Showing posts with label KEI. Show all posts
Showing posts with label KEI. Show all posts

Tuesday, May 6, 2008

Anti-IP Movement Dealt Devasting Blow at WHO; Yet Touts 'Progress Made' in Effort at Positive 'Spin' Control


[READERS WILL NOTICE HOW THE TONE OF INTERNAL COMMUNICATIONS BETWEEN THE MEMBERS/ REPRESENTATIVES OF KNOWLEDGE ECOLOGY INTERNATIONAL (KEI), AN ANTI-INTELLECTUAL PROPERTY NON-GOVERNMENTAL ORGANIZATION, ABOUT THE RESULTS OF RECENT MEETINGS CONVENED AT THE WORLD HEALTH ORGANIZATION BY THE INTERGOVERNMENTAL WORKING GROUP ON INTELLECTUAL PROPERTY AND HEALTH, CHANGED FROM ‘NEGATIVE’ TO ‘POSITIVE’, SUCH THAT, THE LATER PUBLICIZED ARTICLES RELEASED THROUGH INTELLECTUAL PROPERTY WATCH, GRADUALLY CREATE A ‘POSITIVE SPIN’.]


The following exchange was reflected on the listserv of ip-health@lists.essential.org .


[FRANCISCO ROSSI SETS FORTH TO HIS COLLEAGUES THAT THE WHO IGWG MEETING WAS AN UTTER FAILURE B/C THEY COULD NOT, AT SUCH MEETING, SECURE COMMITTMENTS ON ANTI-PATENT INITIATIVES. YET, HE TRIED TO PLACE A 'POSITIVE SPIN' ON THE OUTCOME...]


On Mon, 2008-05-05 at 15:07 +0000, Francisco Rossi wrote:


[Picked text/plain from multipart/alternative]


From: Francisco Rossi
To: ip-health
Subject: RE: [Ip-health] FT: WHO fails to strike drug deal
Date: Mon, 5 May 2008 15:07:38 +0000


Dear All:


I just want to introduce some reflexions on IGWG outcomes, because I believe there are some elements to take into account. Despite I could have reasons to be especially disapointed, from a personnal perspective, I think we need to be more objective and balanced. Certainly any assessment of IGWG outcomes is related on expectations.


If we expected a radical re-formulation of IP worldwide, IGWG was a major failure. If our expectations were oriented to introduce alternative incentive models instead of prevelent ones, meeting was a failure.


In the other hand, if we read the meeting as an step on a process to put developing countries points of view in the table. IGWG was a major sucess. If we read the meeting as a strong movement on the WHO secretariat to take very seriously IP issues, meeting was a major success.


I was commenting with some friends that in the past we were working very reactive against TRIPS, and then against FTAs and Trips plus measures. Reactive and in a defensive Perspective. Now, despite the UN lenguage in most of the agreements and consensus, there is a open door for the negotiation on Innovation, IP and Public health.


Certainly developed countries and interested industries were there to obstacle any movement. And they worked pretty well. By from my personal point of view they lost a lot. And I would like to highlight the developing world countries leadership on that.


Just to re-open this discussion.


Best to all


Francisco Rossi

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[IN COMFORTING, FRANCISCO ROSSI, JAMIE LOVE OF KEI POINTS OUT THE 'POSITIVES'...]


From: James Love
Reply-To: james.love@keionline.org
To: Francisco Rossi
Cc: ip-health
Organization: http://www.keionline.org
Date: Mon, 05 May 2008 16:56:02 -0400

This is a response to the comment by Francisco Rossi.


The IGWG negotiations involve a wide range of topics, and people will see useful text in several areas, although also important areas where there is no progress yet, as reflected in the 18 paragraphs still with brackets. There is also relatively weak language in some parts.


In terms of new incentives, good language on incentives has in fact moved ahead. For example:

-----------
5.3(a) explore and, where appropriate, promote a range of incentive schemes for research and development including addressing, where appropriate, the de-linkage of the costs of research and development and the price of health products, for example, through the award of prizes,
with the object of addressing diseases which disappropriately affect developing countries (consensus)


---------


It was difficult to get 5.3(a). But there is now very good language, on what we consider a key issue.


7.1, while not as strong as the language in the deleted 7.3, is also useful.


". . .examine current financing and coordination of research and development, as well as proposals for new and innovative sources of financing to stimulate R&D related to Type II and Type III diseases and the specific R&D needs of developing countries in relationship to Type I
diseases."


In the closing plenary, Barbados said it was assured that its proposals for prizes would be covered by the language in 7.1 (new and innovative sources of financing to stimulate R&D). The Barbados intervention led to a procedural question by the USA, followed immediately by substantive support for the Barbados position by India.


There is also plenty of useful language in other sections of the document on this topic, including the front parts (some of which were changed from the draft now on the web).


My own view is that very good progress has been done on the topic of new incentive nechanisms that are not linked to prices of products. This was aided in part by the generally favorable response to substance and concrete nature of the Barbados/Bolivia prize proposals.


What the IGWG did not do was fund anything, not only for prizes, but for grants and other push funding, or AMCS (which are no longer mentioned in the text) or anything else. The US and Europe did not want to talk about money at this meeting. For a number of groups that are looking for something important for funding neglected diseases, this was a major flaw in the negotiations so far. The idea of a biomedical treaty is alive, and the expert working group on financing R&D will carry the conversation forward, but this is clearly a delay that is driven by a lack of political commitment to spend new money in this area.


The debates in May at the WHA will focus on the 18 important paragraphs where there is no consensus. People can usefully begin focusing on these paragraphs, and push their delegations to do the right thing.

Jamie

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http://www.ip-watch.org/weblog/index.php?p=1024


Intellectual Property Watch


2 May 2008


WHO Members Inch Toward Consensus On IP, Innovation And Public Health


By Kaitlin Mara and William New


Members of the World Health Organization (WHO) gathered this week to address innovation and intellectual property issues in public health saw hope for agreement on a strategy paper focused on the needs of developing countries, particularly on neglected diseases. But with two days remaining in the negotiations, difficult issues on intellectual property rights and the action plan remained unresolved.


The WHO Intergovernmental Working Group on Public Health, Innovation and Intellectual Property (IGWG) is meeting from 28 April to 3 May, as a part of its resumed second session (the second session begin in November 2007)(IPW, WHO, 9 November 2007). The current round of negotiations is under mandate to create a consensus document for presentation at the World Health Assembly, which will take place later this month.


Draft Global Strategy on Public Health, Innovation and Intellectual Property as of start of 2 May, 2008 [pdf]


In her opening remarks to the IGWG, WHO Director-General Margaret Chan said that an “agreed framework can make the cycle of product discovery, development and delivery more efficient and more sensitive to health needs in the developing world” by giving the international community a “common tool” to leverage against health problems. She stressed the importance of the negotiations moving forward “as rapidly and efficiently as possible,” and urged a continuation of the “sense of urgency” seen in past months.


Further pressure for resolution has been placed on negotiators by some developed countries who would like to see the IGWG discussions end this week, and to pull the WHO back from involvement with IP issues, according to some participants. Others thought that the negotiations should not be rushed, and one developing country official said, “I hope we don’t do in haste what we will repent later.”


This week’s debate is the result of several years of intensive discussion at the WHO on policies to address the problem that the existing intellectual property system lacks economic incentives for the private sector to invest in research and development (R&D) for diseases primarily affecting those who cannot afford to pay the higher prices necessary to recover R&D costs.


But a larger issue of the role of the WHO in discussions relating to intellectual property is underlying the talks. Many feel the issues belong primarily in the World Trade Organization, World Intellectual Property Organization, or in national laws. But others see the WHO with the lead on public health issues as having been sidelined in global debates as they relate to IP and public health, even as those debates have resulted in rules that have possibly had a pejorative effect on public health.


“The IGWG is a historic opportunity and this should not become a historic failure for lack of response,” Médicins sans Frontières’ Tido von Schoen-Angerer told the plenary. “Governments, and the WHO, must not abdicate from their responsibilities, or pass the buck to others. We are asking you to strengthen WHO’s role in intellectual property and health, to change the way R&D is prioritised and financed so that paying for the research does not equal prohibitive prices, and to take measures to increase generic competition.”


Draft Text Taking Shape


While most negotiations have happened behind closed doors, on 1 May WHO members met as a whole in an attempt to hammer out consensus on the draft global strategy on public health. The talks were able to cover elements two, three and four out of the eight-element draft strategy - covering, respectively, promoting research and development, building and improving innovative capacity, and transfer of technology - and had begun to discuss element five, on the application and management of intellectual property to contribute to innovation and promote public health.


Remaining aspects of element five are expected to be contentious, according to some participants. In general, consensus is being achieved through a relative weakening of provisions, often, but not always, along north-south lines. Compromises involved the insertion of phrases like “possible” and “appropriate.”


