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US/Africa: Still Waffling on Generics
Africa Policy E-Journal
July 7, 2003 (030707)
US/Africa: Still Waffling on Generics
(Reposted from sources cited below)
As President Bush departs for Africa today, key questions about his
AIDS policy remain unanswered. By appointing a former drug industry
executive as his global AIDS coordinator, the president has further
reinforce doubts that he is willing to allow full use of low-cost
generic medicines needed to treat AIDS. This posting contains an
analysis of the appointment from Foreign Policy in Focus, and a
review of the latest U.S. positions on the Doha Declaration on
intellectual property rights and public health. Another posting
today focuses on the gap between promise and delivery in both U.S.
and South African government commitments of resources to address
the AIDS pandemic.
For additional documents on other issues related to President
Bush's trip to Africa, see
AIDS Appointee Shows that Business Still Rules the Roost
By Jim Lobe - July 3, 2003
Editor: John Gershman, Interhemispheric Resource Center (IRC)
Foreign Policy In Focus
The appointment of a former top executive of a major U.S.
pharmaceutical company and major Republican contributor as
President George W. Bush's global AIDS co-ordinator has stunned and
outraged AIDS experts and activists. Bush's choice of former Eli
Lilly & Co. boss Randall Tobias was announced at the White House on
July 1, just a few days before Bush's first trip as president to
Africa. The U.S. Senate must confirm the nomination.
Tobias, who retired from Lilly in 1998 and more recently has served
as vice chairman of AT&T, where he also worked before going to
Lilly in the early 1990s, is supposed to receive the rank of
ambassador and report to Secretary of State Colin Powell, a major
force behind a five-year, 15-billion-dollar anti-AIDS
initiative--called the "Emergency Program"--first proposed by Bush
last January and approved by Congress in a somewhat amended form in
Implementation of that initiative, which is targeted at 12
sub-Saharan African and two Caribbean countries, will be Tobias'
first responsibility, according to Bush. "Randy Tobias has a
mandate directly from me to get our AIDS initiative up and running
as soon as possible," he said.
Prof. Jeffrey Sachs, head of Columbia University's Earth Institute
and a special adviser to UN Secretary General Kofi Annan on the
AIDS crisis, called the appointment "surreal" and continued that
"This is an emergency that requires someone who's worked in the
field and knows it thoroughly. We don't need someone who raises all
sorts of questions about commitment and agenda."
Advocacy groups called for senators to closely scrutinize Tobias'
credentials and philosophy and determine whether, given his past
ties to the industry, he will be able to fight on behalf of the
millions of poor HIV/AIDS victims in desperate need of cheap
anti-retroviral drugs in the face of opposition from the major
western pharmaceutical companies, often referred to as Big Pharma.
"This decision is another deeply disturbing sign that the President
may not be prepared to fulfill his pledge to take emergency action
on AIDS," noted Paul Zeitz, executive director of the Global AIDS
Alliance. "It raises serious questions of conflict of interest and
the priorities of the White House."
"Both the people of Africa and the people of the United States will
lose if the president's AIDS initiative fails to use the
lowest-cost, generic medications," Zeitz said, noting that the
pharmaceutical companies have successfully pressed the Bush
administration to go back on an earlier pledge to carve out an
exception in international patent laws that would enable needy
countries to import generic anti-AIDS drugs.
Others were openly scornful about the appointment. "We know he has
little experience with AIDS, but lots as a major Republican donor,"
said Salih Booker, director of Africa Action, a Washington-based
fusion of several long-standing anti-apartheid groups. "This is
where U.S. policy on AIDS is; it's with Big Pharma."
A corporate executive throughout his career, Tobias has no
background in public health and little or no experience with
working in poor countries. In short remarks at the White House
Tuesday, he described the statistics of the AIDS toll taken in
Africa--where almost 20 million people have been killed by the
disease--as "really nearly incomprehensible."
At the same time, Tobias is known as a no-nonsense businessman who
is particularly close to the recently departed director of the
administration's Office of Management and Budget (OMB), a
bureaucracy that could play a key role in securing the money to
actually fund Bush's $15-billion program.
"This is clearly a person with tremendous stature and management
acumen," said Sandra Thurman, who served as former President
Clinton's global AIDS director and now heads the International AIDS
The key test for many activists, however, will lie in how Tobias
responds to three major questions regarding the Bush
administration's global AIDS policies, of which Emergency Program
is the central feature.
The first concern involves the availability of generic anti-AIDS
and other life-saving drugs to poor countries under the Program.
While major pharmaceutical companies have sharply cut prices on
their brand-name anti-viral medicines for AIDS victims in poor
African countries, similar generic drugs produced in India,
Thailand, and Brazil, for example, still cost significantly
less--as little as under $300 per person per year for triple
combinations of anti-retroviral drugs.
While the administration has suggested it will use generics in the
Emergency Program, it has not been made a formal decision. "Tobias
will have tough questions to answer about whether the Bush AIDS
Plan will make efficient use of funds by maximizing purchases of
affordable generic medicines," noted Eustacia Smith of Health
Global Access Project (Health GAP).
