[Ip-health] The Intercept: Trump Administration siding with former Obama Aide at U.N. To Protect Industry Profits

Thiru Balasubramaniam thiru at keionline.org
Tue Aug 7 07:28:19 PDT 2018



David Dayen

August 7 2018, 1:37 p.m.

THE TRUMP ADMINISTRATION, fresh off its battle against breastfeedingat the
United Nations, is once again pressuring countries to revise a U.N. public
health resolution, this time focused on tuberculosis.

The U.S. is seeking to remove language asserting the legal right for
developing countries to override drug industry patents and license low-cost
versions of otherwise expensive TB medicines, arguing over the wording of a
draft declaration for a high-level meeting on tuberculosis scheduled to
take place in September.

But in this effort, the administration has an unlikely ally: a former Obama
administration senior adviser who has criticized Trump.

Josh Black was the White House director for U.N. and Multilateral Affairs
under Barack Obama in 2016. A career diplomat and sanctions negotiator, he
served in the State Department under three presidents, but quit this
January amid “growing disillusionment” with the Trump administration.

Black now works as the point person at the U.N. for the Pharmaceutical
Research and Manufacturers of America, or PhRMA, the nation’s main drug
industry lobbyist. And the U.S. meddling on the tuberculosis declaration
aligns with PhRMA’s stated desire to protect corporate patents.

It’s not exactly surprising to see continuity among Democratic and
Republican presidents on drug patents. The Obama administration repeatedly
fought nongovernmental organizations over access to affordable drugs in the
developing world, advocating for higher prices and pressuring poorer
countries to stop creating generics. “This isn’t something unique to the
Trump administration,” said Leonardo Palumbo, an advocacy manager with
Médecins Sans Frontières, which first raised concerns about the TB

The famously loyal Trump operating hand in hand with someone who worked for
his heated rival Obama and condemned his leadership is an anomaly. In the
rarefied world of global pharmaceutical profits, however, it’s just par for
the course.

THE TRUMP ADMINISTRATION courted controversy last month when the New York
Times reported that it opposed a resolution supporting breastfeeding at the
World Health Assembly. The U.S. reportedly threatened countries with trade
sanctions and withdrawal of military aid if they introduced the resolution,
and later sought to soften the resolution’s text. The aggressive action
aligned with the interests of the $70 billion infant formula industry,
which has thrived on providing misinformation about breastfeeding to the
developing world.

At that same World Health Assembly, countries gathered to prepare for the
first U.N. General Assembly high-level meeting on tuberculosis, which was
announced in December 2016. Tuberculosis is the world’s leading infectious
disease killer and the ninth leading cause of death worldwide, killing
1.674 million people in 2016, per the World Health Organization’s most
recent report. Over half of the 10.4 million new cases that year came from
just five countries: India, Pakistan, Indonesia, China, and the
Philippines. And new strains of drug-resistant TB reached 600,000 people
last year, suggesting a continuing struggle.

Most TB deaths are preventable with early detection and treatment. But the
drugs necessary to treat TB are costly, particularly the
multidrug-resistant strain. “The average regimen can cost up to $2,000,”
said Palumbo.

In 2013, Johnson & Johnson developed bedaquiline, the first new TB
treatment in 40 years, but other than that and Japanese manufacturer
Otsuka’s delamanid, breakthroughs have been scarce because it’s hard to get
a drugmaker to see the profit in creating medicines to eradicate a disease
that primarily affects poor countries. And these drugs have suffered from
slow scale-up; MSF estimated in February that less than 5 percent of those
afflicted with TB had access to the new medicines.

A donation program runs out next year, which could lead to even higher
prices. The high-level meeting is intended to guide the global response to
TB, with the goal of wiping it out. And civil society groups had one major
priority: reaffirm the right for all countries to legally ensure access to
affordable TB treatments.