The morning’s negotiations focussed on element two, promotion of research and development. Convergence was reached on accessibility to libraries and technical support to create compound libraries in developing countries (Article 2.2.b), and the related article (2.4.c) on the creation of open databases and compound libraries. The United States sought to delete the second article as it felt it was redundant, sparking discussion on the issue.


The dissemination of publicly or donor-funded medical inventions and know-how (Article 2.4.d), and the “incorporation of research exemptions in legislation of developing countries” for public health purposes (Article 2.4.e) were both contested by the United States. Korea agreed with the US on 2.4.d, as one of the suggested ways to disseminate medical know-how was through open licensing and the Korean delegate was unsure if his country had a policy allowing for such licensing.


Brazil and India felt that open licensing was a useful addition to the paragraph, and India mentioned that the use of open source technologies in India was very effective. Jamaica supported India and Brazil. A distinction also was made between proprietary and non-proprietary databases. A compromise was reached with the language “including but not limited to open licensing.”


On 2.4.e, which reads “consider the incorporation of research exemptions in legislation of developing countries to address public health needs, consistent with the TRIPS and the Doha declaration on TRIPS and Public Health,” the United States asked for the paragraph to be deleted, as such issues would be dealt with in the IP chapter (element 5). Delegations pointedly asked the US delegation to explain its problem with research exemptions, as they are covered in both the TRIPS agreement and in US legislation. Japan supported the United States, which argued that the term ‘research exemptions’ was not well-defined, and it was unclear as to its actual scope.


The encouragement and promotion of traditional knowledge (and traditional medicines) was another key debate. Suriname wanted to ensure that traditional medicine is protected from being carried away from its nations of origin and brought back as patented matter. The traditional knowledge clause in element 5, Article 5.1.f, on the creation of digital libraries of traditional knowledge in order to prevent misappropriation, caused much disagreement. Some delegates were uncertain if discussions on traditional knowledge even belonged in the WHO negotiation. Others could not see how a digital database could prevent misappropriation, as it would offer greater access to the knowledge. Several new suggestions were offered, but after lengthy discussion no convergence was forthcoming so the chair suggested interested parties meet outside the plenary. Kenya is chairing this side session.


Another discussion in element 5 reflected a debate that has arisen at other institutions in Geneva that the training on IP in developing countries, such as of patent examiners, should fully reflect public health priorities.


Element 5 seems likely to be difficult to negotiate, with upcoming discussions on provisions such as how to address research involving humans. Delegates on 1 May discussed Article 5.1 and several of its subsections, but had trouble reaching consensus on several topics. In addition to traditional knowledge, a clause on strengthening “education and training in the granting, application and management of intellectual property from a public health perspective” also presented a problem. The US wanted to strike the word “granting” from the paragraph, and other members proposed adding specific references to flexibilities contained in the TRIPS agreement and other instruments. Consensus was unable to be reached.


Under Article 5.1, on the management of intellectual property in a manner that maximises health-related innovation, Suriname was concerned about the ethics of clinical trials, citing examples in which such trials have been conducted in developing countries, aiding medical innovation on drugs that were subsequently out of the price range of individuals who had participated in trials. Suriname wishes to add “maximises health related innovation and access” to the clause; consensus is pending agreement on that addition.


Civil Society Views


The hottest points of disagreement have tended to arise over practical solutions for solving this problem, reflected in the wide variation in proposals from civil society groups addressing negotiators. Public interest advocacy group Knowledge Ecology International’s Jamie Love has suggested prizes and prize funds replace [correction: his position is that they would coexist, see comment below] patents for neglected diseases, and expressed disappointment that most references to such systems in the strategy paper appeared to be surrounded by brackets indicating lack of consensus on their presence in the text. Love suggested that if the governments are not ready at this point in time to achieve real improvements, then perhaps the process should wait for another time.


International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) Director General Harvey Bale said the industry group wants to preserve strong intellectual property protection, which it says promotes innovation, and instead focus on market incentives outside of IP, such as advanced market commitments (AMC) and “fast track” approval for drugs targeting developing country diseases. An AMC is a guarantee of a market in the event a medication or vaccine is developed in order to incentivise the development of health solutions in diseases or for areas where the existence of a market is uncertain or too small to compensate for R&D costs.


Health Action international also said that WHO must have a clear mandate to work in IP and health, and that the final draft strategy should not dilute flexibilities in IP enforcement already guaranteed under the WTO’s Trade-Related Aspects of Intellectual Property Rights Agreement. The European Generic Medicines Association and the International Generic Pharmaceutical Alliance, represented by Greg Perry, said data exclusivity must not be used to create market exclusivity beyond patent protection.


“IGWG must systematically address innovation and access to medicines” and should “delink the cost of research and development from the price of developed products,” said Sarah Rimmington of Churches’ Action for Health. The role of WHO should be strengthened on IP and issues in health, and the organisation should “provide active guidance, specifically on TRIPS flexibilities.”


The International Alliance of Patients Organizations called for IGWG recognise patients and patient organisations as key stakeholders.


MSF’s von Schoen-Angerer urged that the medical R&D process be government-led, and said it appeared wealthy countries objected to a proposed R&D fund without offering alternatives.


Kaitlin Mara may be reached at kmara@ip-watch.ch. William New may be reached at wnew@ip-watch.ch.


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http://www.ip-watch.org/weblog/index.php?p=1027


Intellectual Property Watch


6 May 2008


WHO IP And Health Group Concludes With Progress; Tough Issues Remain For Assembly


By Kaitlin Mara and William New


The World Health Organization (WHO) negotiations on public health, intellectual property and innovation ended Saturday with substantial progress toward consensus on a draft strategy but with a plan of action remaining and the most contentious articles in the strategy still under brackets - indicating lack of agreement - as the paper goes to the World Health Assembly.


The air in the room was cautiously optimistic as WHO Director General Margaret Chan’s closing comments praised the assembled delegates at the 28 April to 3 May Intergovernmental Working Group on Public Health, Innovation, and Intellectual Property (IGWG) for reaching consensus on 107 paragraphs (many through deletions) that had been unresolved at the meeting’s start Monday.


The group’s mandate from the 2006 Health Assembly was to agree on a strategy and plan of action to boost research and development of, and access to, treatments for diseases disproportionately affecting developing countries, in time for this year’s annual assembly. If sufficient agreement is reached on the remaining items and the plan of action, implementation of the strategy should follow.


But there was also a sense from many delegates that substantive work lies ahead, and some nongovernmental organisations expressed disappointment at the IGWG’s perceived lack of strong commitment to public health, and the potential lost opportunity to make a profound difference.


While the global strategy being drafted by the group is not legally binding, it is being taken seriously by governments and other stakeholders because it could have a significant impact on policy. “It is a political document,” said one official. “It can have a lot of weight.”


Both developing and developed countries representatives found positive things to highlight about the IGWG, though it is clear that outcomes are not yet guaranteed and large gaps remain between what different stakeholders want from the draft strategy. Much of the work was done in closed informal sessions, often into the night, participants said.


Some key outcomes or debates were the proposed creation of an expert group on financing and the coordination of R&D, a mention of prizes as a possible alternative incentive for research and development, and policies on human clinical trials, competition, counterfeit medicines, and the role of the WHO on international IP and innovation issues.


Also significant was the apparent removal of advance market commitments, which would have created a mechanism for ensuring a market for new drugs, sources said. One source also said there was now a separation of provisions relating to access from those relating to intellectual property rights.


Ambassador Tom Mboya Okeyo of Kenya said the outcome’s impact will take time to see but that it was a good step. He noted consensus on provisions on access to medicines, and on flexibilities in the international IP system to accommodate access. Also agreed were several provisions that could strengthen innovation on essential medicines and encourage sustainable financing mechanisms, and provisions that could help protect traditional medical knowledge, all of which are important to developing countries, he said. The next challenges are in ensuring the key actions outlined in the strategy are implemented quickly, he said, adding that he hoped the WHO director general could mobilise funds for that purpose.


Suriname delegate Miriam Naarendorp called the week’s outcome the “start of the battle,” with the plan of action and implementation issues still to come. However, it was an important start, as, Naarendorp said, the IGWG was able to identify issues important to developing countries, and that the developing nations “stood firm on things that mattered” and had created a document that the WHO could not ignore.


An official from a leading developing country praised the outcome as successful as “so many member states agreed on so many things.” And a third developing nation delegate added that “we’ve made tremendous progress here [and] I expect we will get it finished at the World Health Assembly.” The assembly meets from 19 to 24 May.


A key developed country source was more concerned that the IGWG seemed to have averted potential negative consequences, saying that “the possibility of impact on the IP system has been reduced” and that “there were a lot of proposals that could have undermined innovation.”


