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Tido von Schoen-Angerer

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Shooting Itself In the Foot: The Broken Promises of the U.S. Trade Agenda

Posted: 09/14/11 01:00 PM ET

As United States trade representatives thrash out an international trade deal in Chicago, truly ominous developments are unfolding behind the scenes.

Leaked drafts of the U.S. position show that the government is pushing provisions to tighten intellectual property laws that will make price-busting generic competition impossible. In short, the U.S. is pushing to severely restrict access to affordable medicines where they are needed most - in the developing world.

The U.S. is negotiating the Trans-Pacific Partnership trade agreement with Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. But the significance of the deal reaches beyond those countries. It will be used as the basis for future agreements between the U.S. and other developing and developed countries.

In the field of health, competition saves lives. Monopolies backed up by patents keep the price of medicines out of reach for longer. Because generic manufacturers were free to make cheaper versions of AIDS drugs, the price of HIV treatment has fallen by more than 99 percent over the last ten years -- from over U$10,000 for one year's treatment in 2000 to as low as $60 today.

This is why I am alarmed by the U.S. pursuing measures that would strangle the production of generic medicines, and force the price of new drugs to remain high.

The leaked papers reveal a number of U.S. objectives: to make it impossible to challenge a patent before it is granted; to lower the bar required to get a patent (so that even drugs that are merely new forms of existing medicines, and don't show a therapeutic improvement, can be protected by monopolies); and to push for new forms of intellectual property enforcement that give customs officials excessive powers to impound generic medicines suspected of breaching IP.

And there's more.

The U.S. will also reportedly introduce measures to make it harder and more expensive for generic drugs to get regulatory approval, and to lengthen patent monopolies for pharmaceutical firms so that they keep generics out and prop up drug prices for longer. All of these measures are known to hit the availability of affordable medicines in developing countries hard.

This deal is set to be sealed behind closed doors. Under no obligation to make its negotiating texts public, the U.S. Trade Representative's office has instead published a white paper claiming their TPP proposals will remove barriers to access to medicines. The document not only fails to provide the technical details necessary for effective public scrutiny, but also expresses a fundamentally flawed premise that speeding up market entrance of brand-name, monopoly-priced drugs will, in itself, solve the challenge of access to affordable, quality medicines. The truth is that the U.S. position outlined in its leaked TPP proposal actually creates barriers to access and thwarts generic competition.

With this devastating agenda, the U.S. is back-pedalling on the promises made to the developing world.

In 2007, President George W. Bush committed to abide by key public health safeguards in future free trade deals in a bipartisan agreement with Congress, called the New Trade Policy. This policy, which is expressly not mentioned in the USTR white paper, obligates the U.S. to refrain from pushing countries to adopt many of the very same measures it is now promoting as a part of the TPP.

Most worryingly, though, is that the U.S. trade representatives' stance is not only a backflip on previous commitments to ensure public health safeguards - the U.S. is also shooting itself in the foot.

In June, I attended the United Nations High Level Meeting on HIV/AIDS in New York. There I witnessed the U.S., plus the other UN Member States, commit to '15 by 15': scaling up to a total of 15 million people on HIV treatment by 2015.

The U.S. is by far the greatest funder of global HIV programs. It poured in 54 percent of all donor government disbursements in 2010, committing $5.5 billion. The U.S. President's Emergency Plan for AIDS Relief (PEPFAR - another Bush policy) relies principally on the purchase of generic antiretroviral medicines. The U.S. is also the biggest contributor to the Global Fund to Fight AIDS, Tuberculosis and Malaria, another global health player that relies heavily on generics - as indeed does Doctors Without Borders.

If an extra six million people need to be put on HIV treatment over the next four years, then we need to find solutions to rein in drug prices and keep treatment affordable. We need to find ways of getting as much bang from PEPFAR and the Global Fund bucks as possible.

And yet the U.S. is trying to club up with countries in a deal that keeps the cost of medicines high. Again, the fear is that whatever ends up in this free trade deal ends up as the basis for all future agreements with other countries.

As the negotiators gather in Chicago to hammer out their trade deal, are they paving the way for the '15 by 15' pledge to be another broken promise?

