[Ip-health] Philip Stevens op-ed in Wall Street Journal Asia: Free Trade Is Good for Health

Steven Knievel sknievel at citizen.org
Fri Dec 21 13:16:39 PST 2012


(Sorry if repost, but I think this was lost when the listserv was down)

Our research director, Ben Beachy, wrote a blog post in response to this nauseating op-ed found here: http://citizen.typepad.com/eyesontrade/2012/12/wsj-forget-tpps-threat-to-medicines-free-trade-is-good-for-health.html

Also pasted below:

WSJ: Forget TPP's Threat to Medicines. "Free Trade is Good for Health!"

Today the Wall Street Journal published an op-ed with the glowing title, "Free Trade is Good for Health."  The piece gussies up the Trans-Pacific Partnership (TPP) as a healthy dose of medicine for the developing countries that are negotiating the NAFTA-style deal with the U.S. and other Pacific Rim nations.  The op-ed first takes on those who argue that the TPP poses a danger to access to medicines (i.e. the major health and development organizations from nearly every TPP country).  It then frames the deal as part of a benevolent "free trade" legacy which should be given unqualified credit for the wealth health of nations.  The op-ed's omissions in the first argument are as large as its sweeping conclusions in the second.

The TPP's proposed intellectual property chapter includes even greater monopoly protections for pharmaceutical companies than seen in past U.S. "free trade" agreements (FTAs).  The extension of such anti-competitive protections, while safeguarding profits for large pharmaceutical firms, threatens to block generics and elevate the cost of medicines in TPP countries like Vietnam.

One such protection that has been hotly debated within the TPP context is "data exclusivity."  The brainchild of the pharmaceutical industry, data exclusivity goes even beyond patent protections by barring generic drug manufacturers from accessing the clinical test data required to market cheaper, generic forms of a drug, whether patented or not, for years.   Should we be concerned about the implications of such corporate protections for the cost of medicines?  Apparently not.  According to the op-ed, such concerns are the handiwork of "scaremongering NGOs."  (I don't recall that adjective making it into our mission statement.)  The author, Philip Stevens, argues that data exclusivity for chemical drugs is currently granted in the U.S. for five years, and "the chances that the TPP will lengthen the exclusivity period are very low."

But the point is not whether the access-curtailing U.S. data exclusivity periods will be "lengthened," but whether they will be exported to ten other TPP negotiating countries.  Also, the author neglects to mention the U.S.'s new and significantly longer monopoly protection period of 12 years for biologic drugs-used to treat cancer, heart disease, and other deathly illnesses.  Pharmaceutical companies and their cheerleaders have been calling for this extreme, prolonged generics prohibition to be spread to TPP members, diminishing access to life-saving treatments from Vietnam to Peru.

Indeed, this corporate push was recently emblazoned on the very same opinion pages of the Wall Street Journal, with former U.S. Trade Representative Charlene Barshefsky calling for the U.S. to use the TPP to export its 12-year exclusion of generics for biologic drugs.  Our own Peter Maybarduk retorted with a letter to the editor, arguing, "It would be cruel to impose this rule on the many people suffering from treatable conditions in the Asia-Pacific region who cannot afford the extraordinary monopoly prices..."

While the TPP's intellectual property chapter could export the U.S.'s monopoly protections for pharmaceutical corporations, the leaked investment chapter would allow those corporations to directly challenge governments for access-to-medicines policies that they allege as violating the monopoly protections.  The Wall Street Journal op-ed comes on the heels of Eli Lilly's announcement, detailed in our post last week, that the pharmaceutical corporation plans to use NAFTA to directly challenge the Canadian government before a NAFTA-created, three-person tribunal over the Canadian courts' decision to invalidate Eli Lilly's patent.  The courts made the decision after determining that Eli Lilly's drug had failed to deliver on promised utility.   In response, Eli Lilly is demanding $100 million in taxpayer compensation.

As we mentioned, but as the op-ed failed to, the TPP goes even beyond NAFTA in empowering pharmaceutical corporations to launch such attacks on access-to-medicines policies.  NAFTA implies that a corporation could claim "intellectual property" as an "investment" protected by the deal, allowing it to demand compensation for government policies alleged to be a violation of that "investment."  But the TPP makes that possibility explicit by naming "intellectual property rights" under the definition of "investment," raising the prospect of an increase in Eli-Lilly-like challenges to access-to-medicines policies under the TPP.

After wiping aside or completely omitting these concerns that the TPP poses a sincere health hazard, the op-ed author framed the TPP as the continuation of a "free trade" legacy that has played a nearly unparalleled role in improving global health standards.  (That's not my near-hyperbole, but his: "there have been few more powerful forces for improving health in the history of humanity.")  He reasons that trade means growth in income, which means growth in living standards:

Prior to the 1950s, the majority of the world's population lived a precarious life as subsistence farmers. Since then, the opening of global markets, first by the General Agreement on Tariffs and Trade and then by the WTO, has transformed the health prospects of millions by raising incomes. That, and not IP flexibility, made decent food, sanitation, and new medical technologies available.