Under the 2001 Trade-Related Aspects of Intellectual Property Rights, or
TRIPS, agreement worked out at a World Trade Organization meeting in Doha,
Qatar, all countries can use “compulsory licensing” to rip patents away
from drug companies and produce low-cost versions that increase
competition. As Palumbo explains, this flexibility was used to reduce the
cost of HIV medications by 99 percent over a 20-year period. “Ensuring
intellectual property rights should not be a barrier for wider access to
medicines,” Palumbo said.

Again, this is allowable under international trade law. Global society has
agreed that countries’ lack of wealth shouldn’t force them to suffer with
epidemics that kill citizens on a mass scale, for the sake of a profit
margin on a drug company spreadsheet.

But when negotiations ramped up in June, the U.S. rejected this
reaffirmation. According to an early draft reviewed by The Intercept, the
U.S. objected to paragraphs that specifically cited the TRIPS agreement and
the rights of countries to put access to medicines for all above
intellectual property concerns. Instead, the U.S. wanted to soften the
references to TRIPS, and demanded inclusion of this passage: “Intellectual
property rights are an important incentive in the development of new health

The World Health Organization’s Global Strategy and Plan of Action on
Public Health, Innovation, and Intellectual Property includes the same
line, but adds, “This incentive alone does not meet the need for the
development of new products to fight diseases where the potential paying
market is small or uncertain.” The U.S. didn’t want that part in.

According to Médecins Sans Frontières, the U.S. refused to sign the draft
declaration without its changes. The European Union, Norway, South Africa,
Russia, and the Group of 77 coalition of developing nations all supported
the original language; only the U.S. lodged an objection on paper. But in
the end, the final draft released on July 20 included the U.S. version.

“How is it possible that global leaders will gather for the first time to
decide how to tackle the world’s most deadly infectious disease killer, and
yet some countries backed by their big pharma lobbies are pushing to remove
any mention of the need for vital medicines to be affordable?” asked
Sharonann Lynch with MSF’s Access Campaign in a damning statement.

After a four-day “silence procedure,” South Africa formally objected to the
document, reopening negotiations. This sets new negotiations and a somewhat
unclear way forward leading up to the high-level meeting in September.
South Africa’s ambassador to the U.N., Jerry Matjila, did not answer
questions from The Intercept.

If the resolution doesn’t reaffirm compulsory licensing, it sends a
political message that countries opting for this legal procedure would face
blowback from the world’s global superpower. While the TRIPS option would
remain, poor countries wouldn’t have the backing of a global declaration to
support their actions.

Health and Human Services spokesperson Ryan Murphy told The Intercept that
the U.S. has been the global leader in funding the fight against TB,
through research and subsidies for treatments to poorer countries. In a
statement, Murphy said, “Experts and stakeholders know that what impedes TB
patients from receiving treatments and care is not U.S. insistence on basic
protections of intellectual property. Rather, it is the fundamental failure
of healthcare systems to connect sick people with lifesaving treatments
that are readily available and inexpensive.”

Médecins Sans Frontières didn’t think much of this argument. “There’s
nothing stopping government from both taking actions to strengthen health
systems and implement measures to promote access to medicines,” Palumbo
said. “And when countries spend less on medicines, they have more resources
for paid staff.”

But the White House’s line matches the pharmaceutical industry’s position
on the issue. In a response to The Intercept, PhRMA spokesperson Megan Van
Etten said, “The issues involved in the U.N. negotiations on tuberculosis
are much more complex than any one press release has portrayed. Instead of
tackling the real barriers to improved TB treatment – particularly the
urgent need to strengthen and better fund health care systems – the
negotiations risk getting stuck in an ideological trap focused on anti-IP
arguments that aren’t relevant to the unique challenges of tuberculosis

Not only does this mirror the White House’s position on TB, it’s nearly
identical — as in word for word — to a private communication obtained by
The Intercept from PhRMA’s lead representative at the U.N., Josh Black.

President Donald Trump meets with representatives from PhRMA in the
Roosevelt Room of the White House on Jan. 31, 2017. From left, Josh
Pitcock, Chief of Staff to the Vice President; Stephen Ubl, President and
CEO, PhARMA; Kenneth C. Frazier, Chairman and CEO of Merck & Co; the
President; and Robert J. Hugin, Executive Chairman, Celgene Corporation.

