Oxfam Statement on the TRIPS Council Special Session on Patents and Access to Medicines

18 September 2001

The next two months offer an unparalleled opportunity to shift WTO patent rules so that life-saving medicines are not priced out of reach of people living in poverty. Unfortunately, the US and Swiss governments are blocking proposals to shift the rules in favour of public health. Oxfam urges industrialised countries, above all the USA, to support proposals put forward by African countries, to agree to an in-depth review of TRIPS, and to cease putting pressure on developing countries to implement unduly restrictive patent measures.

The outcome of key World Trade Organisation (WTO) meetings over the next two months will have a major effect on the lives of people living in poverty. Will vital medicines be affordable in future, or will WTO patent rules price them out of reach? Unfortunately, the United States and Swiss governments are blocking attempts by developing countries to shift the rules. On the eve of the ministerial conference in Doha, lack of progress on this issue threatens to undermine still further public confidence in the WTO and to alienate its developing-country members. More importantly, it threatens the health of millions of people in developing countries, which is why Oxfam is promoting a public campaign for WTO members to take urgent action.

On 19 September, countries belonging to the WTO will meet in Geneva to discuss the public-health impact of these controversial rules, known as the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Participants will discuss proposals for the Doha summit in November. These are crucial opportunities for governments to correct the fatal mistakes made when drawing up what was the most significant extension of patenting rights in the twentieth century.

Prior to the 1999 Seattle summit, over a hundred developing countries called for changes to the TRIPS agreement to make it less damaging for public health and for development. But the proposals fell on deaf ears. Widespread public concern about the issue has since forced many industrialised countries to shift positions. Progress is now possible - but only if the WTO, and most notably the US government, changes its policy. The challenge is all the greater since corporate lobbies, led by the pharmaceutical sector, are out in force to defend the rules they designed and promoted. Transnational companies, being by far the greatest beneficiaries of globalised intellectual property (IP) rules, have large interests at stake. Last year, US companies earned US$36.5 billion abroad from royalties and licensing fees alone, more than half the world total.

From a health perspective, the essential flaw of TRIPS is to oblige all countries, rich and poor, to grant at least twenty years' patent protection for new medicines, thereby delaying production of the inexpensive generic substitutes upon which developing-country health services and poor people depend. And there is no upside: the increased profits harvested by international drug firms from developing-world markets will not be ploughed back into extra research into poor people's diseases - a fact some companies will in private admit.

Two million children die every year from pneumonia, almost all of them in developing countries. US-based Pfizer's best-selling antibiotic, azithromycin (Zithromax), is particularly good for treating child pneumonia. It is under patent in Kenya, where it costs as much as in Norway. But Kenya only spends US$17 per head every year on healthcare, while Norway spends US$2300. Kenya is not allowed to import the generic equivalent available in India at one-fifth of the price. Indian companies manufacture azithromycin because the government has not yet implemented medicine patenting. If TRIPS-compliant rules had come in earlier, manufacture would have been impossible.

Many rich countries argue that TRIPS is a blend of principles and general rules which gives countries sufficient freedom in the design of national laws, and provides safeguards for protecting the public interest, such as leeway to override patents on health grounds. In practice, the US government presses developing countries into passing 'TRIPS plus' legislation based on the most restrictive interpretation of TRIPS, shorn of the already-weak safeguards that TRIPS allows, and containing levels of IP protection that go well beyond anything mandated by TRIPS. These pressures, from which Brazil, South Africa, the Dominican Republic, and Thailand have all suffered, are backed by the threat of unilateral trade sanctions, which can be authorised either by Section 301 of the US Trade Act, or by successfully appealing to the WTO 'court'. The US administration also makes extensive use of treaties such as the Free Trade Area of the Americas and dozens of investment agreements to achieve the same aims. However, rigid defence of high levels of IP protection is a risky strategy for industrialised countries. Refusal to countenance even pro-public health interpretations of TRIPS would provoke a backlash against the patent system, reduce the chances of consensus over a new round of trade talks, and further damage the public standing of the WTO.

What the WTO member states do now about TRIPS and access to medicines is widely seen as a decisive test for whether global trade is managed for people or merely for profit. For the sake of the millions of people in poverty, Oxfam urges the industrialised countries:

Contact: Michael Bailey in Geneva (mobile) +44 1865 7968 196102

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