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Recency  | 
01:46 AM on 09/15/2011
Who do 'our employees' think they are working for, themselves? Our government makes deals
that are to the detriment of the citizenry and it's as if no one cares. We are our own worst enemy
and shortly, we will prove it to one and all. What has fair trade done for the world, are we better off now than we were before fair trade.
Semper Fi
05:59 PM on 09/14/2011
Nothing is too good, and no profits too high, for BigPharma! The US government sounds more and more like a wholly-owned subsidiary of the big corporations... banks, oil companies, pharmaceutical manufacturers and "defense" industries have far more voice in Washington DC than American voters and taxpayers have ever had.
05:19 PM on 09/14/2011
What the author fails to see is that without patents there wouldn't be further research.
Developing a new product to the point where it will get approval from the FDA (and 120 equivalents in other countries) is extremely expensive. These costs can only be recovered by the 25-year exclusivity period a patent grants.
Sure, the indiscriminate release of generics would increase competitions and lower prices to a certain extent. But, on the other hand, this practice would encourage the pharmaceutical industry in developing countries to limit its activity to just copying the patented medicines without doing any own researching. Copying makes faster profits than spending anything on actual research.
Would you prefer that the US pharmaceutical industry keeps their new medicines as trade secrets, just as The Coca Cola Company does? Well, then you can just kiss the prospects for new treatments goodbye.
Political agnostic
09:36 PM on 09/14/2011
There should be no patent on any drug that does cure anything. That will solve this mess immediately.

We pay far too much for drugs that do not cure. If you develop a drug that does not cure anything, only cloaks the symptoms you deserve no protections.

As far allowing companies in developing countries to just copy instead of create. That's okay. They will only be able to copy designer drugs that do more harm than good. That will allow their peoples to get medical help quickly and cheaply.

"Would you prefer that the US pharmaceut­ical industry keeps their new medicines as trade secrets, just as The Coca Cola Company does?"

They already do.
09:59 AM on 09/15/2011
Abolishing patents will not solve anything. Research activity will come to a standstill for lack of funding.
Also, it is not okay to allow companies in developing countries to just copy. This stifles their drive to do meaningful research themselves and just deepens the third world's dependence on US, European and Japanese pharmaceuticals. Besides, they don't just copy designer drugs. The most sensitive areas in the WTO copycat discussions concern the drugs necessary for meaningful AIDS treatment. Also, Cialis and Viagra are being copied.
If it were just about designer drugs, the author - who appears to be involved in third world medicine - wouldn't be so concerned.
And finally - no the drugs aren't kept as trade secrets. They have to be disclosed to the FDA for approval.
04:36 PM on 09/14/2011
Wait, competition is good and helps drive down prices? I thought capitalistic competition was a horribly destructive thing. I guess it is until it's no longer convenient.
James Love
03:05 PM on 09/14/2011
This excellent commentary by TIdo von Schoen-Agnerer describes an important and regrettable failure by the Obama Administration develop a trade policy that is consistent with human rights and basic fairness.
Political agnostic
09:40 PM on 09/14/2011
Thank you. I never realized until now that we never had any trade policies before President Obama was elected. that is startling. But....................why didn't any of the other 43 administrations do it?

Why did they shirk their duty to develop these trade policies?
Why did they not do anything?

it is all President Obama's fault. The fact that no previous administration came up with any solutions is President Obama's fault.  the fact that no other administration developed any trade policies is of course President Obama's fault.

Shame on him.
James Love
05:19 AM on 09/15/2011
Obama promised to change things. He made these promises to health activists when he campaigned in the primaries. The staff of USTR itself thought things would change. What we did not expect was that Obama would push policies that were objectively worse than the Bush Administration, as regarding trade pressures on developing countries. Abandoning the May 20, 2007 agreement on access to medicine, and introducing a whole set of new demands for developing countries that exceed their WTO obligation, and opposing the mention of the 2001 Doha Declaration in the UN resolution on non-communicable diseases, are some just of the more obvious data points, and there are others, like trying to kill off the R&D treaty discussion at the WHO in 2009. I am not too worried about Obama. He was elected President, won the Nobel Peace Prize, has a decent chance of getting reelected, and in any event, his family is financially secure. I worry more about people less fortunate than him or you.
12:08 PM on 09/14/2011
When the giver cannot stop worrying about the size of his own roll of bills, the getter has little chance of receiving even what was promised, much less what was hoped for. Wish it were otherwise.