CPTech Letter to USTR Portman Regarding US Position on WTO Opt-Out of Compulsory Licensing Mechanism

Original page: http://www.cptech.org/ip/birdflu/ustr-birdflu.html

14 October 2005

Honorable Rob Portman
United States Trade Representative
600 17th Street, N.W.
Washington, DC 20508

Dear Ambassador Portman:
We are writing to ask that the United States government address a mistake in trade policy that puts US citizens at risk in the event of an outbreak of bird flu, as well as other serious public health problems.

On August 30, 2003, the World Trade Organization (WTO) adopted a limited waiver of a provision of the TRIPS Agreement on intellectual property rights, in order to permit the manufacture of a medicine under a compulsory license for export to another country. This decision was a belated “solution” to a problem in the TRIPS Agreement that had been identified at the WTO ministerial agreement at Doha, Qatar, in paragraph 6 of the November 2001 Doha Declaration on TRIPS and Public Health.

The Doha Declaration on TRIPS and Public Health called for WTO members to implement patent and other intellectual property laws in a manner that promotes access to medicine for all. It also asked the WTO TRIPS Council to find a way for countries that lacked generic manufacturing capacity to find suppliers in order to import medicines. Virtually all consumer, public health and development groups working this issue recommended a fairly simple and elegant mechanism based upon Article 30 of the TRIPS agreement, an approach considered first by the Canadian government in 1999, and endorsed by the European Parliament on October 23, 2002, when it adapted Amendment 196 to the European Medicines Directive. This amendment provided that regardless of the patent status of a medicine.

Manufacturing shall be allowed if the medicinal product is intended for export to a third country that has issued a compulsory licence for that product, or where a patent is not in force and if there is a request to that effect of the competent public health authorities of that third country.

Rather than permit this simple mechanism to be accepted, Pascal Lamy, then EU Commissioner for DG-Trade, and key US policy makers, including Karl Rove, who closely followed this issue from the White House, and former US Trade Representative Robert Zoellick, sought a far more complex and problematic solution to the problem, which was designed to limit the use of compulsory licenses as much as possible. The final result of this negotiation was the 30 August 2003 decision by the WTO to create a temporary waiver of the TRIPS limitations on exports of medicines produced under a compulsory license. This temporary waiver is supposed to be converted into a permanent amendment to the TRIPS agreement — a topic that will be discussed during the December WTO ministerial in Hong Kong.

As you know, the 30 August 2003 decision is quite complex and controversial, particularly on the grounds that invites bureaucratic delays, increases uncertainly, imposes costly obligations in importing countries, and undermines economic incentives for generic entry. However there is one feature of the 30 August 2003 decision that is completely indefensible, as is now evidenced by the current public health crisis involving the possible outbreak of a pandemic of bird flu.

The US and the EU insisted that the 30 August 2003 decision permit countries to notify the WTO they would not use the decision as importing countries, and DG-Trade and USTR subsequently pressured 23 high-income countries to make such a declaration, including Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom and United States of America.

At the time the US and the DG-Trade were harshly criticized both for the protectionists nature of this provision (rich countries could export to poor countries, but poor countries could not export to rich countries), and also because this would leave high income countries vulnerable in cases where they would need medicines, including but not limited to cases of a public health emergency.

Today we are reading headlines about a possible public health crisis involving an outbreak of bird flu. In 2001, just four years ago, we were reading headlines about a possible bio-terrorism attack involving anthrax. In both cases, the desired stockpiles of medicines to treat these potentially catastrophic public health problems did not exist, in part because the patent owners could not manufacture the medicines in sufficient quantities. In 2001, then DHHS Secretary Tommy Thompson decided to gamble, and did not override the Bayer patents on ciprofloxacin in order to buy medicines from generic suppliers. As a consequence, the US waited about 2 years to create the stockpiles of medicine that health experts had recommended. Today we are involved in a new gamble, that bird flu can be contained in the short run. Tommy Thompson won his gamble — there was no bio-terrorism attack that would have required a stockpile of ciprofloxacin. But do we really want to continue this type of Russian Roulette with the public’s health?

The 30 August 2003 WTO decision is directly relevant to this debate. Today the New York Times is reporting that CIPLA can manufacture generic copies of oseltamivir, which is marketed as Tamiflu by Roche. If India determines that this product is subject to patents, the likely mechanism to export the medicine will be the 30 August 2003 WTO decision. But just two years after the Anthrax scare, the United States has inexplicitly elected to not be eligible as an importing country.

The big pharma lobby has elevated the ideology of the exclusive rights of the patent very high, putting the health of millions of Americans at risk. This is a mistake, and should be corrected.

As you are aware, the WTO rules and US law for compulsory licensing of patents require that patent owners receive remuneration. Therefore, in the event that a compulsory license is issued for the purchase of generic copies of oseltamivir, the patent owners will receive money, regardless of who actually manufactures and supplies the medicine.

USTR should notify the WTO that it now considers itself eligible to import generic medicines under the 30 August 2003 WTO decision. This is important regardless of the outcome of the present dispute. As the 2001 Anthrax crisis, the New Orleans Katrina disaster, and the current concerns over bird flu illustrate, the future can be highly uncertain and present enormous risks to the American public. US Trade policy should be mindful of the need to protect the American Public, in the event of such contingencies.

The United States might also consider an expanded dialogue on the issue of remuneration to patent owners when compulsory licenses are needed to protect the public in the event of similar public health emergencies. There is no need to be constantly surprised and unprepared when such emergencies present themselves.

We would like to arrange a meeting with you and your staff and consumer and public health groups that share our concerns.

Thank your for your consideration of this request.

James Love
Consumer Project on Technology
1621 Connecticut Avenue, Suite 500
Washington, DC 20009
1.202.332.2670 * james.love@cptech.org