Waxman the Taxman Calls on USTR to Give Away US Constitutionally Protected Private Patents and Trade Secrets to Foreign Governments for Little Value

http://www.fiercepharma.com/story/dems-back-compulsory-licensing/2008-04-10


Dems back compulsory licensing


Fierce Pharma


April 10, 2008


Now Rep. Henry Waxman and 26 of his Congressional counterparts are wading into the compulsory licensing fray. They're questioning U.S. Trade Rep Susan Schwab for her downgrading of Thailand after it issued patent-breaking licenses for three drugs. Though Schwab gave various reasons for putting Thailand on the trade watch list, the reps' letter says the move appears to be a condemnation of compulsory licensing itself. So they're asking Schwab to "reaffirm" the World Trade Organization agreement that allows for those compulsory licenses in public health emergencies at each Member country's discretion.


Can you hear the howling already? As you know, compulsory licensing is controversial in the drug industry; after all, it lets countries bypass the patents on brand-name meds so they can buy cheap copycats. Drugmakers are understandably reluctant. But proponents say that otherwise, patients in poor countries might never get access to the lifesaving meds they need. It's a complex issue, and a contentious one, so you can expect the debate to intensify--especially if Congress decides to get more involved.



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http://oversight.house.gov/documents/20080409144118.pdf


Democrats Urge Trade Ambassador to Focus on Access to Medicines


Committee on Oversight and Government Reform, U.S. House of Representatives


Wednesday, April 09, 2008


In a letter to U.S. Trade Representative Schwab, Chairman Waxman and twenty-six other Members of Congress asked that in reviewing the global state of intellectual property rights the Ambassador act upon the United States’ commitment to respecting measures that improve access to live-saving medicines in developing countries.


"As you conduct the annual "Special 301" review of the global state of intellectual
property rights (IPR) protection and enforcement, we ask you to pay close attention to issues
related to public health and access to medicines. Specifically, in determining whether a public health measure raises concerns regarding the 'adequate and effective' protection of intellectual property rights, you should consider not only the extent to which greater property rights and protections could enhance innovation, but also the United States' commitment to respecting measures that improve access to life-saving medicines in developing countries.


A particular concern we have relates to the issuance of compulsory licenses for medicines. In the 2007 Special 301 Report, you downgraded Thailand to the "Priority Watch List," shortly after it issued compulsory licenses on three pharmaceutical products. The Report appeared to express concern with a perceived "lack of transparency and due process" that occurred when Thailand issued the licenses. Unfortunately, ambiguity in that language has led some to interpret the Report as condemning the issuance of compulsory licenses as inherently indicative of a weakened respect for patents.


[Indeed, Mr. Waxman was quoted in Bangkok Post as stating the following: "Rep. Henry Waxman (D-Calif.) also was supportive of Thailand's actions, according to the Post. 'Thailand is an important U.S. ally that is trying to save the lives of its citizens,' Waxman said in a statement. He added, 'Accordingly, the U.S. should show compassion and provide support to our longtime friend rather than impose punitive actions' -- such as the Office of the U.S. Trade Representative's recent announcement that the country has been put on its Priority Watch List. According to Vichai, the Thai government will continue with its plans for compulsory licenses" (Bangkok Post, 5/23/07). See "Drug Access - Thai, U.S. Officials Have Not Reached Agreement About Compulsory Licenses for Patented Drugs, Thai Health Minister Says", The Global Fund at: http://www.theglobalfund.org/programs/news_summary.aspx?newsid=49&countryid=THA&lang=ru .


[MR. WAXMAN, YOUR ACTIONS ACTUALLY ENCOURAGED THAILAND TO 'TAKE' U.S. OWNED DRUG PATENTS FOR LESS THAN FULL, COMPLETE AND ADEQUATE FAIR MARKET VALUE COMPENSATION FOR A PUBLIC USE - TO FULLFILL ITS ALLEGED HEALTH NEEDS. WILL YOU COMPENSATE THE DRUG COMPANIES FOR THEIR ECONOMIC LOSS? WE STRONGLY DOUBT IT!!]


