21 December 2006

Secretary of State Condoleeza Rice

U.S. Department of State

2201 C Street NW

Washington, DC 20520

Ambassador Susan Schwab

United States Trade Representative

600 17th Street, N.W.

Washington, DC 20508

Dear Secretary Rice and Ambassador Schwab:

We are writing to express our concern that the United States Department of State and the United States Trade Representative have intervened in the decision by the government of Thailand to issue a compulsory license on patents for the AIDS drug efavirenz, and to explain why the US government should refrain from such actions.

The US government is reportedly asking the Thai government to engage in prior negotiation with patent owners before issuing compulsory licenses. Not only is this not required under the World Trade Organization (WTO) rules when the compulsory license is for government use, it is not required under US law. What the WTO does require is that Thailand "promptly" notify the patent owner when it issues a compulsory license. Thailand has clearly done this. The US government should not be in the business of micro-managing Thailand's dealing with the patent owners, as long as Thailand abides by its WTO TRIPS obligations.

In 2001 the United States government and every other member of the World Trade Organization (WTO) announced the signing of the Doha Declaration on TRIPS and Public Health. This historic agreement said:

We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, 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.

In this connection, we reaffirm the right of WTO members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.

Thailand is obviously trying to do exactly what the Doha Declaration promised it could. Respecting Thailand's decision to exercise its right under the Doha declaration is not only a matter of concern for Thai patients in need of affordable AIDS treatment, but also a matter of good faith in honoring America's international commitments.[1]

Patient advocates and others who are concerned about the AIDS crisis have welcomed the compulsory license on efavirenz as a major step forward for access to AIDS drugs in Thailand. Thailand has stood out among developing countries for its efforts to expand treatment opportunities for AIDS patients, but the high price of newer drugs like efavirenz is a significant hurdle for the long term sustainability of AIDS treatment programs in Thailand and other developing countries.

Experts who are struggling to implement treatment programs in developing countries have concluded that it is essential to create a competitive generics market for efavirenz and other newer AIDS drugs that are patented in Brazil and other markets.[2]

Brazil did not have patents on medicines until 1996. For those AIDS drugs invented before 1996, Brazil continues to purchase generic versions. This has stimulated entry by generic manufacturers, driving the prices of active pharmaceuticals ingredients (APIs) down over time. For example, the global prices of APIs (per kilo) for lamivudine (3TC) fell from more than $25 thousand dollars in 1996 to $5 thousand by 1999, to less than $300 by 2004, illustrating the dynamic nature of cost savings from generic competition.

In contrast, the global prices for products invented after 1996, and protected by patent in Brazil, are much more expensive. This is because, contrary to popular misconception, Brazil has not issued compulsory licenses, and for AIDS drugs invented after 1996, only buys from patent owners at negotiated prices. In a 2004 study by the World Health Organization (WHO), the average API prices for six AIDS drugs purchased as generics by Brazil were $382 to $582 per kilo. For another six AIDS drugs that were patented in Brazil, the average prices for generic APIs were $1,717 to $3,020. (See table below). This illustrates the important role of economies of scale, and the global impact of decisions by large purchasers to buy (or not buy) from generic suppliers.

Thailand's decision will have important consequences, not only for Thailand, but for any developing country that needs to obtain low cost generic products. If Thailand follows through and begins to buy from generic suppliers, it will create a larger global market for generic products, stimulate competition, and lower prices everywhere for the newer products.

While the benefits of expanded generic competition are widely appreciated among experts, many developing countries have been reluctant to issue compulsory licenses because of fears that the United States government will oppose such actions and exert pressure.

We note also that the United States is itself a major purchaser of AIDS drugs in developing countries, through our contributions to PEPFAR and the Global Fund for AIDS, TB and Malaria. Thus, any action by Thailand to create more generic competition for the new AIDS drugs will benefit the US taxpayers who are shouldering the burden of these outlays.

Finally, we note that Thailand is among the countries that are supporting proposals for a treaty on R&D in the World Health Organization (WHO) new Intergovernmental Working Group on Public Health and Innovation. We agree with those who suggest this is a more appropriate way to address the US interest of sharing the global costs of medical R&D than policies that raise prices for AIDS drugs and other essential medicines.

We ask that the United States government refrain from any opposition or interference with the Thai efforts to use WTO flexibilities to buy generic AIDS medicines -- including pressuring or otherwise seeking to persuade Thailand to engage in negotiations with Merck rather than proceed to execute the compulsory license it has issued - and consider more constructive ways to promote our national interest in matters concerning innovation and access to medicines.