Nongovernmental groups had higher hopes going into the meeting, for an outcome with profound effects on health product development for the poor. Over one hundred civil society organisations and patients groups signed a “joint declaration” (pdf) stating that “health is a fundamental human right and a necessary condition for human dignity” and calling for the IGWG to find sustainable solutions to encourage both innovation in healthcare and access to the fruits of that innovation, and several eminent academics signed a similar statement asking for IGWG delegates to consider “the exploration of new and innovative mechanisms that seek to correct the deficiencies of the current system” of drug development and delivery.


Draft Strategy Text Advances


The latest available version of the draft strategy was from the start of the last day, 3 May. Click here to read the 3 May version [pdf].


Delegates were able to reach full consensus on five out of eight elements within the draft global strategy, which includes principles for using the intellectual property system to maximise public health impact, particularly in innovation related to developing country diseases. Full consensus sections were element 1, on prioritising research and development needs; element 2, on promoting research and development; and element 3, on building and improving innovative capacity.


Article 3.4 outlines ways to support “policies that will promote innovation based on traditional medicine,” as well as Article 3.5.b, which encourages “the establishment of award schemes for health-related innovation.”


Article 5.3.a, which also saw consensus, mentions prizes as an innovation incentive, an issue important to developing countries and some nongovernmental participants. Barbados and Bolivia submitted a document at the outset of the week’s meeting proposing alternative incentive schemes for drug innovation in the form of prize funds for inexpensive tuberculosis diagnostic testing, for a Chagas disease treatment, for priority medicines and vaccines, and for cancer treatments. The document also calls for a global agreement on funding clinical trials as public goods.


Element 4, on transfer of technology, was largely agreed upon, with the exception only of element 4.1.b, which reads “promote transfer of technology and production of health products in developing countries through investment and capacity building, including by providing guidance on appropriate technologies.” As of the end of 2 May, this article was listed “consensus pending USA.” One developing country official said that in general the United States was “a bit tough” in negotiation, referring to the fact that the country was often the sole voice blocking consensus (though there may have been others unspoken). The US delegation included an IP negotiator from the US Trade Representative’s office.


Element 7, on promoting sustainable financing mechanisms, also reached full consensus, as did element 8, on the establishment of monitoring and reporting systems. The agreement on element 7 was reached only after a lengthy debate, Barbados said during the IGWG’s closing plenary session. Article 7.3, which detailed several strategies for the establishment of a global R&D fund to address gaps in diseases affecting developing countries, including the use of prizes and rewards as well as earmarked funds for patent buyouts to ensure access to medicines, was deleted by consensus.


Barbados asked during the final plenary that it be officially noted that this consensus was predicated on an understanding by Barbados and the rest of the Caribbean group, as well as Bolivia, that these issues be addressed under 7.1.a. That article calls for the establishment of a “results-oriented and time-limited expert working group under the auspices of the WHO and linking up with other relevant groups to examine current financing and coordination of research and development, as well as proposals for new and innovative sources of financing to stimulate research and development” relevant to developing countries.


Element 5, on the application and management of intellectual property to contribute to innovation and promote public health, and element 6, on improving delivery and access, proved the hardest on which to reach consensus.


Still remaining to be resolved are issues of data-sharing, specifically through the creation of easy-to-use global databases on the status health-related patents (under article 5.1.c); on the training of patent examiners in intellectual property application and management, and possibly on TRIPS flexibilities (under article 5.1.e); on promoting competition to increase availability of health products under article 6.3, and particularly on support for the production/introduction of generic medicines (under 6.3.a). Another issue under debate in the strategy related to agreements that impose stricter intellectual property standards than agreements in the multilateral system (so-called TRIPS-plus provisions).


On 5.1.h, which originally stated, “establish measures to avoid unethical experiments involving human beings as a requirement for registration of medicines and technologies,” sparked a lengthy discussion on 2 May on the nature of ethics in human testing. Points discussed included: the difference between clinical tests for new drugs, or the bioequivalence tests done when generics are marketed, the ethics of testing new drugs against placebos when existing treatments are available for comparative testing (the Declaration of Helsinki, which lays out ethics of healthcare research, and says that new methods of treatment should be tested against the best existing treatments, where available, and not placebos), and the ethics of repeating a clinical test because the original tester has exclusive control over the results of first test and will not make the data public. Also of interest, especially to developing countries, was ensuring post-trial access to drugs by study participants, which the Declaration of Helsinki calls “necessary.”


The article eventually passed consensus on the condition it be moved from element 5.1 on information sharing and capacity building on health-related innovation to element 6.2, which covers ethical review and quality/safety regulation. The final text reads: “promote ethical principles for clinical trials involving human beings as a requirement of registration of medicines and health-related technologies, with reference to the Declaration of Helsinki, and other appropriate texts, on ethical principles for medical research involving human subjects, including good clinical practice guidelines.”


Other debates under element 5 included a provision on preventing anti-competitive practices related to IP rights, language on encouraging respect for flexibilities in the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and a possible clause on counterfeit health products, including a definition. Some sources said an effort is being made to clarify the distinction between counterfeit products and generic products.


Also under element 5, a discussion was held on the role of the WHO on IP-related matters. Officials present from the World Intellectual Property Organization and the World Trade Organization signalled resistance to a proposal to create a formal coordinating body between agencies under Article 5.1.i. Creating a formal coordination effort would, a WIPO official said, just “add governance issues” to the already functioning informal collaboration that currently exists.


One participant said an informal relationship was seen as possibly minimising interagency turf battles. Still, some participants viewed the outcome as having strengthened the role of the WHO in IP issues. Consensus Article 5.1.f states, “strengthen efforts to effectively coordinate work relating to intellectual property and public health among the secretariats and governing bodies of relevant regional and international organizations (including WHO, WIPO and WTO) to facilitate dialogue and dissemination of information to countries.”


The traditional knowledge debate discussed earlier in the week (IPW, Public Health, 1 May 2008) was resolved after the Kenyan-led informal session came up with the text “facilitate, where feasible and appropriate, possible access to traditional medicinal knowledge for use a s prior art in examination of patents, including, where appropriate, the inclusion of traditional knowledge information in digital libraries.”


Lost Opportunities and Some Progress


Concerned entities and other nongovernmental organisations participating at the event were not entirely pleased with the outcome of the negotiating process.


Médecins Sans Frontières (MSF) sharply criticised the IGWG, saying it had “failed to take concrete action towards reforming a medical innovation system that largely disregards the health needs of millions of people in developing countries.” Tido von Schoen-Angerer, director of MSF’s access to medicines campaign said that negotiators had not “risen to the challenge” of “prescrib[ing] change to a broken system.” He called the working group a “lost opportunity,” particularly because there had been no consensus on the development of alternative research and development incentives.


Ethan Guillen, executive director of Universities Allied for Essential Medicines (UAEM) also expressed surprise at “the lack of bold commitment by most of the rich countries” and said “that there had to be stiff negotiations on the idea that the cost of medicines impedes access in the developing world makes you wonder if some negotiators hadn’t noticed that busloads of American retirees have to hop across the US border to Canada to get drugs they can afford.”


Sarah Rimmington, an attorney at public interest organisation Essential Action, said IGWG was meant to address how “the current corporate sector system of medical R&D, which is based on patent monopolies, has largely failed people in developing countries.” Rimmington said while the IGWG had taken an “important first step by agreeing to explore some common sense measures to address this failure,” such as innovation incentives not reliant on patent monopolies, consensus on actual implementation processes was not reached. This lack of agreement was, she added, largely due to “resistance from developed countries such as the United States, the EU, and Canada” and added that it “is hard not to wonder if pressure from the brand-name pharmaceutical industry - which is based in developed countries and remains ideologically committed to patent monopolies - influenced this disappointing outcome.”


[AS NOTED IN THE PRIOR ARTICLE DATED MAY 2ND, SARAH RIMMINGTON IS ALSO THE REPRESENTATIVE OF ANOTHER NON-GOVERNMENTAL ORGANIZATION THAT PARTICIPATED IN THE IGWG MEETINGS: Churches’ Action for Health.]


Jamie Love of Knowledge Ecology International said the IGWG “did next to nothing on identifying R&D priorities, estimating funding needs, or creating a framework for sustainable funding for priority R&D, three tasks central to its mission.”


Harvey Bale, director general of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), when asked about whether this meeting represented progress toward the goal of addressing the problem of neglected diseases, said it “has lost focus on that,” but added that there was hope it could come back. He stressed the importance of advanced market commitments, or guarantees of a market in the event a medication or vaccine is developed (which were deleted from the draft strategy). He also stressed the importance of partnerships for development that link companies and the public sector in coordinated research efforts.


But there were also some positive views. Guillen said his group was “pleased to see the advancement… of important issues like technology transfer” in the draft strategy and said UAEM is “hopeful that consensus recommendations on open licensing and other technology transfer provisions agreed to during this round will send a strong message to universities… to adopt policies that will free up the tools of innovation and make medicines discovered on campuses available at low-cost in the developing world.”


