs for perscriptions while Medicare pays double? I doubt if the pharmacutical companies would go belly up if Medicare paid the same as the VA don't you?
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HUFFPOST SUPER USER
Frank Larkin
Don't take it personal you're not that special
08:14 AM on 10/08/2011
probably not go belly up, they do make money, but I would only be guessing that the VA gets a discount because of one or 2 reasons, 1. Veterans 2. Research 3. Volume purchases 4. Negotiated pricing, while medicare may not have any of those attributes.
09:19 AM on 10/06/2011
Why are funding big pharma companies or AID patients? The US government has no business giving money to either...we're broke!
HUFFPOST SUPER USER
jkanon
A pragmatic progressive
09:14 AM on 10/06/2011
Everyone should contact his or her Senators and Congress person. This can be rolled back if enough voices are raised.
08:53 AM on 10/06/2011
And you liberals said that Bush was only interested in big corporations. He did more for Aids than any other President and let's see, this president, obama, is only interested in helping the big corporations. Keep you head in the sand, and hopefully it will still be there when we go to the polls to vote this president out in 2012.
HUFFPOST SUPER USER
kutepi4791
09:03 AM on 10/06/2011
Thats right and no one knows how he helped Africa either. They know nothing of the good this man did, but they hate him because he is Republican.
HUFFPOST SUPER USER
starchildjg24
Balance, Logic and Humor Rule
08:32 AM on 10/08/2011
Bush did a lot of good things. It is hard to get past his starting an ridiculous, unjust war, but he accomplished quite a few excellent humanitarian goals. One good thing about Bush was that he was more open to ideas from Democrats and Republicans. However, he made a lot of huge mistakes, and was very much into helping corporations. Can you say Haliburton?
08:50 AM on 10/06/2011
As I see it the bottom line is Obama's regime has screwed the ill of the world that Bush had helped. Just another example of how the pretender has lied and hurt people to get his way. In the Fast and Furious scandal 15 Americans and 200+ Mexicans have been killed by guns that Holders BATFE let walk into the gangs. These people were murdered so that the regime could ban guns because they are dangerous. In todays news American citizen Anwar al-Awlaki was murdered to show what a "Brave Decisive Hero" Obaa maa is. Obama was raised in a third world country Indonesia and Chicago and feels laws are just in his way and to be ignored.
08:31 AM on 10/06/2011
And now the drug companies are creating shortages of their drugs to force prices up... I guess they took lessons from the oil companies.
08:30 AM on 10/06/2011
"New Trade Deal Would Benefit Big Pharma At AIDS Programs' Expense" There's a big shocker! Did we really think the odds were stacked in the poors favor? Goliath is just too big for David now-a-days!
HUFFPOST SUPER USER
kutepi4791
09:05 AM on 10/06/2011
Don't forget the FDA is in on this, keeping their pockets full of money, I'm glad we are waking up to this fact. It's Big Pharma and the FDA putting our money in their pockets. What diseases have they cured recently? What medications have they given out that have killed people? It's all about the money. Remember they don't care about you!!!! Just the money.
09:40 AM on 10/06/2011
God bless you. As a nurse I see the inside of what is happening. It is the same thing that has always going. on. Get the drugs on the market as soon as possible so the money can roll in. Tell people they have high blood pressure when there pressure is 122 over 82 and start them on drugs. Start people on diabetic drugs when their blood sugar is 90 because it might go higher. Lets make all the money we can. And like sheep going to the slaughter we believe this untruth. How many cures for disease have come from the US. Not many. Sad sad very sad
08:30 AM on 10/06/2011
And this is a surprise??? Big business including the pharmacy companies OWN THE GOVERNMENT. And it's LEGAL ever since the right wing activist court ruled that business could own as many government officials as they could afford. After all MONEY is SPEACH!!
04:53 PM on 10/06/2011
They call lobbyists donors i call them as i see them bribers our U. S. COMPANIES
ARE CRUCIUFIED BY OUR GOVERNMENT FOR DOING THE SAME THING OVERSEAS TO
CAPTURE CONTRACTS. Yet all the elite in washington accept money .case closed.
vote them out..
HUFFPOST SUPER USER
ajustman
08:01 AM on 10/06/2011
I wish Obama and the congress were socialists! They arn't even close. Wait till you retire and have no heat, no food, no healthcare, NO MORE FUN!!!!!
08:52 AM on 10/06/2011
Only if Obama stays in office. If he is voted out in 2012 we have a chance.
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HUFFPOST SUPER USER
nychaseter
09:06 AM on 10/06/2011
No you won't. The Koch brothers will sell you to Iran. You're lying to yourself if you believe any republican cares about you.
HUFFPOST SUPER USER
ajustman
08:00 AM on 10/06/2011
I can tell you one thing for sure! If you have aids here in the US and you are lower and middele middle class you will die because you can't afford any medicines!!!!!! Yes we are paying for the whole planet at least for the moment ...and that is almost over. By the way the profits go to the CEOs of the Pharma companies. They make zillions of dollars!!!!!
We need to start thinking like we all live back in 1902 and readjust of livespan tables
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HUFFPOST SUPER USER
mamasilverhair
,egalitarian, humanitarian,believer
07:50 AM on 10/06/2011
It needs to be regulated...THE KEYS to the kingdom needs to be taken. They are like jesse james... Your money or your life... Oh no money....Bang.....