Workshop on Intellectual Property, Health Care and International Trade
May 7-8, 1998
There will be a workshop on Intellectual Property and Health Care in
Washington, DC, on May 7 and 8, 1998. The purpose of the workshop will be
to discuss current and developing controversies regarding intellectual
property in international trade agreements, as such they concern public
Persons who work in public health, consumer groups, government, or
international organizations are encouraged to attend.
BACKGROUND Over the past decade, international trade agreements
have increasingly focused on non-tariff topics, including intellectual
property. Today the World Trade Organization (WTO), the North American
Free Trade Agreement (NAFTA) and proposed treaties, such as the
Multinational Agreement on Investments (MAI) and the Free Trade Area for
the Americas (FTAA) have controversial intellectual property provisions
which have significant impact on public health policy. In addition, the
United States is engaged in a plethora of bilateral and multilateral trade
negotiations on health care and intellectual property topics.
Pharmaceutical and biotechnology interests are very active in shaping the
international debate in these matters, while consumer and public health
groups are generally inactive.
The topics are diverse. The following are only a few of the current
controversies over intellectual property.
Economics of Drug Development. NIH spends an average of $7
million for FDA Phase I, II and III trials. Pharmaceutical companies
report to the IRS they spend about $3 million per drug on human use
clinical trials for Orphan Drugs, but industry spokesman often assert that
the cost of FDA approval is more than $300 million per drug. What do
policy makers or public health experts actually know about drug
development costs? What goes into a study of drug development
costs? How much does it actually cost to do clinical trials on a
drug? Once a compound has been invented and identified as a
candidate for clinical trials, how much of the "cost" of drug development
has already been done? What are the differences between
out-of-pocket, expected, and capitalized costs? How are overhead
costs calculated? How much of industry R&D is directed at
development of new drugs? Why don't government bodies actually
collect data on drug development costs. Are industry trade
association studies reliable? How are cost "estimates"
used and misused in policy debates?
- Scope of Patents in Health Care. As Biotechnology
evolves, what types of inventions will be patented? What are the
disputes over non-obviousness or utility of biotechnology patents.
How broad should biotech patents be? Why should consumers or public health
groups care? How much of the human body should be patented?
- Health Registration Data. United States trade officials and
some pharmaceutical companies are seeking greater secrecy of data used to
justify registration of new drugs, despite the fact that the U.S. FDA is a
model for disclosure and openness. Trade officials and
pharmaceutical companies are also seeking greater levels of "unfair
competition" protections for unpatented testing data, which will delay for
years introduction of generic drugs. Since claims for protection of
unpatented testing data are based upon the need to protect investment,
rather than the need to reward innovation (which is rewarded separately
under patent law), there are some that argue that "unfair competition"
protections for testing data should be reasonably related to costs of the
testing, and that compulsory licensing should be used to protect consumers
from abuses. Bristol-Myers Squibb, one company seeking to expand the
level of protection for health registration data, has used such provisions
to protect its billion dollar per year monopoly on a governemnt invention
- Bolar Exemptions and Use of Patents in Research.
In 1984, a provision in the U.S. Hatch-Waxman Act reversed a court
ruling that prohibited Bolar Pharmaceutical from testing a Roche Products
patented drug. Bolar was using the patented drug in tests it needed
to seek FDA approval for a generic that would be marketed when the Roche
patent expired. This provision in U.S. law speeds the introduction
of patents after patents expire. U.S. trade officials have objected
to similiar provisions being included in national laws outside the
U.S.. For example, U.S trade officials are lobbying very hard
against a Bolar type exemption in Cyprus. There are also broader
questions of the ability of medical researchers to patents in medical
- Compulsory Licensing. Traditionally, governments have had
the ability to issue or require compulsory licensing of patents or other
intellectual property in areas of public interest. The U.S. has done this
in the area of some patents on pharmaceuticals or biotechnology
inventions, sometimes during reviews of mergers. The issuance of very
broad patents in the biotechnology area, and the increasing use of patents
on treatment regimes and other areas, has increased interest in the role
of compulsory licensing in high technology medicine. Developing countries
are also interested in compulsory licensing of medical inventions.
Pharmaceutical companies are seeking to severely narrow if not eliminate
compulsory licensing of medical inventions.
- Second Use Patents, Evergreen Patents, and related issues.