Love was pleased to see that advanced market commitments had come out of the draft strategy and prizes had been included.


Nicoletta Dentico, policy and advocacy manager at the Drugs for Neglected Diseases Initiative (DNDi) said “the outcome of this intense week-long negotiation shows that some uncertain lights are looming, but still in a forest of thick shadows” that research on essential medicines still faces the “resistance of those who have set the direction of innovation so far” but that hopefully the “"spirit of Geneva” [would] clear, in the face of poor people’s needs, the shadows.”


MSF has said that, as the IGWG failed to arrive at strong conclusions, it is now up to the World Health Assembly “to translate bold ideas into concrete action.”


Kaitlin Mara may be reached at kmara@ip-watch.ch. William New may be reached at wnew@ip-watch.ch.

Friday, April 4, 2008

Academic and Healthcare Activists Secretly Discuss Possible Thai Compulsory Licensing Pricing Strategy to Undermine USTR/PhRMA


The following colloquy took place during April 1-4, 2008, between James Love of Knowledge Ecology International (KEI), a George Soros-funded health and human rights activist group, and several left-leaning US, UK and Australian university professors:


Northeastern University Professor Brook Baker, Boston University Professor Kevin Outterson, Cleveland State Univ. College of Law Professor Michael Davis, London School of Economics Professor Ken Shadlen, Australia National University Professor Peter Drahos and an anonymous professor who identifies himself by the pseudonym "Miles Teg" (Miles Teg is a fictional character in the Dune universe created by Frank Herbert... Miles Teg was a military genius and became Supreme Bashar of the Bene Gesserit, winning many victories. He had a very strong sense of honor, loyalty, and had the many characteristics of House Atreides. He is well known for doing the unexpected. See Wikipedia, at: http://64.233.169.104/search?q=cache:bF17aBEckDcJ:en.wikipedia.org/wiki/Miles_Teg+Miles+Teg&hl=en&ct=clnk&cd=1&gl=us ).
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http://lists.essential.org/pipermail/ip-health/2008-April/012421.html


B.Baker@neu.edu mailto:B.Baker%40neu.eduTue Apr 1 11:07:01 2008


I think there are four interest facets of the U.S. statement in the Thai NTB report (reprinted below).


"Thailand's Ministry of Public Health has issued compulsory licenses on certain patented drugs. The United States acknowledges Thailand's ability to issue compulsory licenses to address public health emergencies, subject to Thailand's domestic and international legal obligations as a WTO Member. At the same time, the United States has expressed concern regarding a lack of transparency in the process and about the potentially expansive use of compulsory licenses. The United States has urged Thailand to address judiciously the complexities of the relationship between health and intellectual property policy and to do so in ways that recognize the role of intellectual property in the development of new drugs."


1. The U.S. continues to misinterpret the circumstances where compulsory licenses can be issued, suggesting that they are appropriate only to respond to public health emergencies.


2. The U.S. continues to suggest that the licenses were issued in a non-transparent manner, thereby failing to acknowledge the protracted negotiations that preceded the 2006-07 licenses on efavirenz, clopidrogel, and lopinavir/ritonavir and the even more intensive consultations that preceded the issuance of the four cancer CLs in 2008.


3. The U.S. adds a new concern, namely that the use of compulsory licenses will become "potentially pervasive." Of course, Thailand has been careful to set up a stringent screening process, has established strict needs-based standards, and has issued CLs on only a tiny portion of the medicines patented in Thailand.


4. Finally, the U.S. has used relatively muted language and has not in any sense "signalled" an intention to identify Thailand as a Priority Watch Country, despite earlier publicity about this possibility.


Jamie Love has previously suggested that Thailand (and perhaps other middle-income countries) could address the stated U.S. concern about "contributing to the development of new drugs" by revising upwards the royalty rate on its compulsory licenses (currently ranging from .5%-5% on the generic price). Although international compulsory licensing practice and commercial practice support royalty rates in this range, it is important to note that commercial royalty rates are ordinarily based on sales at monopoly prices, resulting in much higher absolute payments per pill.


Even though it is by no means required to do so, Thailand could gain credibility with U.S. Congressional leaders and undermine USTR/PhRMA attacks, by offering an additional, and perhaps targeted R&D royalty. One idea would be to target the royalty to type-I and type-II (neglected) diseases affecting the Thai population. If the affected drug company were willing to accept the additional royalty on this basis, the R&D could be done anywhere. However, an even better alternative would be that the targeted research be conducted in Thailand in universities, research institutes (if any), or even in the GPO. Agreements would need to be reached in advance about the eventual co-ownership/marketing of innovative products, but this kind of targeted research could entail technology transfer, building of research capacity, and perhaps even expansion of pharmaceutical capacity in Thailand.


There are risks in such a proposal, including that the standard royalty rate will be higher and that fewer patients will be treated from the same health budget, but there may be political advantages from indicating a willingness to pay a little more for innovative R&D as long as it focuses on developing country needs.


Brook

Professor Brook K. Baker, Health GAP
Northeastern U. School of Law
Program on Human Rights and the Global Economy
400 Huntington Ave.
Boston, MA 02115
617-373-3217 (office)
617-259-0760 (cell)


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mko mailto:mko%40bu.eduWed Apr 2 06:26:04 2008


I agree that middle-income countries should explore higher royalty rates on generically-priced drugs sold under a CL. Doing so wouldn't harm access much; indeed if the higher royalty reduced opposition from USTR & IFPMA, then access could be dramatically improved. I've tried to model these CL royalties or patent buy-outs from the opportunity cost in R&D from the foregone revenues:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=873402


Kevin Outterson
Boston University

Boston University School of Law
765 Commonwealth Ave., Boston MA 02215
617 353 3103
http://ssrn.com/author=340746

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Miles Teg mailto:b.miles.teg%40gmail.comWed Apr 2 09:20:02 2008


Why should developing countries reduce their legal flexibility to determine royalty rates by such "self regulation"? Is it a realistic that opposition to CLs in developing countries would reduce?


bmt

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michael.davis@law.csuohio.edu mailto:michael.davis%40law.csuohio.eduWed Apr 2 09:54:00 2008


There is no reason for them to do that. It is a classic trap, the kind of advice you would give to a prisoner at Guantanamo ("Behave and we won't torture you.") It also smacks too much of the unstated "Trust me," which is never advice you should take from an adversary.


Mickey Davis

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B.Baker@neu.edu mailto:B.Baker%40neu.eduWed Apr 2 14:47:10 2008


Miles and Mickey have raised sensible questions about whether it is politically wise to raise royalty rates in the hopes of encountering less resistance from patent holders and their governmental proxies in the USTR and European Union. It may well be that there is no real appeasing of opponents to lawful utilization of TRIPS-compliant compulsory licenses - that they will always use disinformation and misinformation to challenge CLs and whatever royalties are paid.


Evidence of such continuing opposition can be found in the still strident attacks against Thailand's recent compulsory licenses on cancer drugs, even though Thailand raised the royalty rate from .5% to 5%.


All that Article 31 of the TRIPS Agreement requires is that "the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization." This clause gives wide latitude to governments to assess the circumstances and the economic value of the license. As Jamie Love's detailed study of
remuneration rates showed, countries can make such choice by weighing factors or pursuant to percentage royalty guidelines, so as long as individual determinations are made in each case.


However, contrary to Miles' and Mikey's critique, I think it is useful for ATM activists to speculate about royalty rates that "might" reduce political opposition and about royalty schemes that might actually increase research and development into neglected diseases and/or spur increased R&D activity in developing countries. There is no presumptively "polically correct" royalty rate, and Thailand engaged in a politically astute, self-determined decision to raise its royalty rate on the new cancer CLs. Did they do so as Guantanamo prisoners or as colonial subjects - I think the suggestion is a little insulting.

Professor Brook K. Baker, Health GAP
Northeastern U. School of Law
Program on Human Rights and the Global Economy
400 Huntington Ave.
Boston, MA 02115
617-373-3217 (office)
617-259-0760 (cell)

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mko mailto:mko%40bu.eduWed Apr 2 14:47:32 2008


I'm sure I've been misunderstood here.


My point is simply that CL, while entirely legal under TRIPS, is politically difficult given the sustained attack by USTR and big phrma. Modifying the royalty structure might take away one argument in their quiver: "CL will destroy innovation!"


I'd describe it as disarming your opponents by being reasonable.


Having said that, being reasonable with phrma doesn't have a great track record.


Kevin Outterson
Boston University

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James Love mailto:james.love%40keionline.orgWed Apr 2 15:34:01 2008


My view regarding royalty rates and trade pressures is that royalty payments that are too low will be considered unreasonable, and will not be politically sustainable. As a matter of some recent history, I did not want to defend a .5 percent royalty rate, applied to generic prices, and I don't think it helped the countries that choose that rate. Even if people don't understand much about this topic, .5 percent sounded pretty low.


