Why the TRIPS and Public Health talks at WTO broke down

Geneva, 29 Nov (James Love*) - There was a period after Doha, when the United States Trade Representative (USTR) and the European Commission’s Directorate-General of Trade (DG-Trade) appeared to be genuinely making an effort to control their own export industries, and reach a feasible compromise on implementing para 6 of the Doha Declaration on TRIPS and Public Health.

There were significant differences between positions advocated by the USTR, DG-Trade and developing countries, and public health groups were quite critical of many of the early proposals, but a deal seemed to be possible.

DG-Trade seemed intent on limiting the “solution” to cases where its various tiered pricing systems (DG-Trade regulating prices in various developing country markets) broke down. The DG-Trade always wanted a set of special controls (safeguards) on developing countries (things they asked for but did not get in the dispute against Canada over the Article 30 ‘bolar case’ exception to the patent rights.

The DG-Trade also made an early decision to exclude OECD countries from the solution, both as importers and exporters, believing that the EC would eventually adopt a community patent, allowing the EU members to “solve” the 31.f problem within Europe itself. The DG-Trade refused to engage its own consumer interests in the negotiations, framing everything as a development issue, but it was mostly protecting what it perceived as the core protectionist interest of its export pharma industry, while moving ahead on paragraph 6.

The USTR was less interested in the various TRIPS plus “safeguards” the DG-Trade was pushing, and mostly wanted to limit the “solution” to as few a countries and as few diseases as possible, but on the issue of the diseases, the US seemed to have some flexibility, having a very difficult time explaining to anyone why cancer, asthma and some devices would be excluded.

The US also showed some early flexibility on reframing the issue in terms of economies of scale, something that the EC’s DG-Trade refused to do. The US strategy in negotiations early on was to split the Africa group from the Latin and Asian delegates, and to focus on the capitals, where trade ministers were less informed and easier to pressure, and where the US could link a narrow paragraph 6 solution to textiles, agriculture and other issues.

Right after Doha, the US government created an interagency task force to deal with paragraph 6, with DHHS, State, Department of Commerce, USPTO, USTR and others. The State Department sent a major cable out to African embassies in March (we believe). The US government negotiators and pharma held regular meetings.

By the summer, big pharma began to exercise far more power in the US and EC decision making, and DG-Trade and USTR positions began to harden on a number of issues.

DG-Trade began to push for a role for the WTO in supervising individual licenses that was quite extraordinary, and they decided they would try to block an Article 30 approach, in favour of mechanisms that were as complicated and burdensome as possible, giving the industry a set of inventory and marketing surveillance tools that it would use to undermine the generic industry. DG-Trade was also maddeningly legalistic on a number of stupid issues, such as the need to limit the solution to only the precise issues raised in the decidedly poorly written Paragraph 6 of the Doha Declaration, for example focussing endlessly on the issue of how to measure manufacturing capacity, as if this was the main public health problem presented by 31.f, and as if DG-Trade never read the Canadian/EC bolar dispute where economies of scale and exports were a major issue (and DG-Trade lost) . The DG-Trade position was complicated by significant dissent (pro-public health positions) in several European countries (Netherlands, Belgium, France) and the European Parliament (Amendment 196).

The USTR by the summer had lost control over policy making to the White House, and Zoellick pushed the USTR to harder and harder lines on a variety of issues, but particularly on the scope of diseases. In the US election, big pharma had poured in millions, and was decisive in holding the House and shifting the Senate to the republicans.

Right before the election, President Bush was forced to hurt big pharma on US Hatch/Waxman issues to get votes. After the election, big pharma demanded ever greater control over the paragraph 6 negotiations. CEOs of companies were making regular calls, and PhRMA demanded the USTR deliver on the scope of diseases issues.

In Sydney, Zoellick told the Africa group that the USA opposed allowing asthma, cancer and other diseases in the “solution” and the USTR told the US media that it didn’t want X-Ray machines included. Rosa Whitaker sent her famous “three diseases” letter to African governments; PhRMA circulated a “three disease” letter in the US Congress and planted a long editorial in the Wall Street Journal on the “three disease” theory of what the Doha Declaration was about.

As the TRIPS Council meeting began this week, there was a big pharma meeting in the White House on Monday, and PhRMA’s Shanon Herzfeld was checked into the Hotel President Wilson (in Geneva) with the US delegates to crack the whip.

Japan kicked off the disease debate by insisting the vaccines be removed from the solution, on the grounds that vaccines were technically not pharmaceuticals, another legalistic reading of paragraph 6 that was completely at odds with everything public health workers would recommend, and presenting the African group with a “solution” that didn’t even include the technologies that might make anti-retrovirals (ARVs) unnecessary.

Meanwhile the US media was hailing vaccines that appeared to be promising for breast, cervical and other cancers, which were clearly excluded on two grounds - that they are for cancer, and are vaccines. Then the US proposed its famous travelling disease criteria, to limit the solution to only infectious epidemics, as if the US would only tolerate public health measures that might have a consequence on the US.

This week US missions in Africa, Asian and Latin American capitals stepped up their pressure to close the deal, one African delegate reporting having had a 30 minute call yesterday from his Trade Minister, demanding his Geneva negotiator to just give the Americans what they wanted.

But Pharma over-played its hand. If there was a moment, it was when it was reported that Japan wanted vaccines out. After that, there was a sense that things were completely out of hand, and the US, DG-Trade, Canada, and Switzerland appeared to be getting nowhere to closing out the deal.

There was open criticism of the way that Eduardo Perez Motta from Mexico was managing the negotiations, including language in drafts of text that were in some cases taken verbatim from the PhRMA/Congress letter, and were highly responsive to US/Japan suggestions on scope of diseases, and often not responsive to delegations that were asking for more attention to Article 30 style approaches in terms of legal mechanisms.

Now the USTR is stuck spending Thanksgiving explaining to Shanon Herzfeld of PhRMA how threats of nuclear attacks may be necessary to move the Africa group to cut a deal by Friday at 2 pm, when the TRIPS council has a special unscheduled meeting for one more attempt to end this negotiation.

(*James Love is the Director of the Consumer Project on Technology, a US based international NGO closely monitoring the TRIPS and Public Health issues and talks at the WTO.) – SUNS5246

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