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Note: This document is from the archive of the Africa Policy E-Journal, published by the Africa Policy Information Center (APIC) from 1995 to 2001 and by Africa Action from 2001 to 2003. APIC was merged into Africa Action in 2001. Please note that many outdated links in this archived document may not work.

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

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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 May.

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.

Surreal Appointment

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 Trust.

Three Questions

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 countries.

"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 Booker.

(Jim Lobe <> is a political analyst with Foreign Policy in Focus (online at 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:

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 accord.

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?

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Date distributed (ymd): 030707
Region: Continent-Wide
Issue Areas: +health+ +US policy focus+

The Africa Action E-Journal is a free information service provided by Africa Action, including both original commentary and reposted documents. Africa Action provides this information and analysis in order to promote U.S. and international policies toward Africa that advance economic, political and social justice and the full spectrum of human rights.

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