The more recent higher royalty rates in Thailand have I believe made it easier to Thailand to keep the new compulsory license. Even more important, of course, have been the actions of the Thai activists, who have done the really important work in pushing the Thailand government
to protect consumer interests.


In the longer run, we think that governments in developing countries should simply set aside an appropriate fraction of health or drug purchase budgets, to reward drug developments, and de-monopolize all drug purchases. Some people in the Thai government have suggested doing this, and there is a discussion about whether or not this is a better business model for the Global Fund and other donor funded drug purchases. Agree on how much money goes to innovators, and then buy everything at marginal cost, increasing access and improving outcomes.


Once the negotiation turns to the fraction of the drug budget that goes to innovators, and marginal cost pricing of products is accepted, you can begin to have a rational policy discussion.


Jamie

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Peter Drahos mailto:peter.drahos%40anu.edu.auThu Apr 3 08:10:02 2008


I do not believe that upping the royalty rate will reduce the pressure on countries like Thailand. During the Uruguay Trade Round, the US made a lot of promises about backing off on its trade unilateralism if developing countries signed up to the WTO, TRIPS and its jolly nice dispute resolution mechanism. The FTA IP jihad followed soon after. I also think there may be cases where .5% will be appropriate. Hard to see how a country like Laos can afford much more.


Of course, this Thai saga has in part been about sending a message to other countries in the region about what to expect if they exercise their lawful rights =AD Al Capone and the boys are
gonna pay you a visit and now there=92s a minimum rate you can=92t go below=.


Chomsky somewhere has a nice line about domination in the world today =AD =93the rule of law
for the weak, the rule of force for the strong=94


Peter Drahos

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James Love mailto:james.love%40keionline.orgThu Apr 3 10:40:03 2008


There is no doubt that there is plenty of bullying, lying, angling for industry jobs after leaving the government, and other mean spirited stuff going on here.


Even so, Thailand has benefited at least somewhat from interventions from some sympathetic members of the US Congress and government (and the European Parliament and EC), and this has and I hope will continue to moderate somewhat the full brunt of the fury that PhRMA would like to see unleashed. To this end, the .5 percent royalty rate was unhelpful, bad PR, and almost completely unnecessary in terms of the policy.


To make things more concrete, the price of Plavix dropped from 77 to 1 baht once competition was introduced. A royalty of .5 percent of 1 baht was .005 baht per pill, or 1.825 baht per year, equal to about 6 US cents at current exchange rates. A 5 percent royalty, 10 times as high, would have been a royalty of 18.25 baht per year or 58 US cents, per year.


The price of Plavix before the CL was $888 per year. After the CL, it was $11.53 per year. Arguing about 6 cents versus 58 cents is losing sight of the big picture, I think.


Jamie

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Ken Shadlen mailto:k.shadlen%40lse.ac.ukFri Apr 4 18:04:02 2008


But if the difference between the amount per unit that goes to the originator firm whether the royalty rate is .5% or 5% is so tiny as to be nearly insignificant from the government's perspective, which is what I'm reading here in Jamie's post, then wouldn't it also be insignificant to PhRMA? I see the point about not wasting energy wrangling about 6 cents vs. 58 cents, but I can't see how this would reduce the backlash. To the contrary, I think Jamie has presented a pretty good argument as to why a CL with 5% -- even higher -- would still leave PhRMA far from satisfied in the context of a reduction of ~$775/unit.

I write this without being in Washington or having close daily contact with Washington. Are there people in Congress (or USTR) that would be more sympathetic to the Thai government were they paying .58/unit rather than .06/unit?

Ken




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James Love mailto:james.love%40keionline.orgFri Apr 4 23:05:03 2008


The reduction is per unit of sales. But note also that sales were approximately zero for the bottom 80 percent of the population.


... First off, PhRMA is focused on maintaining the monopoly. In Malaysia, where the "government use" CL proposed a 4 percent royalty, GSk didn't even want to take the money. They thought it would signal an acceptance of and legitimacy for the CL. In some cases, when a country was serious about a CL, the patent owner announced they would give away the drug, to undermine efforts to issue a CL. This was the outcome of the fluconazole case in South Africa, for example. PhRMA is entirely devoted to opposing the use of CLs, because they want to a monopoly, and they believe a monopoly will lead to higher profits than government set royalty payments, and they see each of the CL cases as setting precedents for the future.


Thailand and other countries feel some pressure from PhRMA members, but the biggest pressures come from governments in the North, particularly from the US and the EC and the EU member states. While it may seem so at times, governments in the North do not take their instructions verbatim from the patent owners. The US and the EC have much broader interests and concerns, and the demands of the PhRMA companies are part of a larger calculus that also includes non-PhRMA trade with Thailand and other countries, and genuine concern about the poor in developing countries. If the USTR or DG-Trade goes ballistic in demanding high prices for life saving drugs in Thailand, it can't exactly expect to achieve all of the other demands it might want to make, to address the concerns of other US or EU companies. USTR and DG-Trade spend a fair amount of time fighting off PhRMA lobbying, so they can address the broader trade agenda (which is why we have the 2001 Doha Declaration). In this respect, something like the royalty rate becomes relevant, because it is used in the EU and the US Congress as evidence one way or another that Thailand is acting reasonably.


The Average US royalty rates are probably close to 5 percent, and in fact, that is the number used in some PhRMA submissions to USTR. And profit rates in competitive sectors of the economy probably run around 3 to 5 percent. In this respect, royalties of 3 to 5 percent seem, on their face, pretty reasonable, to a lot of people. Royalties of .5 percent seem pretty low, particularly to hill staffers and others who have little time for detailed economic analysis of the Thai pharmaceutical market.


Our own work on royalties has been more nuanced and sophisticated than this, and in the 2005/WHO/UNDP Tiered Royalty Method (TRM), I recommended a system of royalty setting that is based upon a percentage of the putative value of the medicine in high income countries, adjusted for the relative income of the countries where it is consumed. This is conceptually an appealing way for setting royalties in developing countries, but because it is novel and more complicated than simply using a percent of the generic price, it has not been used.


In general, however, it may be easier just to simplify everything even more, and link the de-monopolization of the drug sector (for marginal cost pricing of products), with a system of rewards for drug developers that is pegged to some fraction of the drug purchase budget or health care budget. The political demand from developing country governments and consumer groups would be to ensure access through marginal cost pricing of products, while conceding the legitimacy of a separate argument over the amount that a country gives to innovators. I think this is an argument that can be won, and it can be the basis for a sustainable long term change in the business model for paying for innovation. The rewards to innovators could be rationally linked to the impact of products on improvements in health outcomes. The more the "ask" makes sense (and is perceived to make sense) in terms of the legitimate interests of both consumers and drug developers, the higher are the odds of really changing things.


Jamie

Saturday, March 8, 2008

Thai Health Activists Are Misled To Believe Their Government is 'Licensed' to Steal Private Drug Patents From Foreign Investors Pursuant To WTO Law!!

Letter to Editor from Thai Network of People Living with HIV/AIDS, concerning "Bangkok's Drug War, Round Two"


Thu, 6 Mar 2008


Dear Editor,


I am one of the 'packhounds' that you accuse of spreading scare stories in your editorial (Bangkok's Drug War, Round Two) of 27 February 2008. My organization, which consists of people living with HIV/AIDS in Thailand, supports access to necessary drugs for all Thais, not just the rich minority that can pay the prices charged by pharmaceutical companies enjoying monopoly patents.


[THE THAI GOVERNMENT HAS THE LEGAL & POLITICAL RIGHT TO DEVELOP AN HIV/AIDS UNIVERSAL ACCESS TO MEDICINES PROGRAM AT ITS OWN EXPENSE. BUT IT DOES NOT HAVE THE RIGHT TO DEMAND FINANCIAL SUPPORT FROM FOREIGN INVESTORS; OTHERWISE IT RISKS TRIGGERING CAPITAL FLIGHT].


Your article is sadly misinformed. What you call the 'loophole' of compulsory licensing (which is what has kept some of my friends alive) is in fact a piece of international law that was heavily negotiated and agreed by all member countries of the WTO.


[THIS IS NOT TRUE. THERE WAS NEVER A CONSENSUS ON THE SCOPE OF THE COMPULSORY LICENSING PROVISIONS WHICH HAS BEEN EXPLOITED BY FOREIGN GOVERNMENTS AT THE INSISTENCE AND ENCOURAGEMENT OF ACADEMICIANS AND NGOS].


The Thai government did not 'seize' patents; it used the same legal right that many other countries have used, including the United States, whose threats of trade sanctions so worry the new Thai Minister of Public Health.