As you know, the use of compulsory licenses, with 'adequate remuneration' paid to the patentholder, is permitted by the WTO Agreement on Trade-Related Aspects of Intellectual Property (the "TRIPS Agreement"). In the 2001 Doha Declaration, the United States and the other 142 WTO Members committed to respecting 'the right of WTO Members to use, to the full, the provisions of the TRIPS Agreement,' which provide 'flexibilities' to enable a Member 'to protect public health and, in particular, to promote access to medicines for all.' One crucial flexibility is that each Member has 'the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted.'


...In fact, TRIPS does not limit compulsory licenses to "emergencies," but rather, as discussed above, permits countries to determine when they are necessary.


[UNFORTUNATELY, MR. WAXMAN, THIS INTERPRETATION OF THE TRIPS DOHA DECLARATION IS THE MOST LIBERAL ONE POSSIBLE. ALSO, 'ADEQUATE REMUNERATION' UNDER U.S. LAW MEANS, FULL, COMPLETE COMPENSATION - FAIR MARKET VALUE UNDER U.S. LAW. IT DOESN'T MEAN ADEQUATE COMPENSATION UNDER A THIRD COUNTRY'S LAW - THAT WOULD CONSTITUTE A U.S. GOVERNMENT 'GIVE-AWAY' OF U.S. PRIVATE INTELLECTUAL PROPERTY RIGHTS IN VIOLATION OF THE U.S. CONSTITUTION.]

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http://oversight.house.gov/documents/20070312150354-57129.pdf


US Trade Policies Restrict Access to Life Saving Medicines


Committee on Oversight and Government Reform, U.S. House of Representatives


Sunday, March 11, 2007


Rep. Waxman and other members write to US Trade Representative Susan Schwab to express their concern that the US is elevating intellectual property protection at the expense of public health in recent Free Trade Agreements with Peru, Colombia and other developing countries.


"[R]ecent U.S. free trade agreements (FTAs) appear to...strip away flexibilities to which countries are entitled under... the 2001 "Doha Declaration" on the [World Trade Organization] Trade-Related Aspects of Intellectual Property Agreement (TRIPS) and public health.


...Under WTO rules, pharmaceutical innovations receive twenty years of patent protection. Recent U.S. FTAs add an additional requirement [contained in US law]: a period of "data exclusivity" that begins when a patented drug receives marketing approval. During this period, regulators cannot rely upon clinical test data submitted for a drug's first approval when considering marketing approval for generic versions. The effect can be to delay the availability of generics even if a patent has already expired.


...For any patient, five years or more without a medicine priced out of reach can be severe.
The consequences are especially serious for patients with HIVIAIDS or other chronic diseases,
where the cost of treatment can mean the difference between life and death. Colombia and Peru, parties to recently negotiated U.S. FTAs, together have more than a quarter million people
infected with HIV and alarmingly low treatment access rates.


...Compulsory licensing is the government granting of a license to a manufacturer other than the patentholder to produce a drug at an affordable price. The Doha Declaration affirmed the TRIPS principle that each WTO member country has 'the fieedom to determine the grounds upon which such licences are granted.' However, the U.S. has included provisions in FTAs to narrow these grounds. USTR has also refused to reference the right to compulsory licensing - or other public health exceptions - in the text of FTAs. Instead, USTR has relied upon the use of vaguely worded "side letters" that are subordinate to the agreements and non-binding on the parties. The letters also fail to provide clear and specific assurances affirming the ability of governments to take various measures to address public health needs.