A related question is whether Tobias will push the administration
to follow through on its promise at the World Trade Organization
(WTO) ministerial meeting in Doha in November 2001 to permit poor
countries that face public-health emergencies to import generic
anti-AIDS and other life-saving drugs.
Under pressure from Big Pharma, the administration has since
reversed its position by pressing its bilateral trade partners in
Africa to sign agreements committing them to respect international
patent laws that, from a practical viewpoint, would make importing
generics much more problematic.
"It's very difficult to believe that a man coming from the U.S.
pharmaceutical industry would be willing to respond to the calls
from impoverished countries to expedite access to life-saving
mechanisms," said Zeitz. "Purchase of lowest-cost medicines,
including generics, is a must," according to Asia Russell of Health
GAP. "The pharmaceutical industry calls that piracy. Which side
will Tobias be on?"
Finally, activists are particularly worried about the fate of the
Global Fund to Fight AIDS, TB, and Malaria, a two-year-old
multilateral mechanism to expedite the funding of anti-AIDS work
around the world. Although Congress has authorized an annual
contribution of up to $1 billion for the Fund--which is already
fast running out of money--the administration has said it intends
to provide only $200 million a year.
Big Pharma has been cited as a major culprit behind the
administration's niggardliness towards the Fund because of its
support for making generic anti-AIDS drugs accessible to all needy
"Whether Tobias will push within the administration for the funding
the Global Fund really needs to even begin to catch up with the
need will be critical test of whether he's independent," said
(Jim Lobe <email@example.com> is a political analyst with Foreign
Policy in Focus (online at http://www.fpif.org). He also writes
regularly for Inter Press Service.)
WTO and Generic Medicines
Distributed on Healthgap listserv on July 3, 2003
From: Brook Baker <B.Baker@NEU.EDU>
This analysis of the recently announced "concession" by the U.S. to
drop its Doha demand on scope of diseases is timely given Bush's
pending trip to Africa on July 7. It also demystifies the U.S.
strategic retreat and analyzes the U.S.'s upcoming plans to
continue seeking disease restrictions, country restrictions, and
heightened diversion safeguards. - Brook Baker
For more information: http://www.healthgap.org
HEALTH GAP on WTO medicines negotiations:
Doha Redux - U.S. Enters New Phase of Bad Faith Bargaining
Brook K. Baker, Health GAP
July 2, 2003
The U.S. Trade Representative and its handlers in the White House
and in PhRMA are struggling to coordinate their ongoing campaign to
limit the impact of the historic Doha Declaration on the TRIPS
Agreement and Public Health. On June 22, 2003, the USTR made a
"crucial," but ultimately misleading "concession" in World Trade
Organization talks over the controversy about allowing developing
nations to import generic drugs to address public health needs,
saying that it would back off of its unilateral insistence on
limiting the Agreement to a specified list of infectious diseases,
primarily AIDS, TB, and malaria.
Instead of insisting on this unwinnable disease limitation, the
U.S. and PhRMA are returning to the drawing board to accomplish
three interlocking goals: (1) to come up with a new disease
restriction that is not as perverse as addressing pandemic
infections only, (2) to limit the countries that would be eligible
to import generic medicines produced abroad to least developed
countries and a few lower income developing countries only, and (3)
to erect even higher anti-diversion standards that will complicate
both generic production and importation.
In announcing that it was retreating temporarily from its
insistence on covering AIDS, TB, and malaria only, the U.S. is
trying to recover political ground lost at the WTO via its renegade
rejection of an imperfect compromise reached by the other 143 WTO
members at December. That compromise, reflected in Chairman Motta's
text, would have allowed generic manufacturers to produce and
export medicines that addressed any and all public health needs and
would have permitted such export to a broad spectrum of developing
countries that unilaterally determined that they lacked meaningful
and efficient manufacturing capacity in the pharmaceutical sector.
Unnamed U.S. officials have stated that the U.S. has given up on
insisting on a specific list of diseases, but U.S. Trade
Representative Robert Zoellick in a press conference at the
mini-ministerial held in Sharm El Sheik, Egypt, refused to confirm
that the U.S. government was dropping this demand. Instead,
Zoellick paradoxically insisted that the U.S. had never supported
the idea that agreement could only apply to a "closed list" of
diseases, referring presumably to the highly stringent language
that the agreement could eventually cover other infectious diseases
of similar gravity and scope.
Zoellick's double-speak on U.S. obstructionism is matched, or even
exceeded, by Harvey Bale, president of the International Federal of
Pharmaceutical Manufacturers Associations who said "We feel we are
wrongfully being blamed for holding up progress in certain parts of
the (Doha) negotiation." Apparently, it doesn't matter to Mr. Bale
that all investigators agree that industry intervention at the
White House in November and December of 2002 prompted a hardening
of the U.S. position on disease coverage and ultimately that the
industry sponsored the impasse of December 20.