NOTES

[1] The USTR has publicly stated that its side letters in some Free Trade Agreements (FTAs) give countries flexibility to issue TRIPS-compliant/Doha-fulfilling compulsory licenses. Efforts by the U.S. to prevent or reverse the actual granting of such licenses raises doubts about the credibility of the United States, making it more difficult for the United States to achieve other objectives in our FTA negotiations.

[2] See the August 2006, World Bank Report, "The Economics of Effective AIDS Treatment: Evaluating Policy Options for Thailand." Page169 states "by exercising compulsory licensing to reduce the cost of second line therapy by 90 percent, the government would reduce its future budgetary obligations by US$3.2 billion discounted through 2025."

Sincerely,

ACT UP East Bay, Oakland, CA

AIDS Policy Project, Philadelphia

American Jewish World Service

American Medical Student Association

Center for Health and Gender Equity (CHANGE)

Center for Policy Analysis on Trade and Health (CPATH)

Church World Service

Community HIV/AIDS Mobilization Project (CHAMP), Los Angeles, CA

Consumer Project on Technology (CPTech)

Corporate Responsibility Program, Province of St. Joseph of the Capuchin Order

Edmonds Institute

Essential Action

Global AIDS Alliance

Harm Reduction Coalition

Health Gap

International AIDS Empowerment

Maryknoll Office for Global Concerns

Middle East Children’s Alliance (MECA)

Missionary Oblates of Mary Immaculate

National Action Network, Kansas Chapter

Oxfam America

Peoples’ Health Movement

Progressive Intellectual Property Law Association (PIPLA)

Results USA

Stop HIV/AIDS in India Initiative (SHAII)

Student Global AIDS Campaign

Treatment Action Group (TAG), New York, NY

Universities Allied for Essential Medicine (UAEM)

Malini Aisola, CPTech, Washington DC

Tali Averbuch, Boston University Medical Center, Boston, MA

Professor Brook K. Baker, Program on Human Rights and the Global Economy, Northeastern University School of Law, Boston, MA

Dean Baker, Co-Director, Center for Economic and Policy Research, Washington, DC

Jon Beckler, paralegal, Stockton, CA

Anand Bhat, University of Texas Medical Branch MD program, Galveston, TX

Timothy Boyd, Policy Research Assistant, AIDS Healthcare Foundation Los Angeles, CA

Garrett Brown, Coordinator, Maquiladora Health & Safety Support Network, Berkeley, CA

Sister Judy Byron, OP, Northwest Coalition for Responsible Investment, Seattle, WA

John Celichowski, OFM Cap, Corporate Responsibility Program Province of St. Joseph of the Capuchin Order, Milwaukee, WI

Jennifer Chase, MS, Epidemiologist, Fort Collins, CO

Sae-Rom Chae, University of Illinois at Chicago College of Medicine MD program, Chicago, IL

Mardge Cohen MD, Medical Director of WE-ACTx and Director of Women's HIV Research, CORE Center, Chicago, IL

Andee Cooper, Uganda Program Manager, Foundation for International Medical Relief of Children, Washington, DC

Christine Curry, Loyola University MD/PhD Program, Chicago, IL

Jim Daidson, Bellingham, WA

Michael H. Davis, Professor of Law, Cleveland State Univ. College of Law and Director of PIPLA, the Progressive Intellectual Property Law Association, Cleveland, OH

Marquita Decker, University of Texas Health Science Center MD/MPH program, Houston, TX

 
Daniel A. del Portal, University of Pennsylvania School of Medicine MD program, Philadelphia, PA

Iuliana Dit, Wayne State University School of Medicine MD program, Detroit, MI

Séamus Finn, OMI, Director, Justice Peace/Integrity of Creation Office, Missionary Oblates of Mary Immaculate

Anna Fiskin, Case Western Reserve University School of Medicine MD program, Cleveland, OH

Sean Flynn, Associate Director, Program on Information Justice and Intellectual Property, American University, Washington College of Law, Washington, DC

Alyson D. Follenius, MPH Candidate, The George Washington University School of Public Health and Health Services Department of Environmental & Occupational Health, Washington, DC

Mena Gorre, Public Affairs Manager, AIDS Healthcare Foundation, Los Angeles, CA

Dr. Vineeta Gupta, Director, Stop HIV/AIDS in India Initiative, Washington, DC

Kimberly Hadley, University of Kansas School of Medicine MD program, Kansas City, KS

