PHA-Exchange> WTO and the US Trade Representative

[Aviva]

From: "Firoze Manji" <firoze at fahamu.org>
EQUINET-Newsletter at equinetafrica.org

LIFE AND DEATH AT THE WTO
Sanjay Basu
If you cross paths with Robert Zoellick's mother over the next few  
weeks, please remind her that applications to George Washington  
University's School of Public Health are due soon. Her son needs to  
hurry up and submit his paperwork. Mrs. Zoellick might be surprised at  
the suggestion that her son Robert, US Trade Representative, should go  
back to school. She might tell you that her dear Robbie already  
graduated magna cum laude from Harvard's Law School and received an MPP  
from the Kennedy School of Government. Mrs. Zoellick might say that her  
son's overqualified for his job. The only problem is that Robert  
Zoellick has been making a lot of decisions about public health lately  
- and in that realm, he is terribly uninformed.

Take, for instance, his actions last month at the WTO council. Trade  
representatives from the other 143 member countries of the WTO decided  
that the poorest of nations - those without any pharmaceutical  
manufacturing facilities - should be able to import cheap generic  
drugs, since they can't pay for the more expensive patented versions.  
But Mr. Zoellick became the only minister at the WTO to refuse to agree  
to the measure.

This isn't the first time that's happened. Back in December, Mr.  
Zoellick did the same thing just before Christmas. The issue was how to  
implement the WTO's "Doha Declaration" on public health, which the WTO  
(with Mr. Zoellick's vote) passed in November 2001. That agreement  
declared that the patent rights of drug companies should be secondary  
to public health concerns to "promote access to medicines for all." In  
the agreement, the WTO promised to determine how countries without  
manufacturing facilities were going to import generic drugs.

But Mr. Zoellick decided that he would "reinterpret" the Doha  
Declaration. He claimed that the Declaration was not really about  
promoting "access to medicines for all" (in spite of the wording in the  
Declaration itself) but it was really only intended to cover a short  
list of diseases. He came to the table with a list of 15 diseases he  
thought were suitable. The only problem was that major killers like  
cervical cancer and pneumonia were not included. Mr. Zoellick said  
those diseases not on the list were "lifestyle" disorders. So the three  
million kids who will die from pneumonia in Africa this year better  
whip themselves back into shape and learn to change their ways. Some of  
the other trade ministers thought this was a bit perverse, and refused  
to agree to that deal.

February was supposed to be a finalization of the delayed negotiation  
process, but Mr. Zoellick came to the table with a new set of rules,  
once again using his "alternative" theories of public health practice.  
This time, medicine access would not be restricted to just a short list  
of diseases, but countries would also be restricted to importing  
generics only after a "national emergency." So health ministers in  
Burkina Faso, which is currently in the beginning stages of a major  
meningitis epidemic, should sit tight and wait for a couple hundred  
thousand people to die - then they can begin the legislative process to  
get medicines. Other rules proposed by Mr. Zoellick would be  
extraordinarily cumbersome. Under the system proposed, if Pakistan  
wanted to get cheaper drugs from an Indian generic manufacturer, the  
Indian government would have to pass legislation for Pakistani  
citizens. How politically pragmatic!

No one mentions, of course, that the very measures Mr. Zoellick is  
pushing on the poorest of countries are far more stringent than those  
followed by the United States. Remember the anthrax scare? After only  
four deaths, Congress was threatening to import generics immediately if  
Bayer Corporation didn't produce its anti-anthrax drug quickly enough.  
But other countries, of course, aren't allowed to do the same when they  
have real public health crises.

I pity Mr. Zoellick's public relations officer, who will no doubt be  
working long hours to generate an entirely new system of logic  
justifying the nature of these deals. But, of course, there's plenty of  
support for Mr. Zoellick and his worker bees at the Washington trade  
office. It comes from the pharmaceutical industry, as was made explicit  
at the WTO council. Instead of negotiating with each other, the trade  
ministers declared they would just circumvent the whole process and  
start negotiating directly with Pfizer. Companies like Pfizer don't  
want a break in their global monopoly on prices. But if the most  
profitable industry in the world can't handle the fact that poor  
countries represent a tiny percentage of their pharmaceutical market,  
then our trade ministers need to be able to stand up to them and defend  
the Doha Declaration.

The industry, and the USTR, claims that generics would undermine their  
capacity to pay for research and development - that is, the research  
and development that American taxpayers actually foot most of the bill  
for. The industry doesn't bother to release it's own tax information,  
however, which reveals that Merck this year used 13% of its profits on  
marketing and only 5% on R&D, Pfizer spent 35% on marketing and only  
15% on R&D, and the industry overall spent 27% on marketing and 11% on  
R&D according the Securities and Exchange Commission. That's not  
accounting for the fact that 52% of new drugs on the market aren't even  
the result of R&D, but are "me too" drugs that are simple  
reformulations of old products slapped with new stickers.

The industry still claims that generics will undermine its business,  
even as it continues to be ranked by Fortune Magazine as the world's  
most profitable industry for 11 years in a row (having profits as a  
percentage of revenue nearly three times the rest of the Fortune 500  
industry). When confronted with the fact that Africa comprises only  
1.3% of the industry's revenues (making its loss equivalent to "about  
three days fluctuation in exchange rates," according to an industry  
analyst quoted in The Washington Post), the industry claims that  
generic drugs will get diverted to the North to undermine its key  
markets, and cites GlaxoSmithKline's recent loss of AIDS drugs sent to  
Africa as a case in point. But a look at the GSK case shows that Glaxo  
failed to even track the shipments and only discovered after a year  
that its packages to Africa had been shipped improperly, allowing them  
to be smuggled to Europe. Tracking mechanisms, however, seem to be no  
trouble for neighbourhood flower shops. Indian generic manufacturers,  
meanwhile, have shipped medicines for over two decades without a single  
case of "diversion".

It's time for Mr. Zoellick to learn what it means when 24,000 people  
die a day from treatable diseases; otherwise, he should take a fraction  
of the $20 million in campaign contributions pharmaceutical companies  
donated last year and use it for his tuition at the School of Public  
Health.