[Ip-health] Notes from KEI's testimony at today's USTR Special 301 hearing

Zack Struver zack.struver at keionline.org
Wed Mar 2 12:25:25 PST 2016


Notes from KEI's testimony at today's USTR Special 301 hearing
Submitted by James Love on 1. March 2016 - 15:26

These were
 notes from my testimony for KEI at today's USTR Special 301 hearing

Big market puts countries on the #special301 watch list

We have reviewed the submissions of PhRMA, BIO, BSA, IIPA and the US
Chamber of Commerce’s Global IP Center, among others. One thing that jumps
out atof you is that the primary predictor of whether or not a countryies
is targeted by industry is the size of itsthe economy. In Northern Africa,
South America and Asia, being big means being a target. We can provide the
detailed statistical analysis of this in a follow up submission.

BSA submission

We agree with and appreciate the concerns of BSA regarding government
involvement in the use of unlicensed software.

We also understand and appreciate BSA’s concerns over government policies
that discriminate against foreign suppliers of software. Here we note also
that the activities of the United States in spying on everyone, including
anyone working for a foreign government, creates an environment where
people around the world have legitimate concerns about backdoors and

BSA has also raised concerns about rules that ban government use of
cloud-based email programs and require data to remain within countries, and
we also understand those concerns. However, again, the Snowden revelations
of US spying, and the lack of effective regulation of consumer privacy,
contribute to these problems. So long as the United States is seen as an
aggressive actor in surveillance and as having weak protections on privacy,
these problems will probably get worse. I think Tim Cook at Apple is trying
to explain this to the FBI right now.

We disagree with the BSA opposition to government mandates to make source
code of software open, but again, open source code allows third parties to
find surveillance backdoors, and to address the need for greater
interoperability between programs, and to ensure competition, particularly
in the many markets where monopoly power exists.


We agree that ancillary copyright is a threat both to U.S. internet
companies, and more generally, a threat to the public, and undermines
access to knowledge. Governments have legitimate concerns over tax
avoidance by companies, but taxing quotations and/or hypertext links is not
the solution. We agree this is a violation of TRIPS and a barrier to trade.

Place countries doing this on the Priority Watch list, and consider an
out-of-cycle review.

PhRMA, BIO and US Chamber.

PhRMA targeted 20 countries in the Special 301. This included complaints
about reimbursement policies in 18 countries, making pricing rather than
IPR the most common topic.

In the United States, a 2015 Kaiser Family Foundation survey found 72
percent of the public believes that drug costs are unreasonable.

According to another survey, nearly seven-eighths of the country's top
healthcare leaders favor the government taking a bigger role in curbing the
rising cost of prescription drugs, 86% supported giving the federal
government the authority to negotiate drug prices on behalf of Medicare and
Medicaid beneficiaries.

We also note that both Democratic candidates and Donald Trump for the GOP
are campaigning to introduce tough curbs on high drug prices.

If you think your job is to keep drug prices high, you might talk with the
rest of America about that.

A number of the submissions supported by the pharmaceutical industry have
targeted India. India is important both because it is a large country with
more than a billion persons, and because itIndia is frequently looked to as
a supplier of affordable generic products in other countries.

KEI is working on compulsory licensing cases in several countries, and like
others will look toward India to play a role in providing a supply of

In 2016, KEI asked the US government to use its royalty free or march-in
rights in patents for the prostate cancer drug Xtandi. This product was
invented at UCLA on grants from the Army and the NIH, and is sold to US
residents at a price of $129 thousand per year, by Astellas, the Japan
owned firm that acquired the licenses to the UCLA patents on the drug. The
price in the United States is far higher than in any other country, even
though it was invented on US government grants. If we succeed in that
effort, we would consider sourcing generic products from India.

In closing, we note that on Sunday, February 28th, 2016, the United Nations
Secretary-General’s High Level Panel (UNSC-HLP) on access to medicines
concluded a request for submissions, looking for ways to reconcile human
rights and access with innovation. There were a very large number of
thoughtful submissions for dozens of experts and stakeholders. We will
highlight some of those submission in our reply comments, including those
that seek to replace the current focus on high prices with new approaches
that consider R&D as the central objective of global norm setting, and
which lead to the progressive delinkage of R&D costs from product prices.

Zack Struver, Communications and Research Associate
Knowledge Ecology International
zack.struver at keionline.org
Twitter: @zstruver <https://twitter.com/zstruver>
Office: +1 (202) 332-2670 Cell: +1 (914) 582-1428

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