Hillary Hai, Peace Corps Volunteer Thailand, Los Angeles, CA

Nathan Heckerson, University of Kansas School of Medicine MD program, Kansas City, KS

Ben Herbstman, Weill Medical College of Cornell University MD program, New York, NY

Liza Goldman Huertas, Yale School of Medicine MD program, New Haven, CT

Amit Khera, University of Pennsylvania School of Medicine, Philadelphia, PA

Jeremy Kirchoff, University of Kansas MD program, Lenexa, KS

Sathia Krishnamoorthy, Boston, MA

John Iversen, co-founder of the Berkeley Syringe Exchange, Oakland , CA

Emily Lawson, United States Peace Corps volunteer Thailand, Houston, TX

QuyChi Le, University of Kansas Medical School MD program, Olathe, KS

Roberta J. Lee, RN,MSN,MPH, Cincinnati, OH

Alexandra Liggatt, University of Kansas Medical School MD program, Kansas City, KS

Jamison Litten, Peace Corps Volunteer, Peace Corps Thailand, Orinda, CA

Jing Luo, University of Illinois at Chicago College of Medicine MD program, Chicago, IL

Mary Manivong, University of Kansas School of Medicine MD program, Kansas City, KS

John May, University of Kansas, School of Medicine MD program, Kansas City, KS

Dr David McCoy, B.Med, DrPH, Co-managing Editor Global Health Watch

Aimee McHale, JD, Graduate Student, University of North Carolina School of Public Health, Chapel Hill, NC

Bridget McHenry Ali, Program Manager, The White Ribbon Alliance for Safe Motherhood, Washington, DC

Ann Mead, Graduate Student, George Washington University School of Public Health, Washington, DC

Jon F. Merz, MBA, JD, PhD, Associate Professor, Department of Medical  Ethics University of Pennsylvania, Philadelphia, PA

Suerie Moon, Pre-Doctoral Candidate, Harvard University’s John F. Kennedy School of Government, Cambridge, MA

James M Nordlund, Communications Director, Kansas Chapter of the National Action Network, Stockton, KS

Amy Nunn, Doctoral Candidate, Population and International Health Department, Harvard University, Cambridge, MA

Jeremy Ogusky, Metropolitan Washington Public Health Association, Washington DC

Delane Olsen, University of Kansas School of Medicine MD program, Wichita, KS

Kayla Oursler, MPH student, Boston University School of Public Health, Boston, MA

Kevin Outterson, Professor of Law, West Virginia University, Hershey, PA

Giao Pham, University of Kansas School of Medicine MD program, Kansas City, KS

Thomas Pogge, Professor of Political Science, Columbia University, New York, NY

Christin N. Price, Weill Medical College of Cornell University MD program, New York, NY

Mary M. Puttmann, MSc, Georgetown University MD program, Washington, DC

Amit V. Raghavan, University of Kansas School of Medicine MD Program, Wichita, KS

Srividhya Ragavan, Associate Professor of Law, University of Oklahoma Law Center, Norman, OK

Joana Ramos, MSW, Cancer Resources & Advocacy, Seattle, WA

Bridget Reutener, Graduate student, GW School of Public Health and Health Services, Arlington, VA

Daniela Resh, Graduate student, GWU School of Public Health and Health Services, Washington, DC

Maria Rishoi, Program Assistant, National Association of County and City Health Officials, Washington, DC

Rosemary Ryan MMS, MD, Medical Mission Sisters Sector North America Coordinator for Mission, Philadelphia, PA

Cathy Rowan, Corporate Responsibility Coordinator, Maryknoll Sisters, Bronx, NY

Emily E. Sanders, Legislative Assistant, US House of Representatives, Washington, DC

Helena M. Sause, OP, Member of the Dominican Sisters' Leadership Team, Columbus, OH

Christie Shrestha, MPH, Clinical Research Coordinator, University of Kentucky Department of Neurology, Lexington, KY

S. Kendall Smith, University of Kansas School of Medicine MD program, Kansas City, MO

Susan K. Sell, Professor of Political Science and International Affairs, the George Washington University, Washington, DC

Sural Shah, Pennsylvania State University College of Medicine MD program, Hershey, PA

David Sturza, Peace Corps Volunteer, Project Specialst, Don Jan District People Living with HIV/AIDS (PHA) Group

