Consumer Project on Technology
P.O. Box 19367
Washington, DC 20036
June 9, 1997
United States Trade Representative
Dear Ms Barshefsky:
Thank you for your letter of May 5, 1997, in which you responded
to our February 4, 1997 letter, regarding Argentina trade sanctions.
We recognize that the United States government is engaged in
a long running dispute over Argentine government policies regarding
patent protection for pharmaceutical drugs. For several years
we have known that the United States government has objected to
Argentine policies on compulsory licensing, pipeline protection
and parallel imports. While we disagree with the USTR's position
on each of these topics, they were not discussed in our
February 4, 1997 letter. Instead we specifically addressed the
two new and novel theories under which the USTR was seeking bilateral
Our first point concerned the Argentine laws concerning health
registration data. The second point was the USTR announcement
that sanctions would be based in part upon political activity
by the Argentine private sector. We are troubled by these
new actions, and urge your office to undertake a review of current
policy on both points.
With respect to health registration data, we are opposed to efforts
to establish international norms which would prevent regulators
from recognizing and relying upon publicly available evidence
of drug efficacy and safety, including such information as the
actions of U.S. or other national regulators. The U.S. is asking
Argentina and other countries to create a particular form of sui
generis property rights for health registration data, that
is designed to limit entry into the market for pharmaceuticals
which are not protected by patents. We are not persuaded that
any sui generis protection for health registration data
is warranted. Health care research that leads to invention is
already protected by patents, and thus it appears as though you
are mostly protecting drugs for which research was funded by the
government, and where the invention was placed in the public domain.
Even if some level of protection is desired, the particular form
of protection sought by the United States is inappropriate as
an international norm. At a very minimum, one would expect such
a sui generis system to have protections against abuse,
such as a system of compulsory licensing. As noted in our earlier
letter, the current experience with Taxol illustrates the shortcomings
of the USTR proposal.
Taxol is an unpatented drug which was invented by government scientists.
The health registration data for Taxol was a series of clinical
trials sponsored by the National Institutes of Health (NIH).
By exploiting exclusivity provisions for health registration data
which were part of the Hatch Waxman Act, Bristol-Myers Squibb
has been able to charge extremely high prices for Taxol. We are
attaching a copy of a medical bill for an uninsured breast cancer
patient who was required to pay $2,324.70 for each 270
milligram injection of Taxol (Many injections are required).
NIH was able to produce this amount of Taxol for $162 in small
quantities, and Bristol-Myers Squibb paid $67.50 to produce the
drug with larger production runs. The fact that Bristol-Myers
Squibb invested about $5 million in Taxol for FDA approval, and
expects to earn more than $1 billion this year alone from Taxol
sales, illustrates the problems with the current system -- consumers,
many of them women suffering from breast and ovarian cancer, are
harmed by the excessive form of protection and the lack of safeguards
Secondly, we are surprised that the USTR would base trade sanction
on the fact that private sector firms are politically active.
As you must know, there is a widely held view that the USTR itself
has become an instrument of large corporate interests in trade
negotiations. Certainly no one can deny the fact that PhRMA,
the Businesses Software Alliance, the Motion Picture Association
of America, Boeing, IBM, Microsoft, and other trade groups and
corporations rely upon the USTR to advance their interests, and
are politically active all over the world. Under what theory
can the United States sanction one country for permitting private
sector political activity when our trade negotiations are so clearly
coordinated with corporate lobbying efforts here and elsewhere?
While we generally support efforts to curb the influence of large
corporations in trade negotiations, the one sided nature of sanctions
in the Argentine case have the effect of enhancing the already
extensive political power of PhRMA. In this case, the Argentine
domestic pharmaceutical companies and generic drug companies from
Canada and elsewhere have brought balance to an international
debate which has been dominated by PhRMA and its members.
We would like to meet with your staff to review whatever analytical
work was done to justify the U.S. Government's current position
on the two specific issues which we raised in our February 4,
1997 letter and which we elaborate on today. We are also enclosing
a copy of Mr. James Love's presentation to the May 1997 FTAA Business
Forum Workshop on Intellectual Property, held in Belo Horizonte,
Brazil. This paper sets out several specific recommendations
for changes in U.S. trade policy on matters concerning health
care and intellectual property. We ask your support for these
recommendations in the next round of the FTAA negotiations, and
look forward to discussing these ideas with you and your staff.