May 12, 1998 letter to James McGinchey, US Department of State, regarding health care and intellectual property

May 12, 1998

James McGlinchey
Office of Intellectual Property and Competition
United States Department of State
Washington, DC 20520

via fax 1.202.647.0892

Mr. McGlinchey:

We are writing to express our appreciation for your participation at the Washington, DC meeting on Intellectual Property Rights, Health Care and Trade Agreements, and also to emphasize our concerns about U.S. policy.

This week the World Health Assembly (WHA) will meet in Geneva. One of the resolutions before the WHA asks member states "to ensure that public health rather than commercial interests have primacy in pharmaceutical and health polices and to review their options under the Agreement on Trade Related Aspects of Intellectual Property Rights to safeguard access to essential drugs."

There was a consensus among public health and consumer groups that it is important for governments and international bodies to be clear that in health care sectors, public health considerations indeed have primacy over commercial considerations. This is not to say that intellectual property rights are not important or useful in achieving public health goals. Rather, it speaks to the framework under which competing policy objectives are evaluated and resolved.

For example, at the conference there was discussion of several disputes concerning the use of generic drugs, including government efforts to encourage generic substitution, the mandatory use of the generic name on the label of the drug, and so-called "Bolar" disputes, regarding the non-commercial testing of drugs prior to patent expiration. Public health officials strongly support government efforts to promote generic drug competition, and we ask that trademark and patent disputes be evaluated in the context of the impact of the policy on public health.

Likewise, we ask that disputes concerning the public health regulation of the marketing of infant formula, tobacco or other products be judged on the basis of public health concerns. Thus, for example, we would not expect poor countries to be threatened with trade sanctions for efforts to implement World Health Organization guidelines on infant formula marketing, as recently occurred in Guatemala, nor should Canada or other countries be threatened with NAFTA and GATT sanctions for plain paper packaging of cigarettes.

There are a number of disputes over the appropriate level of intellectual property protection for patents on pharmaceuticals and biotechnology, health registration data, orphan drug market exclusivity and related topics. As you know, intellectual property regulation is a complex topic, and one cannot rely upon simple minded "more is better" rules. It is inappropriate to always choose the policies which lessen competition and raise drug prices the most, or to evaluate such disputes solely in terms of how the disputes benefit U.S pharmaceutical and biotechnology firms. Government sponsored monopolies and regulatory entry barriers to competition lead to higher prices, and should be justified only when the policies are necessary to promote public health objectives. Overbroad protections should be avoided, and governments should be encouraged to adopt policies which enhance universal access to health care technologies. Countries with low incomes face different problems in providing universal access to health care than do developed countries, so "one size fits all" approaches may be inappropriate.

At the workshop there was much discussion about policies to encourage and provide access to "Essential Health Research." As you know, in the United States the government spends more than $14 billion for research at the National Institutes of Health, which it plans to double, and it also funds health care research in other Public Health Service agencies, the Department of Energy, the Department of Defense and elsewhere. Many participants expressed concerns that government policies to transfer taxpayer funded research on drugs for cancer, AIDS, malaria and others severe illnesses to the private sector were designed to benefit commercial interests more than consumers. In some cases these disputes are matters of foreign policy, such as the many international disputes over the introduction of generic versions of Taxol, a cancer drug invented by NIH scientists, but marketed by Bristol-Myers Squibb. The U.S. government recently placed South Africa on its Sec. 301 Watch list for not providing "unfair competition" protection for health registration data for Taxol, even though in the United States, the Taxol registration data expired in December 1997. The grounds for the 301 Watch list were that "some" countries still provide longer protection than does the U.S. Here again, it would be appropriate for the U.S. government to consider public health concerns, and seek to justify why a government funded invention such as Taxol (all clinical trials in question were sponsored by the NIH, not Bristol-Myers Squibb) should not be available in generic form in South Africa, a country with many poor consumers.

There was also much concern about the adequacy of funding for research on tropical diseases such as Malaria, whether or not the consumer interest was protected in the commercialization of inventions developed at Walter Reed Army Institute of Research, and the lack of incentives for research on adverse drug effects, appropriate technologies and other important areas of research which do not produce marketable products.

Some conference participants further suggested that countries use innovative "reinvestment" approaches to promote essential health research. These approaches have been considered by the U.S. government in several contexts beginning in 1983, and also in the UK. Some say the PhRMA companies will claim that such requirements will be in violation of the TRIPS and the proposed multinational agreement on investments (MAI). The U.S. should evaluate the public interest in increasing the level of essential health care research before it takes action against such measures.

There are also many other disputes. Poor countries want to permit parallel imports of patented drugs, as do the UK and other developed countries, in order to obtain competitive world prices. This is very important for countries with small internal markets. Compulsory licensing is also important. Disputes about compulsory licensing of essential drugs are expected to reach the World Trade Organization. There is also much concern by medical researchers that compulsory licensing will be important in new gene therapies and other complex technologies. In evaluating the reasonableness or appropriateness of compulsory licensing programs, the U.S. government should indeed begin by considering the impact of the program on public health.

There was also much discussion about the need for developing countries to receive better legal assistance in evaluating or negotiating new treaties. Many participants expressed gratitude to the World Heath Organization for publishing monographs and reports on health aspects of TRIPS and other IPR issues, and we encourage the U.S. to support such efforts. This is particularly important given the immense resources that PhRMA and other industry groups spend lobbying various governments on these policies. Independent information restores some measure of balance in debates, and prevents future misunderstandings.

Again, thank you so much for taking the time to meet with public health and consumer groups to discuss these important and complex topics. We look forward to a broader dialog with U.S. officials on the development of trade policies which promote public health objectives.


James Love
Consumer Project on Technology

Bas van der Heide, International Coordinator - Europe
Dr. K. Balasubramaniam, International Coordinator - Asia South Pacific
Dr. Roberto Lopez, International Coordinator - Latin America
Health Action International

Dr. Amir Attaran
Malaria Project
Center for Study of Responsive Law
Washington, DC

Robert Weissman
Essential Action
Washington, DC

Dr Patrick Bond
Senior Lecturer, Economic Policy
University of the Witwatersrand Graduate School of Public and Development Management, Johannesburg, South Africa

Niyada Kiatying-Angsulee
Chairperson of Drug Study Group
Drug Study Group (Thailand)

Sumlee Jaidee
Health & Development Foundation

Richard Laing, MD, MBChB, MSc
Associate Professor
Department of International Health
School of Public Health
Boston University

Llew J. Gibbons, Fellow
Franklin Pierce Law Center

Jerome Dumoulin
Institut de Recherche Economique sur la Production et le Developpement Universite Pierre Mendes France

Celine Gounder
Project Manager
Princeton Project 55 Tuberculosis Initiative

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