[MR. WAXMAN, THAT IS ONLY ONE INTERPRETATION OF WHAT THE DOHA DECLARATION SAYS, AND PREDICTABLY, IT IS THE MOST LIBERAL INTERPRETATION. ESSENTIALLY, YOUR PREFERRED SOLUTION OF 'TAKING' U.S. PRIVATE PROPERTY RIGHTS TO FULFILL A FOREIGN GOVERNMENT'S 'PUBLIC USE' WITHOUT PAYMENT OF FULL, ADEQUATE AND JUST COMPENSATION, WOULD EFFECTIVELY CONSTITUTE A HIDDEN TAX ON U.S. DRUG PATENT & TRADE SECRET RIGHTS THAT WOULD SEVERELY DIMINISH THE ABILITY OF THEIR HOLDERS TO SECURE A REASONABLE RETURN ON INVESTMENT & PROFIT MARGIN, IN CONTRAVENTION OF THE U.S. CONSTITUTION.]


...The world's consensus at Doha was that all nations have the right to use the flexibilities
available under TRIPS to 'promote access to medicines for all.' Protecting innovation is
important, but the intellectual property provisions in current FTAs extend pharmaceutical monopolies without sufficient regard to consumer access and public health."


[DEAR MR. WAXMAN, YOU SEEM SO GENEROUS WITH VALUABLE PRIVATE PROPERTY THAT IS NOT YOUR OWN. UNDER YOUR INTERPRETATION, U.S. TAXPAYING DRUG PATENT & TRADE SECRET OWNERS WOULD HAVE NO SAY IN THE PRICE THAT THE U.S. PTO WOULD PAY THEM FOR THEIR INTELLECTUAL PROPERTY, WHICH WOULD SURELY BE LESS THAN FAIR MARKET VALUE. IF YOU BELIEVE THAT THE U.S. GOVERNMENT SHOULD 'TAKE' U.S. PRIVATE PROPERTY FOR A 'PUBLIC USE' IN A 3RD COUNTRY TO PROVIDE IT WITH AFFORDABLE DRUG PRICES' - i.e., PRICES THAT THEY WANT TO PAY IN THEIR MARKET, WHICH ARE PENNIES ON THE DOLLAR, THEN THE USG MUST COMPENSATE THE PROPERTY OWNER WHOLLY. OTHERWISE, THE TAKING ACTUALLY CONSTITUTES A HIDDEN TAX.]

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http://lists.essential.org/pipermail/ip-health/2005-June/008087.html


Rep. Waxman Statement on Brazilian Compulsory License Dispute


June 29, 2005


Back during 2005, Mr. Waxman expressed his disdain for U.S. private patent rights when compared to the rights of foreign governments to 'take' them for their 'public use' at less than full, adequate and just compensation.


BRAZILIAN GOVERNMENT'S DECISION TO ISSUE A COMPULSORY LICENSE FOR LOPINAVIR/RITONAVIR


[Congressional Record: June 28, 2005 (Extensions)][Page E1389-E1390]


Tuesday, June 28, 2005


HON. HENRY A. WAXMAN of california in the house of representatives


[Page 1390]


Mr. WAXMAN. Mr. Speaker, Brazil's HIV/AIDS program has been recognized by the United Nations AIDS program as one of the best in the world in both treatment and prevention.


Working alongside nonprofit organizations,the government has aggressively fought the disease by offeringuniversal antiretroviral treatment. Many of the first-line antiretroviral drugs used in Brazil are locally produced by generic companies, allowing the country to afford to treat tens of thousands of patients.


But other second-line antiretroiviral drugs like the lopinavir/ritonavir combination, efavirenz, and tenofovir have been sold by theirbrand name producers at a high cost. These three drugs alone consume70% of Brazil's AIDS budget. According to Brazilian Health MinisterHumberto Costa, the Brazilian government pays more than $2,600 annuallyper patient to purchase doses of lopinavir/ritonavir.


Some who oppose Brazil's action have claimed that it violates trade rules. In fact, the World Trade Organization's 1994 Agreement on TradeRelated Aspects of Intellectual Property specifically permits compulsory licensing. The 2001 Doha Declaration reaffirmed this option, stating, ``Each member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted.''


As a signatory of the Doha Declaration, the United States should respect the rights of other nations to address important health problems.


[THE PROBLEM HERE IS THAT THE DOHA DECLARATION IS NOT A TREATY AS IS THE WTO TRIPS AGREEMENT, WHICH GOVERNS].