Maryknoll Office for Global Concerns

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Trade: TPP threatens access to medicines

The following article was published in the March-April 2015 NewsNotes.

The Maryknoll Office for Global Concern’s statement, Trading in justice: The local impact of global economic decisions, says, "Catholic tradition supports the right to private property, but conditions that right on the common good. We believe there is a social mortgage on intellectual property as there is on physical property… The right of the private sector to benefit from patented products or business investments must be subordinated to the right of all people to access the basic necessities of life, including food, health care and essential medicine."

In 1994, the World Trade Organization (WTO) developed the Trade Related Aspects of Intellectual Property Rights Agreements (TRIPS) and marked the greatest expansion of intellectual property protections in history. Previously governments had more freedom to determine intellectual property rights (IPR) regimes that worked for their reality such as whether a field of technology could be excluded from protections, the patent term, and other rules for IPR. The TRIPS agreement was meant to clarify and set standards for patents, but ultimately created more confusion and opened the door for legal battles between states and pharmaceutical companies.

Some of these legal battles led developing countries to bring a proposal to the 2001 WTO meeting in Doha. The proposal reinforced the safeguards, or "flexibilities," for public health in TRIPS. The final document became known as the Doha Declaration. The declaration affirmed many of the flexibilities including that each country had the right to grant compulsory licenses on medicine patents, and that countries can exclude therapeutic, diagnostic, and surgical methods from patents, but are not required to do so. (Read more in the UN Development Program’s paper, The Doha Declaration Ten Years on and Its Impact on Access to Medicines and the Right to Health.)

These flexibilities allowed for countries to produce and grow a local pharmaceutical industry to market in country and to export drugs to other countries that do not have manufacturing capacity. But in 2005, the WTO decided exportation could only be approved with a two thirds vote by WTO members. Still, many countries face pressure from the U.S. and Europe to not use generic versions of patented medicines at all, even if they pay royalties.

With almost every U.S. trade agreement, the pharmaceutical industry tries to further strengthen IP protections and close the flexibilities provided under TRIPS. And the constraints on the TRIPS flexibilities are leading to legal battles even today. In 2011 Eli Lilly sued Canada for $500 million when the Canadian courts overturned their exclusive right to produce two drugs and they are now in legal proceedings under the World Bank’s Investor State Dispute Settlement (ISDS) court.

The ISDS proceedings are held in non-transparent trade tribunals outside of ordinary and publicly accountable judicial systems that allow multinational companies to sue governments for enforcing their own domestic laws on public health and the environment for alleged lost profits. In February 2014, Rep. Jared Polis (D-CO) introduced a bill that would prevent ISDS inclusion in future trade agreements. The language mirrors a similar bill in Australia’s parliament right now.

On May 10, 2007 Congress struck a deal with then President George W. Bush to ensure access to medicines for low and middle income trading partners. This put a stop to efforts undermining TRIPS flexibilities, but civil society groups criticized the deal because it used World Bank definitions to determine country income categories. [The World Bank defines a high income country at a Gross National Income (GNI) above $12,746. This means that Chile, a country with a GNI of roughly $14,000, would be subject to the same patent laws as the United States.]

With the current Trans-Pacific Partnership (TPP) negotiations, the U.S. is again looking to close the gap on TRIPs flexibilities by renegotiating trade deals with old partners. These changes are referred to as "TRIPS+."

While the negotiations for the TPP are not open to the public, some information on the intellectual property rights chapter has been shared through Wikileaks, most recently in October 2014. One concern is the proposal to extend patents for 20 years and then allow pharmaceutical companies the ability to make small tweaks that might change the application or drug form (think capsule vs. tablet) and then extend the patent for another 20 years. This practice, called "evergreening," can continue for decades if the company finds new uses for that formula, thereby preventing the manufacture of generics.

Another concern is the length of patents for developing countries. The October 2014 proposal creates a tiered system with countries phasing into the TPP patent scheme and accessing generic medications at different times. As of October 2014, not all countries have been categorized into a tier yet. What is known is that the U.S., Japan and Singapore would have to phase in the new regime soonest and have the longest wait for generics (Tier A). Peru and Vietnam would have the longest implementation period and the least amount of time for implementation (Tier C). Mexico and Brunei would have some transition period in between (Tier B); the other countries have yet to be categorized.

Some of the more harmful and extreme proposals were removed from the latest text such as patents on surgeries and other medical procedures and adherence to patents on pharmaceuticals in hospital settings. But another piece attacks India’s patent scheme, which is not even a party to the negotiations but supplies most of the world’s generic drugs because of its lax patent law.

Public Citizen’s Access to Medicines program, a consumer advocacy project that monitors how trade impacts access to medicines, criticizes this new proposal as eventually making all countries comply with the same standards and ultimately limiting access to medicines to people who need it the most, even in developed countries. It found that an earlier proposal, referred to as "Addendum I," would create more flexibility for countries by not using a temporal model, but rather basing access to medicines on whether they attained a certain level of development. Addendum II, or the October 2014 plan, also goes further in weakening the flexibilities in TRIPS.

Oxfam and Medecins Sans Frontieres (MSF, Doctors Without Borders) did a study that applied the income limits for qualifying for Medicaid benefits in the U.S. to the incomes of people living in the TPP countries. They chose this standard since people on Medicaid qualify for generic access. They found that 70 percent of Chileans, residents of what is considered a high income country that likely could be placed in Tier A with the United States, would qualify for the income eligibility for Medicaid benefits and generic access if they lived in the United States.

AARP, Oxfam, MSF, and the generics lobby sent a letter to President Obama expressing concern about the TPP proposals on access to medicines saying it would impact production of and access to affordable medications, including for U.S. programs such as Medicare, Medicaid, the Veterans Health Administration, the TRICARE program, and the 340B Drug Pricing Program.

Internationally, public health groups also oppose the TPP proposal. Nearly 30 public health associations and health practitioners from seven countries negotiating the TPP signed a letter in the Lancet highlighting their opposition to the TPP and to the Trans-Atlantic Free Trade Agreement (TAFTA). The statement quoted, "Although USA-based industry advisors have been granted privileged access to negotiating documents, health agencies have been forced to rely on leaks for information."

The letter concludes with, "As health practitioners in seven of the involved Pacific-Rim countries, we call on our governments to publicly release the full draft TPP text, and to secure independent and comprehensive assessments of the health and human rights consequences of the proposed agreement for each nation. The assessments should evaluate the direct and indirect—and short-term and long-term—effects of the TPPA on public health policy and regulation, publicly funded health systems, the cost of medicines, and health equity; they should also be openly released to allow full public and legislative discussion before any political tradeoffs are made and the agreement is signed."