Lamy and Zoellick clash over terms of new WTO medicines deal

Health GAP (Global Access Project) • Act Up-Paris
September 13, 2003

(Cancun) During an NGO briefing on September 12 EU Commissioner Lamy said that he did not share the US’s view that countries should be not be allowed to import cheap medicines if they have some local production capacity to make drugs on their own. This clash between the US and the EU is over interpretation of a fundamental aspect of the agreement—which countries are allowed to use it.

Just two weeks after a compromise deal on generic drug access for countries with insufficient manufacturing capacity was reached at the WTO in Geneva, significant conflicts over which countries can qualify to use the agreement are already emerging, according to AIDS activists who have been critical of the terms of the deal.

At the direction of pharmaceutical companies, USTR Zoellick is pressuring poor countries that have some domestic manufacturing capacity to opt out of importing generic medicines under the agreement, even if manufacturing capacity in these countries is too limited to result in broad access to lowest cost medicines.

The US has been pressuring countries to opt out of the deal because the US claims they have sufficient domestic capacity. In the most recent case, USTR Zoellick has aggressively lobbied the Philippines not to import generic medicines. “Bullying countries to exclude themselves from this deal when millions of lives are at stake is unacceptable,” said Sharonann Lynch of Health GAP. “Countries must be permitted to determine independently whether or not they want to import or export under this deal.”

The US’s narrow interpretation of “insufficient capacity” contradicts basic economic principles about how to achieve reductions in medicine prices. The US government acknowledged this in a recent State Department cable from an American Embassy to Washington D.C.: “large economies of scale in the [pharmaceutical] industry are the norm and…small production runs would tend to raise prices, not lower them” (July 1999).

“Bob Zoellick understands how economies of scale work. But the USTR is refusing to accept a rational, economically viable solution because that would support generic competition—and the pharmaceutical industry will not permit that to happen—no matter how great the human consequences,” said Asia Russell of Health GAP.

“The schizophrenic interpretation by the US and the EU reveals that this solution was designed to give the illusion of consensus and not to tackle the problem of developing countries’ lack of access to medicines,” said Gaelle Krikorian of Act Up-Paris. “Their rush to get this issue off the table before the Cancun Ministerial has resulted in a solution that was never designed to work.”

For more information: contact Asia Russell +1 267 475 2645
Gaelle Krikorian 998 120 9229



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