That's how the Asian countries involved in the TPP-Malaysia, Singapore, Brunei and Vietnam-have witnessed startling improvements in the health prospects of their citizens since the middle of the last century. Singapore signed GATT in 1973, and by 1993 there were no import duties for any product except alcohol, tobacco and automobiles, a situation that largely persists today. Singapore now surpasses many European countries for life expectancy, with Malaysia not far behind.

Oh my.  Where to begin?  How about Singapore.  The author's poster child for the trade-equals-growth-equals-health argument turns out to be a pretty counterproductive candidate.  Stevens, the author, cites 1973 as the year Singapore began opening the door to unfettered trade, with the door cast mostly wide open by 1993.  But the years of highest growth for Singapore happened while the door was still closed.  In the decade before 1973, Singapore's average inflation-adjusted GDP growth rate per person was 9%.  In the decade following its GATT accession, that average growth rate fell to 6%.  In the decade following the declared 1993 free trade finish line, Singapore's annual per capita growth dropped further to just 3%.  One could be pardoned for expecting Stevens to conclude from his Singapore example that nations looking to boost incomes and health standards should reject across-the-board free trade, not embrace it.

Singapore's experience is not unique.  A study by Mark Weisbrot and Rebecca Ray over at the Center for Economic and Policy Research found that from 1960-1980, a period characterized more by import-substitution than by free trade, Latin America as a whole experienced a cumulative growth rate of 92%.  But during the free trade era of 1980-2000, the region's cumulative growth plummeted to a measly 6% over the entire twenty-year period.
Such findings, like the Singapore data, do not necessarily mean that free trade causes lower growth.  Other factors could of course be at play in this history.  But the facts show that the opposite certainly cannot be claimed.  Free trade cannot be categorically credited for higher growth, much less recommended as an unmitigated prescription for better health.  Op-eds making such a sweeping claim would seem to be driven more by ideology than by evidence.  Those struggling to pay for medicine in Vietnam could probably do without more ideology.

Steven Knievel
Program Associate | Global Trade Watch
Public Citizen | Protecting Health, Safety and Democracy
TEL: +1 202-454-5122
215 Pennsylvania Avenue SE, Washington, DC 20003
URL: http://www.tradewatch.org
Twitter: @PCGTW

Check out our blog at http://www.EyesOnTrade.org Follow us on Facebook: www.facebook.com/GlobalTradeWatch

-----Original Message-----
From: Ip-health [mailto:ip-health-bounces at lists.keionline.org] On Behalf Of Thirukumaran Balasubramaniam
Sent: Tuesday, December 18, 2012 2:57 PM
To: Ip-health at lists.keionline.org
Subject: [Ip-health] Philip Stevens op-ed in Wall Street Journal Asia: Free Trade Is Good for Health

Philip Stevens used to be the director of the health programme at International Policy Network (IPN)

KEI has written about IPN's work on tobacco, DDT, climate change and the ivory trade: http://keionline.org/node/672

Here is small excerpt of our piece:

<SNIP>

The Hansard, also records the UK House of Commons' discussion on Climate Change and the Environment which took place on 8 February 2005 when Mr Norman Baker (former Shadow Secretary of State for the Environment, Environment, Food & Rural Affairs; Lewes, Liberal Democrat) noted this about climate change skeptics, IPN and Bate:

That is not to deny that some individuals are advancing the theory that climate change is not occurring. Indeed, I shall consider some of those voices now.

One voice is that of Julian Morris of the International Policy Network, who claims that climate change is a myth. Apparently, sea levels are not rising and Britain's chief scientist is "an embarrassment" because he believes that catastrophe is inevitable. It is worth pointing to the close links between International Policy Network and Exxon Mobil, which gave the organisation $50,000. Exxon lists that donation as part of its climate change outreach programme. There are also close links with the Washington-based Competitive Enterprise Institute.

<SNIP>

On the ivory front, Roger Bate wrote in his piece "Culling to be Kind" for the Institute of Economic Affairs (January 2001) that,

all the evidence suggests that regulated ivory trade is sustainable, provides much-needed revenue directly to local communities and is environmentally beneficial. Sound resource management necessitates elephant culling in order to conserve other species, whilst if local people are able to benefit from the revenue they have stronger incentives to conserve stocks for the future. In addition, the ivory market in Japan is very stable. 20,000 retail outlets sell hankos, popular signature seals given to boys to mark the beginning of manhood. Plastic imitations will not do, so this demand will be constant, providing certainty to African sellers. Also, ivory stockpiles are being used up and the hankos market is hungry for supplies; without legal trade illegal sources would probably be sought.


