More Info
									                                       DOHA REDUX –
                                       U.S. ENTERS NEW PHASE
                                       OF BAD FAITH BARGAINING
                                       Brook K. Baker, Health GAP
                                       July 2, 2003

The U.S. Trade Representative and its handlers in the White House and in PhRMA are struggling to
coordinate their ongoing campaign to limit the impact of the historic Doha Declaration on the TRIPS
Agreement and Public Health. On June 22, 2003, the USTR made a "crucial," but ultimately misleading
"concession" in World Trade Organization talks over the controversy about allowing developing nations to
import generic drugs to address public health needs, saying that it would back off of its unilateral insistence
on limiting the Agreement to a specified list of infectious diseases, primarily AIDS, TB, and malaria.

Instead of insisting on this unwinnable disease limitation, the U.S. and PhRMA are returning to the drawing
board to accomplish three interlocking goals: (1) to come up with a new disease restriction that is not as
perverse as addressing pandemic infections only, (2) to limit the countries that would be eligible to import
generic medicines produced abroad to least developed countries and a few lower income developing
countries only, and (3) to erect even higher anti-diversion standards that will complicate both generic
production and importation.

In announcing that it was retreating temporarily from its insistence on covering AIDS, TB, and malaria only,
the U.S. is trying to recover political ground lost at the WTO via its renegade rejection of an imperfect
compromise reached by the other 143 WTO members at December. That compromise, reflected in
Chairman Motta's text, would have allowed generic manufacturers to produce and export medicines that
addressed any and all public health needs and would have permitted such export to a broad spectrum of
developing countries that unilaterally determined that they lacked meaningful and efficient manufacturing
capacity in the pharmaceutical sector.

Unnamed U.S. officials have stated that the U.S. has given up on insisting on a specific list of diseases, but
U.S. Trade Representative Robert Zoellick in a press conference at the mini-ministerial held in Sharm El
Sheik, Egypt, refused to confirm that the U.S. government was dropping this demand. Instead, Zoellick
paradoxically insisted that the U.S. had never supported the idea that agreement could only apply to a
"closed list" of diseases, referring presumably to the highly stringent language that the agreement could
eventually cover other infectious diseases of similar gravity and scope.

Zoellick's double-speak on U.S. obstructionism is matched, or even exceeded, by Harvey Bale, president of
the International Federal of Pharmaceutical Manufacturers Associations who said "We feel we are
wrongfully being blamed for holding up progress in certain parts of the (Doha) negotiation." Apparently, it
doesn't matter to Mr. Bale that all investigators agree that industry intervention at the White House in
November and December of 2002 prompted a hardening of the U.S. position on disease coverage and
ultimately that the industry sponsored the impasse of December 20.

In addition revising history, the U.S. and its PhRMA co-conspirators are hard at work trying to further limit
the Doha Declaration without re-opening the Motta text. Although the clues to their new strategy are
imprecise, they suggest that they U.S. intends to rephrase the scope of covered diseases, presumably
returning to the earlier U.S. position emphasizing "grave" public health crises, such as AIDS, TB, and
malaria. This phrasing would, of course, ignore the clear language of paragraph 4 of the Doha Declaration
that addresses all public health concerns without restriction: "We agree that the TRIPS Agreement does not
and should not prevent Members from taking measures to protect public health. Accordingly, ? we affirm
that the Agreement 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."

Even more significantly, the U.S. will attempt to further restrict the number of countries that can access
generic export from producer countries. A letter from 22 U.S. and European pharmaceutical companies and
three trade associations clarified the industry's position that any agreement should apply only to the world's
poorest countries that truly lack pharmaceutical capacity. Zoellick referenced this letter in his Egyptian
press conference and had earlier told the trade minister of the Philippines that, in the U.S. view, the
Philippines (and presumably Malaysia) would not be eligible to import generic medicines from abroad
because it had sufficient manufacturing capacity. Harvey Bale addressed the country-eligibility issue even
more directly: "Our focus is on helping the countries that the founding fathers of the Doha Agenda had in
mind." According to Bale, it would be a "gross exaggeration and a gross distortion" to give more industrially
advanced developing countries, such as India and China, the same rights as "poor states like Haiti, Namibia
or Bangeladesh."

