By Kevin E. Noonan --
Four Congressman recently stepped into the crisis in world drug pricing, sending a letter
to U.S. Trade Representative Susan Schwab last Thursday. The letter, signed by Congressman Charles Rangel (NY-15th Dist.), Congressman Rahm Emanuel (IL-5th Dist.), Congressman Sander Levin (MI-12th Dist.), and Congressman Chris Van Hollen (MD-8th Dist.), criticizes Ms. Schwab for a statement in the 2008 Special 301 Report regarding Thailand's granting of compulsory licenses for patented drugs (see "U.S. Continues Efforts to Protect Patent Rights Abroad").
The criticism seems to be based on the Congressmen's concern over unequal distribution of drugs globally, and asserts that the capacity of government to grant compulsory licenses is a "right" under the TRIPS agreement. The Congressmen cite statistics, such as "15 percent of the world's population consumes 90 percent of the world's medicines" to illustrate what's wrong with the Trade Representative's position. They also make some strange predictions, such as "[i]mproving access to medicines in developing countries . . . has the potential to expand opportunities for innovative U.S. pharmaceutical companies" without any rational explanation for their statement. The letter evinces understanding about how facially neutral policies of governments overseas -- such as price controls, reference pricing, and certain reimbursement policies -- can be applied in a discriminatory manner, and the Congressmen assert that they have "long advocated a proactive approach to address discriminatory measures" (without detailing what this "proactive approach" has or would entail). The Congressmen believe that U.S. trade policy has been hurt -- an "existing imbalance" -- by limitations in the participation of public health experts in trade negotiations, and urge that the Trade Representative "take steps," including the creation of a trade advisory committee system comprising public health representative, to remedy this deficiency.
The letter, to be kind, is naïve with regard to the state of intellectual property protection remaining in the TRIPS agreement after the Doha declaration. The problem is not a misguided policy by the U.S. Trade Representative; it is the inability of governments throughout the world to work out a drug pricing regime that adequately balances the needs of innovator pharmaceutical companies for sufficient return on investment to obtain the capital needed to develop new drugs, and the humanitarian need to provide drugs for the world's poor who cannot afford them. Instead, TRIPS, as modified by the Doha Declaration, has degenerated into another East-West, First World-Third World contest, and an accurate assessment of the contest is that the innovator pharmaceutical companies are not "winning."
The letter urges a "new course" in trade negotiations that will "promote both pharmaceutical innovation and the health of patients in developing countries." While these are noble sentiments, it may be that the two goals are not completely compatible. The question then arises whether their constituents would be happy to know that, if the two options are not compatible, these Congressmen seem to believe the interests of patients in developing countries are at least as important as the pharmaceutical innovation that improves the lives of their constituents. In fact, the type of compulsory license granted by Thailand is a misuse of the TRIPS provisions (more accurately, the provisions of the Doha declaration that fundamentally changed the TRIPS agreement). Doha at best was intended to permit governments to avoid high drug prices that would otherwise prevent their citizens from having access to life-saving drugs during a medical crisis, such as the AIDS pandemic. Thailand has granted compulsory licenses for such drugs, but is has also granted a compulsory license for Plavix®, a drug that benefits Thailand's wealthy elite. The Congressmen appear to be ignorant of these facts, and as a consequence have chosen a particularly inapt "victim" of U.S. trade policies as their poster child for advocating a "new course." And they do so to the detriment of any discussion of what is really needed, a truly new course that will address the world drug pricing crisis.
For additional information regarding this and other related topics, please see:
• "U.S. Continues Efforts to Protect Patent Rights Abroad," April 29, 2008
• "Thailand Continues Its Compulsory Licensing Practices," March 11, 2008
• "More on the Global Drug Patenting Crisis," August 14, 2007
• "EU Trade Commissioner Sends Warning Letter to Thailand," August 13, 2007
• "Trying to Find a Solution to the Global Drug Pricing Crisis," July 16, 2007
• "Worldwide Drug Pricing Regime in Chaos," May 9, 2007
• "A Modest Proposal Regarding Drug Pricing in Developing Countries," May 2, 2007
• "The Law of Unintended Consequences Arises in Applying TRIPS to Patented Drug Protection in Developing Countries," May 1, 2007
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