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US EASES DRUG-PATENT RULES

Wall Street Journal (12.23.02)::Michael M. Phillips

The Bush administration scrambled to undo the public relations damage caused
when it blocked an international agreement to allow developing countries
easier access to generic versions of prescription drugs to combat AIDS,
malaria, cholera and other infectious diseases. Just hours after World Trade
Organization talks in Geneva broke down late Friday, US Trade Representative
Robert Zoellick announced that the United States would temporarily allow
nations to override American drug company patents and export inexpensive,
generic versions of brand-name pharmaceuticals to help African and other
very poor nations.

US trade officials had been working on the backup plan during the last week
of negotiations, as it became apparent that Washington might soon find
itself in the position of being the sole obstacle to an agreement seen by
many as a humanitarian imperative.

WTO members agreed in November 2001 that poor countries should, under
international rules, be able to produce their own generics to deal with
public health emergencies, without permission from the companies that hold
the patents. Many poor nations, however, argued they did not have the
industrial capacity to produce quality drugs, and asked that they be allowed
to import generics. WTO members pledged to resolve that issue by the end of
this year.

The talks collapsed, however, over the issue of which diseases would be
eligible for patent exemptions. Major developing nations, such as Brazil and
India, said drugs for a vast array of diseases, including cancer, heart
disease and asthma, should be covered by the exemptions. The United States,
pressed by the pharmaceutical industry, wanted to limit the list to
infectious diseases such as AIDS and tuberculosis.

Pharmaceutical companies warned that broader exemptions would cut profits to
such a degree that they would reduce their research into new drugs.

The US plan - essentially a unilateral implementation of the American
negotiating position - will be in place until an agreement is reached, said
Zoellick. WTO members agreed to reconvene next year and try to reach a deal
by Feb. 11.