[Ip-health] Humanosphere op-ed on TPP: How a new trade agreement will hurt the poor’s access to medicines

Jamie Love james.love at keionline.org
Sat Mar 16 07:29:22 PDT 2013

Tom Paulson at Humanosphere wanted something on the TPP, and this is what I
wrote for him.


March 15, 2013

Op-Ed: How a new trade agreement will hurt the poor’s access to medicines

Guest Column by James Love, director of Knowledge Ecology International


President Barack Obama, in his 2013 State of the Union address, referred to
an international trade proposal called the Trans Pacific Partnership
Agreement, or TPP for short. It’s a massive set of trade negotiations with
a lot at stake, affecting about 40% of all global commerce from the use of
the internet to the price of drugs.

Salon called the Trans-Pacific Partnership the biggest trade deal you’ve
never heard of, and speculated it “could potentially be the most
significant foreign and domestic policy initiative of the Obama

So why haven’t you heard of it? Three reasons:

First, the negotiations of the TPP are held in secret, making it hard to
Second, trade agreements are perceived to deal with technical and obscure
issues that news editors think would bore most readers to death.

Finally, the White House makes it sound as if the trade agreement simply
imposes “our” norms on foreigners, making it seem less relevant to U.S.

The TPP, in fact, will be a game-changer for all of us and is woefully
lacking in media coverage.

Enough is known by activists about the negotiations to paint a fairly clear
picture of its impact on global prices for medicines. That’s what I’m
focusing on here. In particular, the TPP is poised to reverse major
concessions on intellectual property rights protection for medicines in
developing countries that were put in place in 2007 by the Bush

I think it’s both surprising and worth reporting that the Obama
Administration is actually more hostile to the interests of the global poor
than was the Bush Administration.

The membership of the TPP will include the U.S., Mexico and Canada, the
NAFTA members, but also four additional high income countries (Australia,
New Zealand, Singapore and Brunei Barussalam) as well as four developing
countries with lower incomes (Chile, Malaysia, Peru and Vietnam).  Debating
whether to join are Japan, South Korea, Thailand, the Philippines, and
other countries, making this agreement even more significant.

As the 16th round of negotiation finished this week in Singapore, delegates
were pressing the United States for details on its proposals for new
intellectual property right and pricing norms for medical inventions
(including pharmaceutical drugs, vaccines and medical devices).

While negotiations are shrouded in extraordinary secrecy as regards the
general public (while big corporate lobbies have access to negotiating
texts), the general contours are well understood.  The White House office
of the United States Trade Representative (USTR) is pushing for rules that
expand and extend monopolies on medical inventions and shrink the ability
of governments to negotiate lower prices. Here’s how:

* Low standards of patentability for pharmaceutical drugs, making it easier
to extend monopolies beyond the initial patent protection for active

* Mandatory patents for new uses of old drugs.

* Extensions of patent terms beyond 20 years.

* Automatic monopolies on the scientific test data used as evidence that
drugs are safe and effective.

* Procedures for big pharma companies to contest state reimbursement levels
for high priced medicines.

* New rights for owners of patents to sue governments over the use of
compulsory licenses.

Our government considers higher prices and stronger monopolies for medical
technologies as a good thing because several big drug companies and medical
device manufacturers have significant U.S. operations, and hence the
assumption that anything that is good for these companies is good for the
United States.

Ignored in this perspective is the fact that incomes are far lower in
several TPP member countries, and what the U.S. biomedical industry wants
simply translates into less affordable health care for the poor. In 2011,
the United States per capita income was 3.3 times that of Chile, the
best-off developing country in the negotiation. The ratio of US income was
4.8 for Malaysia, 8 for Peru and 34.2 times for Vietnam.

Figure 1:  2011 per capita income for U.S. and selected developing countries

The White House is using the TPP to reverse a policy announced by President
Bush in May 10, 2007, which relaxed our trade policy as regards
intellectual property right standards for  medical inventions in developing
countries. Among other things, the 2007 Bush policy eliminated the U.S.
Government’s demand that developing countries grant extentions of the term
of patents for drugs beyond  20 years, and it made it easier to register
generic drugs.

The reporting on the TPP typically has not highlighted the fact that  the
Obama administration has taken a much harder line with developing countries
than did President Bush, and that this is a source of considerable alarm
among development and health NGOs trying to monitor and influence the

Doctors without Borders/MSF, Oxfam, Public Citizen, HealthGap, the Third
World Network, Health Action International (HAI), KEI and others have tried
to engage the White House since the first day of the negotiation, to little
or no avail as regards its positions.