Some countries permit so called "second use" or "swiss" patents, while
others do not. For example, if there is a discovery that a drug currently
in the public domain has a new use, inventor can patent the rights to use
the public domain drug for the new use. This raises questions about status
of the public domain drug. In the United States, companies patent the
doses and/or methods of delivery used to treat an illness. These treatment
regime patents were recently used by Bristol-Myers Squibb to block
introduction of generic versions of Taxol in the U.S. Market. (The patents
were licensed to BMS from the NIH).
- Parallel Imports. Some nations permit imports of
pharmaceuticals legally purchased in international markets, while other
countries prevent cross border trade. There are several aspects of the
issue. The limitations of cross-border trade permit drug companies to
engage in price discrimination, charging higher prices in countries with
less internal competition. Pharmaceutical companies claim that cross board
trade encourages imports of counterfeit drugs. Some public health groups
say that counterfeiting is a serious problem, but is caused by high
domestic prices and occurs in countries without parallel imports, and can
be addressed separately from the parallel import issue. This is a very
important issue for countries with small domestic markets, which want to
get the best world price on the international market. U.S. trade officials
are actively seeking to discourage this practice in South Africa and other
- Trademarks and Public Health. Pharmaceutical companies
claim that trademark rights shield industry from efforts by governments to
promote generic drugs or permit parallel imports. Infant formula and
Tobacco companies fight regulations on marketing practices under WTO rules
regarding trademark rights.
- Pricing of Government Funded Medical Inventions. A
bipartisan coalition of U.S. Congressman is seeking new pricing rules for
pharmaceutical inventions developed with public funds.
- Alternatives to TRIPS. The WTO’s Agreement on
Trade-Related Aspects of Intellectual Property is called TRIPS. It
contains rules about intellectual property from a commercial perspective.
Provisions in the TRIPS regarding patents, trademarks, health registration
data and other items set the basic framework which virtually all countries
will have to follow, or face trade sanctions. The provisions of the TRIPS
are controversial in several areas, but particularly in the area of health
care for developing countries. Prior to the TRIPS many developing
countries did not have patent protection for pharmaceuticals – permitting
easy entry by generic equivalents, and lower drug prices. Under TRIPS,
these countries will see increases in drug prices, and new barriers for
the poor’s access to medicines. Health Action International and the
Consumer Project on Technology have proposed an alternative to the TRIPS
approach which is based upon burden sharing for research and development.
This approach would require countries to meet targets for R&D
investments, but would give countries greater discretion on the mechanisms
to fund R&D, and the ability to direct R&D spending on topics
which strengthen domestic scientific institutions and address domestic
public health problems.
The Plan for the
Workshop Representatives from industry groups, government
organizations and academia have been invited make presentations and answer
questions on a variety of topics. However, the main focus of the meetings
will be the dialogue between participants over IP specific issues. This
will be a "working group" workshop. People will be encouraged to ask
questions and make contributions during discussions. We will begin with a
review of the institutional framework for policy making in international
trade venues, followed by brief presentations and discussions of specific
IP issues. It is expected that participants will outline specific
positions on topics, such as the appropriate international norm for
disclosure of health registration data, or the scope of Trademark rights
in the context of generic drug substitution, or other topics, and that
these positions will be discussed by participants. This is expected to
take up the first day and half.
The second half of the second day will focus on
organizing strategies for public health and consumer groups.
include an identification of areas for coordinated actions to
increase consumers' inputs and
perspectives on health and IP debates
and policy making, and the development of statements that can help build
that coordination and be the basis for taking positions in national and
Prior to the meeting, there will be an internet email forum on workshop
topics. Participants will be encouraged to submit and discuss various
topics in cyberspace prior to the Washington, DC meeting.
LOCATION The meeting will be held at the Hotel Washington, which
is located at Pennsylvania & 15th Street, N.W.. The Hotel Washington
is across the street from the White House, only 10 minutes from National
Airport, and convenient to the Metrorail system. The URL for the Hotel is
. Reservations info by email is at: email@example.com
REGISTRATION Persons interested in
participating in the workshop should contact Catherine Gavin <firstname.lastname@example.org>
or James Love <
email@example.com> at the Consumer
Project on Technology, voice 202.387.8030, fax 202.234.5176. There is no
fee, but people should provide advance registration.
Please send the following information to firstname.lastname@example.org, or fax to
Catherine Gavin at: 202.234.5176
Postal Address: _______________________________
Electronic Mail ___________________
Updated information about the workshop will be on the Web at:
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