James Love
                         Thiru Balasubramaniam
                         Consumer Project on Technology
                         P.O. Box 19367
                         Washington, DC 20036


February 18, 2000

Mr. Joseph Papovich
Assistant U.S. Trade Representative
for Services, Investment, & Intellectual Property
Office of the United States Trade Representative
600 17th Street, N.W., Room 301
Washington, DC

Re: Request for Comments on Special 301 
Dear Mr. Papovich:

     These are the comments of the Consumer Project on Technology
(CPT) on the USTR 301 review as it relates to disputes involving
health care.  As you know, CPT maintains a web page on health
care and trade disputes at http://www.cptech.org/ip/health, and
there is much additional information on this page regarding our
positions on issues.

     In general, we ask that the USTR follow the policy
recommendations of the Trans Atlantic Consumer Dialogue (TACD),
including the specific recommendations on pharmaceutical drugs
made at this April 1999 meeting in Brussels and the February 2000 
meeting in Washington, DC.

     For background, the TACD was created in 1998, and is made up
of 24 US and 40 EU consumer organizations.

TACD RESOLUTIONS - February 2000

       Pharmaceuticals - access to medicines in developing
     1.   TACD recommends that public health considerations be
paramount in trade policies as they relate to access to
          The US and EU governments should review trade policies
to ensure that developing countries do not face trade related
barriers for access to essential medicines and other medical
technologies, in a manner consistent with the World Health
Assembly (WHA) Revised Drug Strategy, EB103/4, which calls upon
member countries: 
          (1) to reaffirm their commitment to developing,   
          implementing and monitoring national drug policies and 
          to taking all necessary concrete measures in order to 
          ensure equitable access to essential drugs;
          (2) to ensure that public health interests are              
          paramount in pharmaceutical and health policies;  and 
          (3) to explore and review their options under               
          relevant international agreements, including trade 
          agreements, to safeguard access to essential      
          TACD asks the US, the EU and its member countries to
report back to the TACD on the steps taken to implement the WHA
Revised drug strategy in trade policy.
     2.   TACD supports the creation of a WTO Working Group on 
Access to Medicines.
          This working group would identify problems concerning 
access to medicines, provide a public health framework for the
interpretation of key features of WTO agreements, and evaluate
and propose changes in the WTO rules that would expand access to
     3.   TACD recommends the US, the EU and other developed
countries enter into an agreement to support far higher levels of
R&D for neglected diseases.  Today there is very little research
and development on diseases such as malaria, chagas disease and
other illnesses that have an impact on the poor.  R&D efforts for
neglected diseases should be designed with access in mind, and
address issues such as reasonable pricing and the allocation of
intellectual property rights.
     4.   TACD recommends the US, the EU and its member countries
enter into agreements with the World Health Organization (WHO) to
give the WHO licenses to use publicly funded health care
inventions in developing countries. 
     5.   TACD asks the US and the EU to support patent
exceptions for the export of medicines.  The EU and the US should
send communications to the WTO supporting interpretations of WTO
TRIPS provisions that would permit patent exceptions for
production of medicines for export, when the legitimate rights of
patent owners are protected in the export market.  For example, 
patent exceptions should permit the production and export of a
medicine to a country that had issued a TRIPS compliant
compulsory  license for medicine.  A failure to address this
issue will substantially undermine the usefulness of compulsory
licensing of medicines in countries with small domestic markets. 
     6.   TACD demands that The US and EU governments stop
putting pressures on developing countries to adopt levels of
intellectual property protection  for medicines that exceed the
requirements of the WTO TRIPS accord.   This is consistent with
Article 1 of the TRIPS, which states that WTO member countries
"shall not be obliged to . . . implement in their law more
extensive protection than is required by this Agreement."
            Pharmaceuticals:  Data Exclusivity and Health
                         Registration Data
     1.   TACD opposes the harmonization of data exclusivity for
pharmaceutical registration data to 10 years.  The US and the EU
both provide periods of "data exclusivity" in the regulatory
approval of pharmaceutical drugs: in the US this is 5 years, in
the EU it is 10 years.  The EU period was originally designed to
compensate for a lack of patent protection on pharmaceutical in
some EU member countries, and the lack of patent protection on
medicines from biotechnology.  This rationale is no longer valid 
with the new WTO TRIPS rules that require broad patent protection
in all EU member countries.
     2.   TACD recommends that companies that seek data
exclusivity protections be required to disclose the costs of
investments.  Data exclusivity provisions are part of   a growing
class of sui generis forms of protection that are designed to
protect investment, rather than innovation.  Because data
exclusivity isn't a reward for   invention (which is already
rewarded by patents) but rather a protection of investment, there
should be greater transparency of the basis for the protection
and a reasonable relationship between the investment and the
     3.   TACD asks the EU and the US  to report on trade
disputes that are related to introduction of generic forms of
Paclitaxel in the EU Market.  TACD should be provided with copies
of all correspondence and memorandums that have been sent between
the US and the EU or its member countries on the trade related
aspects of   Paclitaxel registration in the EU.  The US and the
EU should also report to the TACD who invented Paclitaxel, and
who sponsored the clinical trials used for EU and US marketing
     4.   TACD asks the European Commission's DG Enterprise to 
report on the barriers to entry for generic forms of Paclitaxel
in the EU market.   
     5.   TACD asks DG SANCO to report on the public health
consequences of barriers to entry for generic forms of Paclitaxel
in the EU market.