The irony of Bale's formulation is that the Doha Declaration will require producer countries like India and
China to manufacture and export life-saving generic drugs to a broad range of countries with insufficient or
inefficient pharmaceutical capacity. India and China aren't countries that will "take advantage of Doha" to
access cheaper medicines for themselves, though, of course, it is perfectly legal for them to issue compulsory
licenses on any grounds whatsoever under the flexibilities of the TRIPS Agreement. Instead, lowest cost,
standard quality generics will ultimately be produced in large measure by efficient producers in India and
China that reach meaningful economies of scale for a broad range of public health medicines. To induce
generic entry into low-income countries, it will be necessary to aggregate markets, including markets with
large populations and meaningful purchasing power ? namely, those of middle-income countries.

But, PhRMA is so intent on making high profits on sales to income elites in middle-income countries that it
is willing to sacrifice the lives of millions of poor people to secure its market hegemony. Since U.S.
pharmaceutical giants have never seen a penny of potential profit that they would willingly abdicate to a
generic producer, they have chosen to slander the intentions of India, China, and Brazil, solely because
generic manufacturers in those countries are poised to supply standard quality medicines at a substantial
discount over PhRMA prices. Accordingly, the U.S. and PhRMA are scheming on how to coerce countries
to voluntarily opt out of the system and on defining gross-national-product and disease-burden tests to
greatly limit country eligibility.

With respect to their product diversion agenda, PhRMA and the USTR are allegedly pushing for mandatory
special packaging requirements and internal policing mechanisms. This mandatory system is more stringent
than that in the Motta text which merely recommends that special labeling and marking be used, but only
when such product distinction is feasible and does not significantly impact price.

Developing countries can expect no quarter from the U.S. which has a long history of bad-faith dealing in
Doha negotiations. It will keep on pushing PhRMA's agenda while it mouths platitudes about its intention to
find a workable solution. Despite developing countries' reluctant accommodation to the Motta text, they
should not expect that the U.S. really intends to reach a "compromise." For the U.S., others compromise ?
the U.S. wins.

As Doctors Without Borders and many others have argued, developing countries should dump that Motta
text and act in good faith on the Doha Declaration itself. That Declaration opens the door not only for
production for export via compulsory licenses but also production for export via limited exceptions under
Article 30. This is the easy, expeditious solution recommended by the World Health Organization, the
European Communities, multiple NGOs, and many developing countries themselves.
While the U.S. and PhRMA dither and dally, while they obscure and deceive, millions of lives have been
lost. Facing this stark reality, the Doha Declaration expressed a degree of urgency, especially since
limitations on producing newer generics medicines for export will arrive with full global force in 2005
(except for least developed countries). Global trade rules concerning exceptions to patent rights have to be
clarified so that developing countries can amend their national legislation to make maximum use of Doha
flexibilities and so that generic manufacturers can reduce the legal risk of their still risky economic
investments. That clarification was supposed to have happened by the end of 2002, but now, a full six
months later, the U.S. still blocks a global accord.

As the President of the U.S. is poised for a trip to Africa, a continent decimated by the AIDS pandemic ? is it
too much to ask that he restrain his PhRMA donors and that he chastise his USTR bully-boys? Could the
U.S. cease and desist from blocking a Doha accord and from seeking TRIPS-plus intellectual property
protections in its trade negotiations with Africa, such as that with the South African Customs Union? Could
the U.S. actually concede that low-cost, standard quality generic medicines are a critical component of a
global response to the global AIDS pandemic whether those generics are purchased under the U.S. bilateral
program or the Global Fund to Fight AIDS, TB, and Malaria? Do African lives really matter, except at press

To top