[WHEN HAS THE UNITED STATES ACTUALLY ISSUED A DE JURE COMPULSORY LICENSE?? PLEASE DO NOT RELY ON THE MISLEADING INFORMATION PROVIDED BY KEI'S JAMIE LOVE].


You claim that the need for access to life-saving HIV, heart disease and cancer drugs is not a clear emergency in Thailand. Cancel the free distribution of drugs made possible through compulsory licences and thousands of Thai will be dead in weeks. The emergency is clear enough to them.


[WITH THIS RATIONALE, ANY DISEASE THAT INFLICTS A SUBPORTION OF A POPULATION WILL BE DESIGNATED AS AN 'EPIDEMIC' UNDER THE EVOLVING WORLD HEALTH ORGANIZATION STANDARDS AND THEN DECLARED A 'HEALTH EMERGENCY' FOR PURPOSES OF TRIPS!!]


And you claim that 'the other side of the argument' is 'missing'. Given the intense lobbying of the new Minister by what you call 'Big Pharma', supported by the US government and enjoying far richer resources than my organization can muster, this is hard to swallow.


[PHARMA COMPANIES HAVE LEGAL ECONOMIC RIGHTS TO DEFEND THEIR EXCLUSIVE PRIVATE PROPERTY, AN ECONOMIC ASSET AGAINST GOVERNMENT EXPROPRIATION. WHY IS IT WRONG FOR THEM TO PROTECT THEIR PRIVATE INTERESTS???]


It took my organization and our allies (in the government, the media, and academia, as well as in other NGOs) a long, long time to get our government to exercise its legal right to compulsory licensing.


Please do not misrepresent our case, bully our government or call us names.


Virat Purahong,
The chairperson of Thai Network of People Living with HIV/AIDS (TNP+)
494 Soi Nakornthai 11
Ladproa 101 Road,
Klongjan, Bangkapi
Bangkok, Thailand 10240
Tel (66)2377-5065 Fax (66) 2377-9719
E-mail : tnpth@thaiplus.net

KEI Encourages Thai Taking of Private Drug Patents For Government's Own Public Use: Misleads About Law of Compulsory Licenses

http://www.keionline.org/index.php?option=com_content&task=view&id=168


His Excellency
Mr. Samak Sundaravej
Prime Minister
Government House
Nakornpratom Rd.
Dusit, Bangkok
Thailand 10300


His Excellency
Mr. Chaiya Sasomsap
Minister of Public Health
Tiwanont Rd.
Talad Kwan District
Nontaburi Province 11000
Thailand


March 4, 2008


Re: Thailand Compulsory Licenses and public health


Dear Prime Minister Sundaravej and Minister of Public Health Chaiya Sasomsap:


We are writing to address an issue of the utmost importance. Specifically, we urge the Thailand government to support its earlier decision to use TRIPS flexibilities and issue compulsory licenses on medicine patents.


Knowledge Ecology International (KEI) is a not-for-profit organization based in Washington, DC and with offices in Geneva and London, with extensive experience in providing technical assistance to governments and international organizations in the promotion of public health and advocating for the protection of patient interests.


Every sovereign government that grants patents on inventions also provides mechanisms for compulsory licenses. While the grounds for issuing a compulsory license differs from country to country, there is widespread agreement that such licenses are consistent with international law, particularly in, but not limited to, cases involving public health.


We are attaching a report on the use of compulsory licenses by other countries. It not only reports on compulsory licenses on medicines in developing countries, but also on the granting of compulsory licenses in high income countries, such as three recent compulsory licenses on medicines issued in Italy, and dozens of compulsory licenses issued in other fields of technology, such as software, digital television receivers, and automatic transmissions.


[KEI''S VAUNTED REPORT IS INACCURATELY PORTRAYS WHAT A COMPULSORY LICENSE IS AND IS NOT. MR. LOVE CONTINUES TO CONFUSE de jure COMPULSORY LICENSES WITH de facto COMPULSORY LICENSE, AND THEN EXAGGERATES ACTIONS THAT DO NOT CONSTITUTE de facto COMPULSORY LICENSES. HE ALSO MISLED THE THAI GOVERNMENT TO BELIEVE THAT COMPULSORY LICENSES ARE PERFECTLY LEGAL ANYTIME A GOVERNMENT SUBJECTIVELY DETERMINES THERE TO EXIST A PUBLIC INTEREST. THE WTO TRIPS AGREEMENT DOES NOT SAY THIS]


The United States will soon have a new president. All three of the leading candidates, Senators McCain, Obama and Clinton, are critics of the pharmaceutical industry. All three candidates care about access to medicine, and all three candidates are looking to repair and enhance the standing of the United States in the world community. Thailand should not assume that it will suffer if it stands by its earlier decision to issue compulsory licenses.


[BEG TO DIFFER: NOT ALL THREE OF THE CANDIDATES ARE WILLING TO FORCE U.S. CITIZENS TO GIVE AWAY THEIR PRIVATELY OWNED PROPERTY - DRUG PATENTS - TO SUIT THE NEEDS OF A THIRD COUNTRY, AND THEREBY ENDANGER U.S. DRUG INNOVATION PIPELINES. THOUGH, WE ARE WILLING TO BET WHICH TWO OF THE CANDIDATES WOULD BE WILLING TO DO SO!!]


On the other hand, if Thailand now backs down and cancels the compulsory licenses, it will be perceived as an acknowledgment that Thailand did something wrong earlier. It will make it much more difficult to issue compulsory licenses in the future, and it will undermine the relationship between Thailand and suppliers of generic medicines. If Thailand reverses its position, other developing countries will be deterred from using compulsory licenses, and Thailand will be seen as aligning itself with large pharmaceutical companies, against the interests of the poor.


[WELL, IF THE SHOE FITS, WEAR IT! YES THAT IS EXACTLY THE POINT - THE THAI GOVERNMENT WOULD VIOLATE INTERNATIONAL LAW (THE TRIPS AGREEMENT) BY ISSUING THOSE COMPULSORY LICENSES. THE TRUE QUESTION IS WHETHER THE GOVERNMENTS OF THE PATENT HOLDERS HAVE WHAT IT TAKES TO DEFEND THEIR CITIZENS' INTERESTS.]


Members of the U.S. Congress are monitoring the USTR and the Department of State to ensure that the US government respects the 2001 Doha Declaration on TRIPS and Public Health, and does not bully Thailand on this issue. Many public health and development organizations, including KEI, are supportive of the use of compulsory licenses to increase access to medicines in developing countries. Thailand has much to gain by supporting it's earlier decision, and very much to lose by repudiating that decision.


[YES, THAT IS TRUE. MEMBERS OF THE 110TH CONGRESSIONAL MAJORITY HAVE INTRODUCED LEGISLATION THAT WOULD CHANGE U.S. LAW TO PERMIT THE U.S. GOVERNMENT TO DECLARE COMPULSORY LICENSES THAT 'TAKE' U.S. DRUG PATENTS (EXCLUSIVE PRIVATE PROPERTY) AWAY FROM THEIR PRIVATE OWNERS FOR THE BENEFIT OF THIRD COUNTRIES SUCH AS THAILAND, THEREBY ENDANGERING THE U.S. INNOVATION PIPELINE!!]


Sincerely,


James Love
Knowledge Ecology International

Friday, March 7, 2008

In the Thais' Eyes, Drug Patent Holders Must Fund Governments' Political Healthcare Promises

http://www.iht.com/articles/ap/2008/03/03/asia/AS-GEN-Thailand-Drug-Patents.php


Head of Thailand's Food and Drug Administration resigns after one week


The Associated Press


Monday, March 3, 2008


BANGKOK, Thailand: The recently appointed head of Thailand's Food and Drug Administration resigned Monday amid controversy over the new government's plan to review a policy of overriding patents on several expensive cancer-fighting drugs.

Chatree Banchuen was named secretary general of the FDA last week, making him the government's chief negotiator with multinational drug companies over pricing and licensing terms.


Chatree said he decided to resign because he felt "uncomfortable with the politics," explaining that critics had brought up old, unproven allegations linking him to corruption in a computer procurement project in 2003. He called the allegations "politically motivated and groundless," without elaborating.


Chatree's predecessor, Siriwat Thiptharadon, was transferred to an inactive post last Tuesday by the new government of Prime Minister Samak Sundaravej. Siriwat called his transfer unfair, charging it was because he supported compulsory licensing of drug patents.


Compulsory licensing is intended to make some drugs more affordable by taking away the patent holder's ability to control the drug's price, a benefit of being a drug's exclusive supplier. International trade rules allow a government to issue a compulsory license to manufacture a generic version of a drug only in case of a national public health emergency.




