The Great Unequalizer
The Pandemic Is Compounding Disparities in Income, Wealth, and Opportunity
Intellectual property protections for medicines are often overlooked in public discussions of U.S. trade agreements. But they shouldn’t be. Negotiations over such intellectual property can mean the difference between antiretroviral medicine that costs over $10,000 per year—the price originally set in the 1990s by monopoly patent holders—and the eventual grudging concessions that dropped the drug prices to less than a dollar a day. For millions of HIV-positive people in the developing world, that price gap is a matter of life and death. The same dynamic applies to patients in need of medicines to treat cancer, heart disease, and any number of other health conditions.
Here’s what usually happens: the U.S. trade representative, acting in concert with pharmaceutical companies, proposes extensive patent protections for medicines and daunting barriers that delay generic alternatives from entering markets. Patient-focused civil society organizations, especially those connected to low- and middle-income countries, vigorously object. In the end, though, the prospective U.S. trading partners, looking ahead to increased access to coveted U.S. markets, usually agree to terms that elevate intellectual property rights and restrict affordable access to medicines.
At first glance, the Trans-Pacific Partnership looks to be traveling down this same path. If the agreement is finalized as expected at a late July meeting in Hawaii, the TPP would be largest regional trade agreement in history. The TPP’s 12 member nations, the economies of which make up nearly 40 percent of global GDP, have conducted their talks in secret, with no terms officially announced. But leaked draft texts show that the United States is again pushing provisions that would permit new patents for minor revisions of old medicines, a process known as “evergreening,” and create delays in getting generic alternatives to market by restricting access to clinical test data for patented medicines, a process known as “data exclusivity.”
Other U.S.-drafted TPP terms include patent linkage, which can allow spurious patent filings to delay generic market entry. Further, a proposed investor-state dispute settlement system would allow pharmaceutical corporations to force a government into arbitration over decisions that would reduce the price of medicines. A similar process has served as the platform for corporate challenges to the Canadian government’s invalidation of drug patents, antismoking regulations in Australia and Uruguay, and an environmental court ruling in Ecuador. In short, the United States is extending patent holders’ monopoly over medicines and, in turn, ensuring higher medicine prices.
Leaks of the draft intellectual property chapter of the TPP confirm that the U.S. proposals to extend medicine monopolies have been met with staunch opposition from nearly all of the other participating nations, with the occasional exception of Japan.These proposals have attracted criticism. In a 2013 statement, Peru’s trade minister noted that the intellectual property terms elevate the interests of U.S. corporations over the needs of Peruvian citizens, calling for the country to “not go one millimeter beyond what was already negotiated” on intellectual property issues in past agreements. The Australian government, meanwhile, has insisted that no TPP terms are acceptable if they undermine the country’s popular pharmaceutical price control program. In a 2013 statement, the Malaysian prime minister condemned any trade agreement restrictions on his government’s efforts to provide affordable medicine because it would “impinge on fundamentally the sovereign right of the country to make regulation and policy.” The announcements are all the more notable given that they came from high-level government officials rather than the fringes of civil society.
Such pronouncements, and similar concerns expressed by current or former officials in Canada, Chile, Singapore, and New Zealand, are the public reflection of the dynamic that is playing out even more intensely in the private TPP negotiations. Leaks of the draft intellectual property chapter of the TPP—and reports from multiple people familiar with the five-plus years of negotiations—confirm that the U.S. proposals to extend medicine monopolies have been met with staunch opposition from nearly all of the other participating nations, with the occasional exception of Japan. As Politico has reported, as of May 11, 2015, the draft chapter was a 90-page document “cluttered with objections from other TPP nations” to U.S.-drafted protections for pharmaceutical companies.
In part, the officials are just reflecting long-standing popular opinion. Ever since the legendary AIDS treatment struggles of the early 2000s, when South African and Brazilian grass-roots AIDS treatment advocates successfully pressured their governments to resist U.S. and pharmaceutical challenges to generic drug distribution, civil societies around the world have launched vigorous campaigns demanding that their leaders not bargain away access to affordable medicines. On the eve of U.S. President Barack Obama’s visit to Malaysia in April 2014, 21 health organizations released a joint statement of concern about the TPP, with the message that affordable medicines are a matter of life and death for cancer and AIDS patients, among others. During the visit, Obama and Malaysian Prime Minister Najib Razak faced enough TPP-themed protests in Kuala Lumpur that they felt compelled to address the concerns in a joint press conference. “We have made so much noise about this,” Fifa Rahman of the Malaysian AIDS Council told me, “I don’t think the TPP issues would have gotten the attention here without civil society pressure.”
The good news is that the TPP’s critics have some strength in numbers and could help strengthen the resolve of those looking to ease U.S. intellectual property controls in the final talks.The opposition to TPP’s intellectual property terms has been so pronounced in part because other countries believe that the United States is pushing for greater protections than it ever has before. “Some of the TPP terms being proposed by the U.S. go further in their demands for patent protection than any previous trade agreement has ever seen,” says Judit Rius Sanjuan of Médecins Sans Frontières. “There is an attempt here to set up norms to be used much more broadly after this agreement.” Multiple United Nations health officials have also recently sounded the alarm about trade agreements’ potential to handcuff governments’ ability to pursue public health initiatives. Groups such as Médecins Sans Frontières, Oxfam, and Public Citizen are particularly worried that the historic TPP agreement could serve as the benchmark for future deals.
The scope of the TPP and the Obama administration’s push for historic levels of intellectual property protection at the TPP negotiating table, including extensive periods of market exclusivity for patented biologic drugs, has even inspired some U.S.-based economists, elected officials, and nongovernmental organizations to lend their voices to the opposition. The powerful AARP, formerly the American Association of Retired Persons, is among them. It argues that TPP terms, such as the barrier to generic alternatives to biologic drugs, could limit future efforts to control domestic drug costs in programs such as Medicare and Medicaid. Other groups cite a 2007 agreement between Congress and the George W. Bush administration designed to limit the negative public health impacts of U.S. trade deals as evidence for why the TPP should not be approved.
The good news is that the TPP’s critics have some strength in numbers and could help strengthen the resolve of those looking to ease U.S. intellectual property controls in the final talks, leading to an agreement that protects access to affordable medicines, or at least minimizes the potential damage. Some even harbor hopes of scuttling the agreement altogether. There is some precedent for that outcome: the proposed Free Trade Area of the Americas (FTAA) collapsed after similar disputes about intellectual property terms, the vigorous opposition of the economically strong Brazil, and the public exposure of the once secret draft.
But the TPP talks have progressed much further than the FTAA ever did, and the intellectual property chapter is just one of 29 in the TPP. This month’s final talks will lump together patent discussions with negotiations on issues such as agriculture and textile and footwear exports, leaving objections to U.S. intellectual property terms vulnerable to political tradeoffs. We can only hope that those pushing for the protection of access to medicine will be able to hold out for a decent bargain for those in need.