The Obama Administration appears largely indifferent to the impact of these
policies on poor persons living in developing countries But it should be
noted the Administration is also creating standards that will have a
negative impact back home, particularly as the U.S. seeks to control
spending on health care.

These costs are not mere abstractions.

My wife is billed $7,861 every 21 days for an injection of trastuzumaba
product sold by Roche under the brand name of Herceptin to control the
spread of metastasized breast cancer.  I work for a small organization with
precarious financing, and if we lose our health insurance we are looking at
$137,000  per year just for this drug, a potentially ruinous situation.
Even with insurance, we still have to negotiate for coverage.  In
considering the possiblities, I’m anxious to see that cheaper biosimiliar
products can enter the U.S. market.

At present, Roche has a global monopoly on the sale of Herceptin.
 Herceptin was first brought to market by Genentech, a company that only
invested in the development of the drug after Revlon and other charities
raised money to show that it might work.

Today Genentech is owned by Roche, and Herceptin generates more than $.5
billion per month for the Swiss company. Before a biosimiliar drug can
enter the U.S. market to compete, it must overcome tough regulatory hurdles
include a twelve year monopoly on the use of drug registration test data.
 Roche and other big drug companies are lobbying to push these types of
 barriers to entry into the TPP, and both lock-in the worst features of the
U.S. rules and apply them to all the TPP members, including very poor
countries that have just a fraction of our income.

Deadly monopolies

The WHO estimates that 175 thousand women die from breast cancer every year
in developing countries. Today there is virtually no access to trastuzumab
in developing countries, despite the fact that roughly 20 percent of the
women with breast cancer can potentially benefit from the drug.  The World
Health Organization is just now considering two petitions (one co-sponsored
by my organization, KEI) to place trastuzumab on its Essential Medicines
List (EML), something that has been put off for years because of its high

Prices for cancer drugs are now so expensive that no country can afford to
provide the coverage  for medicines that would be justified by the medical
benefits of the products.   This has increasingly become a trade issue, as
the United States and the European Union try to force tough intellectual
property right standards and pro-drug company drug pricing rules around the

When governments are asked to cut off access to new cancer drugs and other
life-saving medicines, they demand something in return, so the United
States is paying for these demands in other ways — many of them will lead
to losses in other parts of the U.S. economy, particularly from businesses
that are not politically active enough to influence the trade negotiations.

Here it is worth noting that the while the United States has an impressive
pharmaceutical industry, so do other countries.  More than half of the 15
largest drug companies are foreign owned.  Pfizer, currently the largest
U.S. drug company, has more than 70 percent of its employees working in
other countries.   According to the World Intellectual Property
Organization (WIPO), the three largest holders of patents mentioning cancer
are the european firms Novartis, Roche and Astrazeneca.

This dismal picture can be changed.  The White House has been urged to
embrace more constructive trade policies that deal with both innovation and
access to new medicines.

The most important idea is to begin to consider medical R&D as the
objective rather than high drug prices.   Once trade negotiations focus on
R&D as the end, there are plenty of creative ways to share the global costs
of R&D for new medicines that don’t so directly harm consumers in general
and poor persons in particular.

A 2008 proposal by Barbados and Bolivia in a World Health Organization
(WHO) negotiation over intellectual property rights and innovation is
particularly relevant to the cancer examples.

They proposed the creation of a multicountry prize fund for cancer.  The
idea, first proposed by a Thailand health official, is to radically
demonopolize cancer drugs in developing countries, permitting competition
among generics suppliers to drive prices down.  In return, the developing
countries would devote a share of their cancer treatment budgets to a prize
fund to reward innovations in new drugs and better diagnostics. The cancer
prize fund would delink R&D costs from drug prices — something the WHO now
considers a promising way forward.

If both innovation and access count, we can and must do something different
in the TPP negotiation.


James Love KEI
James (Jamie) Love is director of Knowledge Ecology International, an
organization in Washington, D.C., that monitors and advocates for the
social justice implications of intellectual property and knowledge
resources. He grew up in Bellevue, son of the first elected mayor of that
fair city, and has for decades been working as an advocate on these wonky,
technical matters to ensure commercial, government and multilateral
organizations like the UN agencies adopt policies that also serve the
interests of the poor.

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