[APPARENTLY UNDER THAI LAW, AS CALLED FOR BY HEALTH ACTIVISTS WHO LOBBIED TO REMOVE THE NEW FDA ADMINISTRATOR, DRUG INNOVATORS THAT DARE TO EXERCISE THEIR PATENT RIGHTS IN THAILAND ARE AUTOMATICALLY DEEMED ILLEGAL MONOPOLISTS. IN OTHER WORDS, A PATENT HOLDER'S EXERCISE OF THE EXCLUSIVE RIGHT TO SELL, DISTRIBUTE AND IMPORT A NEWLY PATENTED DRUG THAT HAS NO COMPETITOR IN THE MARKETPLACE, PROVIDES AMPLE BASIS FOR THE THAI GOVERNMENT TO DECLARE THAT A 'PUBLIC INTEREST' HAS BEEN VIOLATED. CONSEQUENTLY, THE THAI GOVERNMENT, PROMPTED BY ACTIVISTS BELIEVES IT IS PERMITTED TO 'TAKE' IT AWAY FROM THE PATENT OWNER VIA ISSUANCE OF A COMPULSORY LICENSE !!]




Siriwat was the architect of the government's policy leading to the issuing of compulsory licenses on Jan. 4 for four cancer-fighting drugs.


In the past two years, the Thai government has also issued compulsory licenses for several drugs used to treat AIDS and heart disease, drawing criticism from companies holding patents on the drugs.


The drug companies dispute whether the circumstances in Thailand qualify for such licenses.


Newly appointed Public Health Minister Chaiya Sasomsup said Monday the ministry will review the licensing policy on the cancer-fighting drugs, while ensuring patients have affordable access to the medicines.


[AT WHOSE COST, THAT OF THE DRUG COMPANIES?? ARE PATENT HOLDERS, AS A MATTER OF INTERNATIONAL POLICY, NOW RESPONSIBLE FOR FUNDING GOVERNMENTS' PUBLIC HEALTH CARE PROMISES??? WHY DOESN'T THE GOVERNMENT JUST TAKE OVER THE PHARMACEUTICAL BUSINESS & ELIMINATE FREE ENTERPRISE ALTOGETHER??]



He said that if negotiations fail to get drug companies to lower their prices, compulsory licensing would be maintained.


Chaiya earlier said the government planned to review the drug licensing policy because U.S. drug manufacturers might ask Washington to apply trade sanctions against Thailand.


The four drugs issued compulsory licenses on Jan. 4 are Novartis' Imatinib and Letrozole, Sanofi-Aventis' Docetaxel, and Roche's Erlotinib.


Novartis AG and Roche Holding AG are Swiss, and Sanofi-Aventis SA is French.

Wednesday, February 20, 2008

KEI Activists Try to Promote Anti-Patent Populism to Prod Politically-Motivated Patent Reforms Reminiscent of Prior Poor Policy Proposals

The following 1886 New York Times Op-Ed was disseminated by James Love of the George Soros-Funded Activist Organization, Knowledge Ecology International (KEI), in an Effort to Persuade US Policymakers & Congressional Representatives How the US Patent System is Broken and Needs to Be Replaced. Sadly, This Effort is Not Only Misguided But also Dangerous to Future U.S. Global Economic & Technological Competitiveness.


The article below is actually demonstrative of the historical ebbs and flows of U.S. patent policy during the late 19th and 20th centuries, as is reflected in additional information provided by the ITSSD following this article.


In the 19th Century, the New York Times on a number of occasions reported and editorialized on various proposals at radical reform of patent laws, including this automatic licensing [COMPULSORY LICENSING] proposal in 1886.


"PATENT LAW AMENDMENTS." The New York Times, February 11, 1886.


Representative Dunn, of Arkansas, introduced in the House on Monday a bill to prevent the establishment of monopolies under the patent laws of the United States. Section 4,884 of the Revised Statutes gives the inventor a complete monopoly of his invention. It provides that, in addition to a description of the invention, every patent shall contain "a grant to the patentee, his heirs or assigns, for the term of seventeen years, of the exclusive right to make, use and vend the invention or discovery throughout the United States and the Territories thereof." Mr. Dunn's bill amends this section by declaring that the grant to the inventor shall be, as now, for seventeen years, but instead of an exclusive and entire property in the invention, it shall cover "a royalty of 10 per centum of all gross sales of the right to make, use, and vend the same throughout the United States." Any person, it is further provided, shall have the right to make, use, and vend the patented article upon payment of the 10 per cent royalty to the patentee or his heirs or assigns.


The principle of Mr. Dunn's bill is sound and its purpose is commendable. It is obvious that some amendment of the bill would be necessary, for patented inventions vary so widely in respect to their cost of construction, the extent of the public demand for them, and the expense of putting them on the market, that a 10 per cent royalty would in many cases be a very insufficient return to the patentee for his expenditures of time, labor, money, and brains. The effect of such a law would be to discourage invention, and that would be a worse evil than the tendency to monopoly which the bill aims to check. The problem is too complicated to be solved in that simple way, but there is not the slightest doubt that a just and workable amendment to the patent laws can be drawn up which would prevent the use of the grants of the Patent Office as a foundation for greedy and oppressive monopolies.


It is high time that the interests of the people as against those of patentees received some consideration and protection. The spirit of the time is hostile to monopolies, and justly so. It is hard enough for the public to bear the exactions of corporate monopolies which have no other warrant than a charter granted under State laws and no protection save that accorded them by bribed legislators and lenient Judges. But that the great seal of the United States should be allowed to confer a license for unlimited extortion is a monstrous wrong. The doctrine that a corporation may demand "what the traffic will bear" is held to be outrageous and wicked. Yet letters patent of the United States at present grant to patentees an absolutely unrestricted right to apply this doctrine to the sale and use of their inventions. Surely there is somewhere a just limit to the profit which a patentee may be permitted to exact from the public under his grant from the Government, a limit which would yield him the due reward of his genius and insure him a full and generous return for his toil and outlay, and yet would protect the people to whom his devices were a necessity from that boundless avarice which experience has shown is often fostered in the favoring and secure shelter of a patent. Such a restriction would not discourage inventors, and it would have the salutary effect of making useful inventions more widely available.


There is one form of extortion under the patent laws, and it is the most common one which ought to be made impossible. The best example of this kind of legalized pillage is furnished by the Bell Telephone Company. That company, protected by a patent whose validity is strenuously disputed, exacts and annual rent of $14 from the local companies for telephone instruments which cost $3.42. That is the whole case in a nutshell of robbery by royalty. As a consequence of this 350 per cent profit and of its great revenues from the local companies, whose stock it holds to the face value of $22,000,000, the capital stock of the Bell Company, according to the statement of Boston newspapers, has been "watered" to seven times its original amount, and still the dividends are 17 per cent upon the enormously inflated capital. No such monopoly as that ought to exist by the sanction of the Government.


There should be most assuredly a well defined limit to extortion in the form of rent or royalty upon patented machines and devices. And the privilege of exacting royalties is one which should never be accorded save with reasonable safeguards. It ought not to be possible for a patentee to exact his own price with no alternative to the user. The latter should have the option of purchase outright in lieu of royalty or rent paid at stated periods; and the permissible royalty or rent would naturally become the basis of the purchase price. A patentee ought to be content to sell his machine or device at a fair price, and the user ought to have the right of absolute ownership in it if he chooses to remunerate the patentee in that way.


James Love, Knowledge Ecology International (KEI)


**********************************************************************************
It is no surprise that U.S. government treatment of patents, copyrights & trade secrets has long been influenced by concerns and fears about economic downturns.


“A Brief History of the Patent Law of the United States”


According to at least legal commentator,


“[D]ifferent attitudes...have prevailed at [] different times and...have had...effects on...the...development of [] patent law...In the last two decades of the nineteenth century there was a period of economic depression and increasing concern about the power of "big business" leading to the passage of the Sherman Antitrust Act in 1890. This climate was reflected in the patent field by an increasing tendency of the courts to hold patents invalid. By the late 1890's the depression had run its course and patents came back into favor with the reviving economy. In general the twentieth century has seen a dynamic interrelationship between the patent system and the application of antitrust laws. Although the first antitrust law, the Sherman Act, was enacted in 1890, the courts did not start to give it teeth until Theodore Roosevelt’s administration (1901-1909). It was not until the 1930's that the patent system started to come under attack, being viewed as assisting in the maintenance of monopolies that were seen as being at least a contributing factor to the economic misery of the thirties. This skepticism about the patent system survived World War II and blossomed again in the depressed economic conditions of the 1970's, a period of strong anti-trust enforcement...In the early 1980's, the thinking of the Chicago School of economists came to the fore and with the election of President Reagan enthusiasm for antitrust enforcement went out of fashion.” (Ladas & Perry, LLP – 2003)



Source: Rediscovering the Value of Intellectual Property Rights, Presented at The 20th Liberty Forum Of Instituto de Estudos Empresariais - iee “Property Rights and Development”, ‘IP in the 21st Century: Challenges & Concerns’, in Porto Alegre, Brazil
April 17, 2007, accessible at: http://www.itssd.org/ppt/IPinthe21stCentury.ppt .