Photo: Ron Sachs, Pool/Getty Images

BLACK BEGAN HIS career at the State Department in 2000, working on
negotiations on Kosovo’s future status. He moved to the U.S. Mission to the
United Nations in 2008, working on sanctions related to Iran, North Korea,
Yemen, South Sudan, and several terrorist groups. He helped negotiate the
Iran nuclear deal in Vienna in 2015. This led to a White House position
advising Obama on U.N. and human rights issues.

After the Trump inauguration, Black returned to the State Department and
lasted about a year before resigning. Foreign Policy magazine reported that
Black “had grown disillusioned serving an administration that was
contemptuous of multilateral institutions.” Obama administration colleagues
Samantha Power and Susan Rice praised Black on the way out, calling him a
“national treasure” and a “pro’s pro.”

After Trump withdrew from the Iran deal, one of Black’s biggest diplomatic
triumphs, he vented in a private Facebook message obtained by The
Intercept, lamenting the White House’s “soul-crushing stream of
boorishness, malevolence, and ignorance.” He added that “today’s decision …
wasn’t just bad policy — it was DUMB policy, poorly executed.”

When Black left the State Department, he moved to PhRMA, becoming associate
vice president for international advocacy. There is no direct link of Black
to U.S. posturing over the TB declaration, but his entire job description
is to “support U.S. pharmaceutical industry engagement with the United
Nations” and “ensure that U.N. and other multilateral institutions
understand the importance of protecting intellectual property.”

Representatives from the two major companies involved, Johnson & Johnson
and Otsuka, both were present at civil society hearings on TB, and spoke on
the floor. PhRMA’s role is a bit more obscure. “It’s fair to say they play
a role in U.N. debates,” said MSF’s Palumbo. “But it’s more behind the

Private communications show Black relating the precise argument of his
employer on TB negotiations. He also cited an article from IP Progress, a
pro-intellectual property coalition that includes PhRMA, in making his case.

That article makes the claim that most TB drugs are off-patent, although
this isn’t accurate for newer, multidrug-resistant treatments from Johnson
& Johnson and Otsuka. That talking point, however, wound up in the mouth of
the spokesperson for the U.S. Mission to the U.N. at the TB hearing. “We
would like to take this opportunity to point out that most existing
treatment drugs for TB are off-patent and inexpensive,” she said, adding
that the U.N. should focus on improving health systems rather than be
“distracted” by compulsory licensing.

PhRMA did not make Black available for comment. An attempt to reach Black
through his Facebook page was not returned.

THE OBAMA ADMINISTRATION went hand in hand with PhRMA on the issue of
access to drugs in the developing world. PhRMA chastised India’s
“anti-innovation intellectual property policies” at the same time that
Obama sent John Kerry to the country to pressure them over their use of
generic drugs that cut into industry profits.

Members of Congress have sought to prevent a replay in the Trump
administration. A bipartisan group of senators have sent a series of
lettersto administration officials, imploring them to show leadership on
the epidemic and close gaps in TB diagnosis and treatment around the world.
One of those signatories, Sen. Sherrod Brown, D-Ohio, responded to the
controversy over the draft declaration in a statement to The Intercept:
“The global fight against TB makes us all safer, and the administration
cannot put big pharma’s profits ahead of global health.”

But the Trump administration has consistently backed the drug industry’s
efforts to squeeze more money from abroad. The president’s blueprint on
lower drug prices is predicated on getting other countries to pay more,
with the rather optimistic idea that the industry would subsequently lower
prices in the U.S. And Health and Human Services Secretary Alex Azar, a
former Eli Lilly executive, publicly criticized how other countries
“command unfairly low prices for innovative drugs” at the World Health
Assembly this May.

He reinforced this in Senate testimony in June, calling compulsory
licensing a “socialist” process to “expropriate the product and get the
product even cheaper.”

Putting big pharma’s profits ahead of global health is a bipartisan affair.

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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