Behind the increasingly hardline stances of the industrial countries in the paragraph 6 discussions lies the pernicious influence of Big Pharma.
by James Love
GENEVA: 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 paragraph 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. 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 patent rights).
DG-Trade also made an early decision to exclude OECD countries from the solution, both as importers and as exporters, believing that the EC would eventually adopt a community patent allowing the EU members to 'solve' the Article 31(f) problem within Europe itself. 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" DG-Trade was pushing, and mostly wanted to limit the 'solution' to as few countries and as few diseases as possible. But on the issue of 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.
Hardening positions
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 licences 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, 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 policymaking 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 elections, Big Pharma had poured in millions, and was decisive in holding the House and shifting the Senate to the Republicans.
Right before the elections, 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 the Pharmaceutical Research and Manufacturers of America (PhRMA) demanded the USTR deliver on the issue of scope of diseases.
At a November meeting in Sydney of ministers from 25 WTO member countries, Zoellick told the Africa group that the US opposed allowing asthma, cancer and other diseases in the 'solution' and the USTR told the US media that it did not want X-ray machines included. Rosa Whitaker (Assistant USTR to Africa) sent her famous "three diseases" letter to African governments; and 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 in the week of 25 November, there was a big pharma meeting in the White House on 25 November, 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 that 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 did not 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.
During the week of the TRIPS Council meeting, US missions in African, Asian and Latin American capitals stepped up their pressure to close the deal, one African delegate reportedly having had a 30-minute call on 28 November from his trade minister demanding his Geneva negotiator just give the Americans what they wanted.
But Pharma overplayed its hand. If there was a defining 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 near 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, 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.
The USTR was 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 29 November at 2 pm, when the TRIPS Council had a special unscheduled meeting for one more attempt to end the negotiation. p
James Love is the Director of the Consumer Project on Technology, a US-based international NGO which has been closely monitoring the TRIPS and public health issues and talks at the WTO.
Source: Third World Network - TWN