Friday, January 25, 2008

KEI Anti-Patent Activist Praises Thailand For Planning to Issue 4 Cancer Drug Compulsory Licenses

http://www.bangkokpost.com/News/25Jan2008_news15.php


[Thai] Government approves four cancer drugs: Compulsory licensing a must, says Mongkol


January 25, 2008


Bangkok Post


APIRADEE TREERUTKUARKUL


The outgoing military-appointed government will go ahead with the implementation of compulsory licensing (CL) for four cancer drugs, Public Health Minister Mongkol Na Songkhla said yesterday. The minister did not disclose the names of the drugs listed for compulsory licensing, simply saying the decision had been made on Jan 4 following a proposal submitted by the sub-panel chaired by Government Pharmaceutical Organisation (GPO) board chairman Vichai Chokewiwat.


The Vichai [VICHY] panel has advised the public health minister to issue compulsory licences for the breast cancer drug Letrozole and the leukaemia drug Imatinib, both produced by Novartis, the breast and lung cancer drug Docetaxel, produced by Sanofi-Aventis, and lung cancer drug Erlotinib, made by Roche.


The objective is to seek cheaper generic forms of the drugs for treating patients under the universal healthcare scheme, thereby saving the government huge sums of money.


Dr Mongkol said he had thoroughly considered the pros and cons of applying CL to such cancer drugs.


''We would not do it if it's not necessary. But we don't have time for more negotiation. We did the best we can,'' he said, adding that health officials had met patent owners for at least 13 rounds of negotiations over prices without making any significant progress.


The minister said he was certain that generic versions of cancer drugs would be of high quality and that patients under the universal healthcare scheme would receive the best benefits from the state policy on CL.


Letters stating the necessity to bypass patents of cancer drugs would be sent to all sectors involved _ the GPO, the Department of Intellectual Property and pharmaceutical companies owning the patents to the drugs by next week as he would soon finish his term, he said.


''I have faced pressure from several sides by making such a decision, but I am happy that poor patients will not go bankrupt due to the cost of cancer treatment,'' he said.


Cancer ranks as the number one cause of death in Thailand. The male population suffers mostly from lung cancer, whereas breast cancer is the major cause of death among women.


Meanwhile, pharmaceutical giant Sanofi-Aventis has threatened legal action against an India-based generic drug maker chosen to supply Thailand with a generic version of the heart drug Plavix.


Withit Artavatkun, managing director of the GPO board, said the threat was the latest in a series of attempts by the patent owner of Plavix to interrupt the country's CL policy.


Plavix, a blood thinner, is used to treat coronary artery, peripheral vascular and cerebrovascular diseases.


''Sanofi-Aventis' threat will not affect the procurement agreement as the first batch of two million heart drug tablets will be arriving by next week,'' said Dr Withit.


The India-based Zydus Cadila firm was chosen ahead of the other potential supplier Emcure Pharmaceuticals, also based in India, because Emcure had not yet provided bioequivalent documents essential for a registration grant from the Food and Drug Administration.


However, Dr Withit believed a threat from the patent owner was one of the main reasons that delayed Emcure's decision to supply a copycat version of the heart drug to Thailand.


The company last year also sent a letter to Emcure, claiming that selling generic versions of the medicine to Thailand was illegal as the country had not made public its decision to override the patent.


However, the GPO managing director said the ministry had officially declared its policy on the compulsory licensing of Plavix for over a year.

Wednesday, January 16, 2008

European Commission Hands 110th Congressional Majority & Presidential Contenders a New Political Issue - Bashing Private Intellectual Property Rights

The following article demonstrates indirectly how the ‘failure to work’ doctrine in international intellectual property (patent) law has been squeezed down from 4 years under the Paris Convention for the Protection of Industrial Property (Patents) to practically zero years, and then used as a justification by governments to declare a compulsory license if there is found to be a ‘lack of adequate competition’.

Pursuant to Article 5 of the Paris Convention, the ‘failure to work’ doctrine essentially affords each member country “the right to take legislative measures providing for the grant of compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent”.

However, within the European Union, it appears that a company’s indigenously (internally) developed know-how (as opposed to know-how and technologies acquired by means of merger & acquisition), especially in the healthcare or information technology sectors, is deemed to be a ‘public’ good – or in the international context, a ‘global public good’ (GPG).


Consequently, if the medical or healthcare-related knowledge or technology is unique in the marketplace without peer, and the holders of the patents to such know-how or technologies impose conditions for licensing or refuse to license the patent altogether, the EU Commission’s Antitrust Directorate is empowered to deem (i.e., to invoke a legal presumption of 'monopoly' against) the holders of the patents to such know-how or technology as operating an illegal ‘monopoly’. This makes it easier for governments to recommend the use of antitrust remedies to ‘break’ the monopoly via the issuance of compulsory licenses even though there is NO predatory behavior by the company and NO unreasonable contractual or market behavior by U.S. legal standards.

Emerging country governments, such as the Government of Brazil, are now basing their policies of ‘universal access to healthcare’ and ‘universal access to knowledge’ (A2K) on this approach to patents law. Such approach has also been embraced by many Majority members of the 110th United States Congress.



EU Probes Pharmaceutical Industry
On Dwindling New Patents, Drugs

http://online.wsj.com/article/SB120048256196094295.html?mod=hpp_us_whats_news

The Wall Street Journal Europe


By CHARLES FORELLE
January 16, 2008 9:17 a.m.

BRUSSELS -- European Union investigators raided drug companies in several countries as the bloc's antitrust watchdog launched a wide investigation of potentially anticompetitive practices in the industry.

Neelie Kroes, the EU antitrust chief, said the industry-wide inquiry would examine whether large companies are abusing their market power to prevent competitors from bringing new drugs to market, or whether companies were colluding to restrain competition. [THIS AMOUNTS TO A 'WITCH HUNT' – CORPORATE CITIZENS IN CONTINENTAL EUROPE ARE DEEMED ‘GUILTY’ UNTIL PROVEN ‘INNOCENT’ – PRECISELY THE OPPOSITE SITUATION IN AMERICA DUE TO THE U.S. CONSTITUTION]


AstraZeneca PLC, GlaxoSmithKline PLC, Sanofi-Aventis SA, and Pfizer Inc. said they were among the companies contacted, although the commission did not name the companies searched Tuesday and early Wednesday, nor where they were located.

The EU's so-called sector inquiries are broad-brush examinations; they don't necessarily lead regulators to bring antitrust cases, but can result in substantial fines. Recent sector inquiries have focused on energy markets and payment-card systems. Both eventually resulted in antitrust action -- most recently in the EU's declaring unlawful a type of interbank fee set by MasterCard.

Mrs. Kroes cited figures indicating that the number of new drugs launched annually has declined from an average of 40 in the late 1990s to 28 between 2000 and 2004. "The pharmaceutical markets are not working as well as they might," she said. [THIS IS ANOTHER ‘MARKET FAILURE’ WHICH THE EU REGULATORS WISH TO ‘CORRECT’ THROUGH GOVERNMENT INTERVENTION/REGULATION ANATHEMA TO EXCLUSIVE PRIVATE PROPERTY RIGHTS]

The pharmaceutical sector inquiry seems likely to reanimate a debate about the intersection of competition policy and patent law. EU officials say one concern is that companies are "misusing" patent laws to block new drugs made by rivals. Such misuse might entail overbroad patent filings or specious lawsuits. The officials say that if the companies in question are "dominant," then any abusive behavior falls under their jurisdiction as a violation of EU monopoly rules.[THERE DOES NOT NEED TO BE REALLY AN ‘ILLICIT’ ACTIVITY – JUST THE MERE PRESENCE OF INNOVATION LEADERSHIP AND NO DESIRE TO LICENSE THE TECHNOLOGY...]

Another potential violation is more straightforward -- collusion between companies, for instance, agreeing not to enter each other's markets, or taking payment not to launch a competing drug. [THIS IS A LEGITIMATE ‘CONCERN’ IN THOSE INSTANCES WHERE IT CAN BE DEMONSTRATED BY CLEAR & CONVINCING EVIDENCE]

The EU has taken on alleged patent abuses before. In 2005, the Commission fined AstraZeneca €60 million ($89 million) for trying to block generic-drug makers from coming out with versions of its blockbuster ulcer drug Losec. The Commission said AstraZeneca gave "misleading" information to national patent offices that led them to wrongly extend the company's patents on Losec. AstraZeneca has appealed the case.

Under EU regulations, commission officials can raid the premises of businesses operating in Europe, whether or not they are European companies.

The EU began the sector inquiry with unannounced inspections -- triggering the first ones within hours of the commission's decision Wednesday to authorize the inquiry. In earlier sector inquiries, EU officials had begun more politely, with requests for information.

--Dow Jones Newswires contributed to this article.