In addition to revising history, the U.S. and its PhRMA
co-conspirators are hard at work trying to further limit the Doha
Declaration without re-opening the Motta text. Although the clues
to their new strategy are imprecise, they suggest that the U.S.
intends to rephrase the scope of covered diseases, presumably
returning to the earlier U.S. position emphasizing "grave" public
health crises, such as AIDS, TB, and malaria. This phrasing would,
of course, ignore the clear language of paragraph 4 of the Doha
Declaration that addresses all public health concerns without
restriction: "We agree that the TRIPS Agreement does not and should
not prevent Members from taking measures to protect public health.
Accordingly, we affirm that the Agreement can and should be
interpreted and implemented in a manner supportive of WTO Members'
right to protect public health and, in particular, to promote
access to medicines for all."
Even more significantly, the U.S. will attempt to further restrict
the number of countries that can access generic export from
producer countries. A letter from 22 U.S. and European
pharmaceutical companies and three trade associations clarified the
industry's position that any agreement should apply only to the
world's poorest countries that truly lack pharmaceutical capacity.
Zoellick referenced this letter in his Egyptian press conference
and had earlier told the trade minister of the Philippines that, in
the U.S. view, the Philippines (and presumably Malaysia) would not
be eligible to import generic medicines from abroad because it had
sufficient manufacturing capacity. Harvey Bale addressed the
country-eligibility issue even more directly: "Our focus is on
helping the countries that the founding fathers of the Doha Agenda
had in mind." According to Bale, it would be a "gross exaggeration
and a gross distortion" to give more industrially advanced
developing countries, such as India and China, the same rights as
"poor states like Haiti, Namibia or Bangeladesh."
The irony of Bale's formulation is that the Doha Declaration will
require producer countries like India and China to manufacture and
export life-saving generic drugs to a broad range of countries with
insufficient or inefficient pharmaceutical capacity. India and
China aren't countries that will "take advantage of Doha" to access
cheaper medicines for themselves, though, of course, it is
perfectly legal for them to issue compulsory licenses on any
grounds whatsoever under the flexibilities of the TRIPS Agreement.
Instead, lowest cost, standard quality generics will ultimately be
produced in large measure by efficient producers in India and China
that reach meaningful economies of scale for a broad range of
public health medicines. To induce generic entry into low-income
countries, it will be necessary to aggregate markets, including
markets with large populations and meaningful purchasing power ?
namely, those of middle-income countries.
But, PhRMA is so intent on making high profits on sales to income
elites in middle-income countries that it is willing to sacrifice
the lives of millions of poor people to secure its market hegemony.
Since U.S. pharmaceutical giants have never seen a penny of
potential profit that they would willingly abdicate to a generic
producer, they have chosen to slander the intentions of India,
China, and Brazil, solely because generic manufacturers in those
countries are poised to supply standard quality medicines at a
substantial discount over PhRMA prices. Accordingly, the U.S. and
PhRMA are scheming on how to coerce countries to voluntarily opt
out of the system and on defining gross-national-product and
disease-burden tests to greatly limit country eligibility.
With respect to their product diversion agenda, PhRMA and the USTR
are allegedly pushing for mandatory special packaging requirements
and internal policing mechanisms. This mandatory system is more
stringent than that in the Motta text which merely recommends that
special labeling and marking be used, but only when such product
distinction is feasible and does not significantly impact price.
Developing countries can expect no quarter from the U.S. which has
a long history of bad-faith dealing in Doha negotiations. It will
keep on pushing PhRMA's agenda while it mouths platitudes about its
intention to find a workable solution. Despite developing
countries' reluctant accommodation to the Motta text, they should
not expect that the U.S. really intends to reach a "compromise."
For the U.S., others compromise - the U.S. wins.
As Doctors Without Borders and many others have argued, developing
countries should dump that Motta text and act in good faith on the
Doha Declaration itself. That Declaration opens the door not only
for production for export via compulsory licenses but also
production for export via limited exceptions under Article 30. This
is the easy, expeditious solution recommended by the World Health
Organization, the European Communities, multiple NGOs, and many
developing countries themselves.
While the U.S. and PhRMA dither and dally, while they obscure and
deceive, millions of lives have been lost. Facing this stark
reality, the Doha Declaration expressed a degree of urgency,
especially since limitations on producing newer generic medicines
for export will arrive with full global force in 2005 (except for
least developed countries). Global trade rules concerning
exceptions to patent rights have to be clarified so that developing
countries can amend their national legislation to make maximum use
of Doha flexibilities and so that generic manufacturers can reduce
the legal risk of their still risky economic investments. That
clarification was supposed to have happened by the end of 2002, but
now, a full six months later, the U.S. still blocks a global
As the President of the U.S. is poised for a trip to Africa - a
continent decimated by the AIDS pandemic - is it too much to ask
that he restrain his PhRMA donors and that he chastise his USTR
bully-boys? Could the U.S. cease and desist from blocking a Doha
accord and from seeking TRIPS-plus intellectual property
protections in its trade negotiations with Africa, such as that
with the South African Customs Union? Could the U.S. actually
concede that low-cost, standard quality generic medicines are a
critical component of a global response to the global AIDS pandemic
whether those generics are purchased under the U.S. bilateral
program or the Global Fund to Fight AIDS, TB, and Malaria? Do
African lives really matter, except at press conferences?
Date distributed (ymd): 030707
Issue Areas: +health+ +US policy focus+
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