Multinational Monitor

JUN 1998
VOL 19 No. 6


Dirty Old Grandfathered Plants: The Clean Air Act's Lung-Charring Loopholes
by Fred Richardson and Andrew Wheat

Wasting Away: Big Agribusiness Factory Farms Make a Big Mess
by Tanya Tolchin

Ravaging the Poor: IMF Indicted By Its Own Data
by Gabriel Kolko

An Enemy of Indigenous People: The Case of Loren Miller, COICA, the Inter-American Foundation and the Ayahuasca Plant
by Danielle Knight


Taking Aim at the Gun Makers
an interview with
David Kairys


Behind the Lines

U.S. Drug Imperialism

The Front
Emissions Omissions - Out of the Mouths of Babes

The Lawrence Summers Memorial Award

Money & Politics
Trade Association Directory

Their Masters' Voice
The Burma Lobby

Names In the News



U.S. Drug Imperialism

Operating at the behest of the Pharmaceutical Research and Manufacturers Association (PhRMA), for a decade and a half the U.S. government has waged a ruthless crusade to force Third World countries to adopt straitjacketing intellectual property rules at the expense of protecting public health.

In May, Clinton administration officials went into diplomatic overdrive to subvert an effort at the World Health Organization (WHO) to establish the common-sense principle that people should matter more than profits when it comes to access to essential drugs.

WHO's governing body, the World Health Assembly, had before it a proposal to urge countries to "ensure that public-health interests rather than commercial interests have 'primacy' in pharmaceutical and health policies."

With most of the world ready to adopt this principle, the United States balked. Effectively representing Bristol Myers Squib, Eli Lilly, Merck and the other drug kingpins, the United States suggested instead that "public health and commercial interests [be] handled in a compatible manner" -- a banal and effectively meaningless notion.

When the world moved toward a compromise that would have preserved the critical principle that public health concerns should take priority over mercantile interests, the U.S. representatives successfully engaged in underhanded parliamentary maneuvers to have the whole issue deferred indefinitely.

Strict patent rules provide extended legalized monopolies for drug companies. Drug companies say they need long monopoly periods to recoup their research and development costs. But no one genuinely disputes that monopolies raise costs to consumers and that generic competition lowers prices.

Many developing countries have pursued flexible policies designed to satisfy consumer needs for affordable drugs and to foster the creation of domestic manufacturers. So too did virtually every industrialized country at some point in their development -- many European countries only began recognizing drug patents in the 1970s.

Among the diverse pro-health patent policies which countries have maintained in recent years: compulsory licensing, which requires patent holders to license their products (typically at a profit) to competitors; shorter patent terms than the 20 years now required in international trade agreements; respect for patents on processes, but not products (meaning competitors can imitate a product if they can figure out a different way to make it); and parallel imports -- allowing distributors to buy a patented product in one country and sell it in another, to prevent patent holders from charging extra-high prices in some countries.

Countries with less strict pharmaceutical patent policies, which until recently included Canada as well as Argentina, Brazil and India, tend to have better developed domestic industries and cheaper prices -- often dramatically cheaper prices. India, which had virtually no domestic pharmaceutical manufacturers prior to 1970, saw a thriving industry evolve after adopting a more flexible patent policy that enabled domestic companies to compete with the multinationals.

In the last decade, however, the United States has successfully battled for the inclusion of strict intellectual property rules in international trade agreements such as NAFTA and the General Agreement on Tariffs and Trade (GATT). Often, the U.S. position has literally been drafted by PhRMA.

Those trade agreements disregard public health considerations and have forced dramatic changes in intellectual property rules the world over.

Still, PhRMA is not satisfied. And when PhRMA is not happy, the Office of the U.S. Trade Representative (USTR) is not happy.

In recent years, USTR has imposed trade sanctions or held out the threat of trade sanctions against numerous countries that have adopted public health measures which are permitted under relevant trade agreements. In many cases, USTR has complained vociferously about companies maintaining public health policies similar or identical to U.S. law. Argentina, South Africa, Brazil, Cyprus, Israel and many others have all felt the sting of USTR threats or sanctions.

It is time to put an end to the U.S. drug imperialism. People's lives are at stake in the pharmaceutical policy decisions that the U.S. government insists on classifying as exclusively trade related.

The United States could begin to break with its unhealthy past by agreeing to the modest principle that, at least when it comes to drug policies, public health should count more than the commercial concerns of the pharmaceutical industry.

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