       Pharmaceuticals: Early Working of Patents and Research
     1.   TACD supports so called "Bolar" exceptions in patent
laws to permit firms to test generic drugs and prepare data
required for marketing approval by regulatory agencies, prior to
the expiration of a patent. This is needed to ensure that
consumers benefit from the timely introduction of competition
when patents expire.  Health and safety regulatory measures
should not be  misused as a barrier against competition.
     2. TACD asks the US and the EU to reject overly restrictive
interpretations of anti-discrimination language in Article 27.1
of the TRIPS.  Article 27.1 should not be interpreted as
requiring a "one size fits all" patent law.    The language in 
Article 27.1, that requires that "patents shall be available and
patent rights enjoyable without discrimination as to . . . the
field of technology," should not be interpreted as preventing
countries from addressing public interest concerns in patents,
when provisions to address those public interest concerns are
consistent with the TRIPS framework.  Article 30 of the TRIPS
regarding exceptions to patent rights should be interpreted to
permit countries to address public interest concerns, including  
those specifically related to fields of technology.
     3. TACD recommends that the EU not require Central and
Eastern European (CEE) countries to eliminate "Bolar" exceptions
from patent laws as a condition for EU membership.
      Pharmaceuticals: Transparency of pharmaceutical economics
     1.   TACD recommends the US and the EU governments undertake
the following measures:
     i).  Any application for data exclusivity should include a
disclosure of the costs of data collection.
     ii). The EU and the US should require firms that market
pharmaceutical drugs in the US or the EU market to disclose, for
each product,
          A. annual global (and national) revenues, 

          B. costs of clinical trials, disaggregated by timing
and nature of trial (Phase I, II, III, IV, etc), the number of
patents and the duration of the trial, 

          C. when the product involves licenses from third
parties, the royalty payments and terms, and 


          D. the role of the government in the development of the
drug, including the awarding of grants, cooperative research and
development agreements, licenses, tax credits and other
     iii) Governments should publish data detailing the
government's own costs of conducting clinical trials, which can
be used as a benchmark for the cost of clinical trials.
     iv). The government should publish reports detailing public
expenditures on the purchase of products developed initially with
public funds. 
     2. TACD recommends that consumers and policy makers obtain
better information about pharmaceutical economics.  One of the
most vexing issues in pharmaceutical policy making is the paucity
of data to justify pharmaceutical industry assertions regarding
drug development costs, profit margins or other relevant economic
data.  Governments have been negligent in collecting independent
data on pharmaceutical economics.  Accurate data on the economics
of the pharmaceutical industry are needed to evaluate a wide
range of government policies, including, for example:

       i.   patent extensions,
       ii.  pricing,
       iii. market exclusivity for health registration data,
       iv.  orphan drug market exclusivity,
       v.   compulsory licensing,
       vi.  government technology transfer policies, 
       vii. scope of patents, and 
     There is a substantial public interest in having more
detailed disclosures of private sector R&D investments, to
address such questions as what is the percentage of   R&D
investments spent on development of new and innovative products,
as opposed to "me too" therapies?   How much of the private
sector R&D budget is spent on non-essential medicines?  What is
the private sector allocation of spending between pre-clinical
development, clinical trials, and post approval R&D?  How much
R&D is   spent on tropical illnesses and other diseases that
affect the poor?  How much did the drug benefit from public
           TACD Position on Patents on Genetic Diagnosis
     TACD asks the European governments to immediately apply for
compulsory licenses or to use patent exceptions, permitted under
the TRIPs agreement, to address technologies used for the
screening of genetic diseases.  Consumers and patients are harmed
by unreasonable uses of patents that monopolize the screening for
genetically  determined diseases such as the BRCA1 and BRCA2
patents associated with breast cancer.  Public health authorities
and laboratories in Britain and Sweden say that   unreasonable
use of such patents presents a threat to the public health, and
reduced access to screening procedures. 
     TACD asks DG SANCO to report on the public health and  
ethical consequences of patenting of genes and technologies for
screening of genetic diseases. 

       TACD April 1999 Recommendations on Pharmaceuticals

     The TACD recommends that the governments of the US and the
EU should consider the following:

     1.   Regarding World Health Assembly and the World Trade

     Require that a country engaged in WTO dispute resolution
proceedings be permitted to request a report from the WHO on the
public health aspects of the policies that are subject to review
by the WTO. 

     2.   Regarding Patents and Exemptions for Exports.

     Agree that a country may provide exemptions to patent rights
to companies who are exporting the product to another country
where patent rights have expired or where patent rights have been
licensed under compulsory licensing and the legitimate interests
of the patent owner has been protected under Article 31 of the
WTO TRIPS agreement. 
     3.   Regarding Parallel Imports of Pharmaceuticals.

     Not bring trade sanctions against poor countries who seek to
use parallel imports to obtain cheaper access to pharmaceuticals. 

     4.   Regarding developing countries and medical patents.

     Not use trade pressures against developing countries over
access to essential medicines if those countries have satisfied
WTO/TRIPS requirements for the protection of patents. Developing
counties should not be prevented from using compulsory licensing
to expand access to medicines, if the compulsory licenses are
issued in compliance with Article 31 of the TRIPS agreement. 
    5.    Regarding compulsory licensing.

Agree that governments, the World Health Organization (WHO) and
the World Intellectual Property Organization  (WIPO) should
consult with the academic community, consumer groups and a wide 
range of industry groups to determine where compulsory licensing
of medical technologies is needed to overcome market failures,
such as those that are related to complex inventions, follow on
inventions, or for providing access to inventions on reasonable


James Love

Thiru Balasubramaniam