--

        * OPINION ASIA
        * December 18, 2012, 11:41 a.m. ET

Free Trade Is Good for Health
The TPP can improve access to food and medicine. But Oxfam won't tell you that.

By PHILIP STEVENS

Last week, trade negotiators for the Trans Pacific Partnership (TPP) sat down in Auckland to hammer out a deal. This new multilateral trade agreement between the U.S. and ten Asian and Latin American countries could be the largest of its kind since the collapse of World Trade Organization talks in Geneva in 2008, so it's perhaps not surprising that it's coming under a barrage of left-liberal criticism. Oxfam and others now claim the TPP is bad for health.

These development NGOs argue the free-trade pact will impose onerous new forms of intellectual-property protection on essential medicines that go beyond those agreed by the WTO's Trade Related Aspects of Intellectual Property (TRIPS) 1995 agreement. And that this will make it difficult for the world's poor to access cheap drugs. But this is a misperception NGOs are amplifying, ignoring altogether the positive story about free trade and health.

First off, Oxfam's claim that the TPP will reduce access to essential medicines for poorer TPP countries like Vietnam or Peru is factually untrue. The U.S. government has stated that the TPP will respect flexibilities in the TRIPS agreement agreed in Doha in 2001 that allow developing nations to override pharmaceutical IP rights in a number of circumstances, including health emergencies.

Next, the vast majority of drugs on the World Health Organization's list of essential medicines to treat the most common infectious diseases are off-patent. So IP rules are simply irrelevant to drugs for many conditions prevalent in the poorest countries.


The same is true for common medicines used to treat the most prevalent non-communicable diseases faced by slightly wealthier TPP countries such as Malaysia. So many medicines for diabetes, hypertension and asthma are completely outside the scope of any free-trade agreement.

Enlarge Image

Getty Images
Singaporeans have access to advanced medical technologies like thermal scans.

Still, NGOs raise the specter that the TPP will sidestep traditional patent rules by imposing punitive new periods of "data exclusivity" for essential medicines. Data exclusivity is a form of intellectual property that allows manufacturers of new drugs to retain the right to valuable data generated during clinical trials. The idea is to prevent generic manufacturers from using it to make copies until a fixed period elapses-typically five years in most countries.

Data exclusivity is rapidly surpassing patents as the most important form of intellectual property for medicines, as the 20-year term of a standard patent is increasingly eaten up by lengthy testing and regulatory requirements that drive up R&D costs. After jumping though these hurdles, an innovative medicine typically has around only seven years patent life to recoup costs and make a profit.

Absent radical reform of the drug approval system-which is unlikely to happen any time soon-data exclusivity is then the best assurance innovators have that their investments will reap a return. Otherwise, launching a new drug could become so expensive that patients may not have access to new medicines. That's why such considerations are now included in modern trade deals.

Despite what Oxfam thinks however, the chances that the TPP will lengthen the exclusivity period are very low. The five years of exclusivity for new standard chemical drugs is enshrined in U.S. law, so Washington cannot ask for more in trade negotiations.


Five years is also the standard to which other TPP countries like Vietnam and Malaysia subscribe, so it isn't clear they'll push for more. In any case, the TPP will probably only apply data exclusivity to new drugs, meaning that existing drugs remain unaffected.

Yet in the end, intellectual property and the NGO community's fulminations against it are a sideshow in the wider story about trade and health. These activists and their intellectual backers like to view free trade as somewhere between an agent of imperialist economic repression and a sinister vehicle for America's fast food industry, but the reality is that there have been few more powerful forces for improving health in the history of humanity.

Prior to the 1950s, the majority of the world's population lived a precarious life as subsistence farmers. Since then, the opening of global markets, first by the General Agreement on Tariffs and Trade and then by the WTO, has transformed the health prospects of millions by raising incomes. That, and not IP flexibility, made decent food, sanitation, and new medical technologies available.

That's how the Asian countries involved in the TPP-Malaysia, Singapore, Brunei and Vietnam-have witnessed startling improvements in the health prospects of their citizens since the middle of the last century. Singapore signed GATT in 1973, and by 1993 there were no import duties for any product except alcohol, tobacco and automobiles, a situation that largely persists today. Singapore now surpasses many European countries for life expectancy, with Malaysia not far behind.

Each of these countries has reaped enormous welfare dividends by opening their borders to free trade. With poorer countries such as Vietnam now joining the party, millions could benefit from the TPP-provided they are not put off by scaremongering NGOs.

Mr. Stevens is executive director of the Emerging Markets Health Network at the Institute of Democracy and Economic Affairs (IDEAS), Malaysia.


--

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)

thiru at keionline.org



Tel: +41 22 791 6727
Mobile: +41 76 508 0997







_______________________________________________
Ip-health mailing list
Ip-health at lists.keionline.org
http://lists.keionline.org/mailman/listinfo/ip-health_lists.keionline.org




More information about the Ip-health mailing list