Mary Sullivan, Texas Tech University Health Sciences Center MD program, El Paso, TX

Chong Kee Tan, CBA Specialist, Asian & Pacfific Islander Wellness Center, San Francisco, CA

Sophia Tcheung, Texas Tech University Health Sciences Center MD program, Lubbock, Texas

Blair Thedinger, University of Kansas School of Medicine MD program, Kansas City, KS

Sharon Treat, Executive Director, National Legislative Association on Prescription Drug Prices, Hallowell, ME

Laura Turiano, MS, PA-C, Right to Health Care Campaign, People's Health Movement, Oakland, CA

Robert Ullom, University of Kansas School of Medicine MD program, Kansas City, Kansas

Ashwin Vasan, Program Associate, Partners in Health, Ann Arbor, MI

Daniel Warren, Kansas University School of Medicine, Kansas City, KS

Margaret Weber, Coordinator of Corporate Responsibility, Adrian Dominican Sisters, Adrian, MI

Kristin Wilson, University of Kansas School of Medicine MD program, Kansas City, KS

Anne Woodruff, MPH Candidate, The George Washington University, Washington, DC

Linda Pang, Thomas Jefferson University MD program, Philadelphia, PA

Nina Yamanis, MPH, Graduate Student of Public Health University of North Carolina at Chapel Hill, Chapal Hill, NC

Lea Zeldin, Editor, Health Writers, Madison, WI

Non-US groups and individuals

Actions Traitements, Paris, France

ACT UP Paris, France

Asia Pacific Network of People Living with HIV/AIDS (APN+), Bangkok, Thailand.

Association de Lutte Contre le SIDA (ALCS), Morocco

Association SunAids, Douala, Cameroon

European AIDS Treatment Group (EATG), Brussels, Belgium

Fundación Apoyo y Solidaridad, Cali, Colombia

Japanese Network of People Living with HIV/AIDS (JaNP+), Tokyo, Japan

Latin American Network of PLWHA - RedLa+

Tuberculosis Television (TBTV), Laval, France

Thai AIDS Treatment Action Group (TTAG), Bangkok, Thailand

World AIDS Campaign, Amsterdam

Jorge Bermudez, ENSP/Fiocruz, Rio de Janeiro, Brazil

Maurice Cassier, CNRS, Paris, France

Julien Chauveau, researcher/ORS-Inserm, Marseille, France

Benjamin Coriat, University Paris XIII, Paris, France

Bernard Couttolenc, PhD / USP, Sao Paulo, Brazil

D. Cyrillo, Dr/USP, Sao Paul, Brazil

Elize Massard da Fonseca, Ministry of Public Health and PHD Candidate, Oswaldo Cruz Foundation, Rio de Janeiro, Brazil

Daniel de Beer, Lawyer, Vrij Universiteit Brussel, Belgium

Katy De Clercq, staff member, Sensoa, Antwerp, Belgium

Marcio De Sa, PNDST/AIDS, Brasilia, Brazil

Véronique Doré, Head Social Sciences/ANRS, Paris, France

Lia Hasenclever, IE-UFRT, Rio de janeiro, Brazil

Naoko Kawana, Advocacy Coordinator, Japanese Network of People Living with HIV/AIDS

Gaelle Krikorian, CRESP, University Paris XIII/EHESS/inserm, Paris, France

Bernard Larouze, Inserm, Paris, France

Constance Meiners, MS/SAS, Brasilia, Brazil

Jean-Paul Moatti, University de la Méditerranée, Inserm, Marseille, France

Mulumba Moses, The Law Development Centre, Kampala Uganda

Heeseob Nam, Chairperson, Patent Attorney / Intellectual Property Left, Horizon Law Group, Seoul, Republic of Korea

Fabienne Orsi, University Paris XIII, Paris, France

Ethel Pengel, Chair-Person, STG Mamio Namens Projekt, Suriname

Christina Possas, PN-DST-AIDS, Ministry of Health, Brasilia, Brazil

Paulo R. Teixeira, Dr/SES, Sao Paulo, Brazil

Armand Totouom, Programmes Officer/Coordinator, Association SunAids, Douala, Cameroon

Luc Van Leemput, Doctors Without Borders, Brussels, Belgium

Peter Wiessner, Aids Hilfe Munich, Germany

Moacir Wuo, Dr UMC, Mogi Das Cruz, Brazil

Yazdanpanah Yazdan, CNRS, Lille, France