Wednesday, October 04, 2006

FTAs and Public Health

The US and Dominican Republic have just missed the 1 October deadline for implementing the Central American Free Trade Agreement (CAFTA). US officials have rejected the most recent draft of the Dominican Republic implementation of the Agreement, on the grounds that the patent laws are insufficient.

Judit Rius Sanjuan, Staff Attorney for the Consumer Project on Technology (CPTech) has reported that according to government and private sector sources, more time is needed to negotiate issues on pharmaceutical patents (as well as other concerns, such as textile rules of origin). An informal extension to 1 November is now believed to be in place, although this is also unlikely to be met.

One of the areas of negotiation in the CAFTA is the protection to be provided by the Dominican Republic for data generated by drug originators for the purposes of marketing approval. Such data indicates the efficacy and safety of the drug, and is important for determining equivalence for generics subsequently entering the market. However, the protection would protect the data under "data exclusivity" provisions in the Agreement. Without marketing approval, a drug cannot enter the market (time on the market therefore running "against the clock" of the patent protection). The CAFTA requires participants to provide 5 years of data exclusivity from the date a pharmaceutical product is submitted for marketing approval (for agricultural chemicals, the period is even longer, at 10 years). These provisions would give originators somewhat extended protection against generics over and above that provided by patent protection, in what is arguably anti-competitive and contrary to innovation in drug development.

Another concern in the agreement is the relationship between patents and marketing approvals. In response to issues surrounding the implementation of the Agreement in Chile, the Pharmaceutical Research and Manufacturers of America (PhRMA) has argued that Chile is giving marketing approval to drugs that are copies of products still under patent. As a result, the United States Trade Representative (USTR) has commenced a Special 301 Out-of-Cycle Review of Chile to monitor its progress on intellectual property protection, citing as a major concern ongoing issues around data exclusivity and the protection of test data submitted by pharmaceutical companies during the approval process.

A recent debate in the Financial Times raises concerns about the impact of free trade deals on competition in the generic drugs market. The article, "Patent or patient?" by Alan Beattie, Andrew Jack, and Amy Kazmin, describes the congressional mandate and "fast-track" trade promotion authority behind "a US drive to strengthen patent enforcement and intellectual property rights protection around the world - a campaign backed by some of the powerful drugs companies." Noting the opposition from public health specialists, campaigners, and developing countries, the article questions the argument that patent protection will bolster innovation.

The authors consider the bilateral negotiations with Thailand and the similar requirements on data exclusivity in the Thailand agreement. In the article, the Deputy Director of Research and Development at Thailand's Government Pharmaceutical Organisation (GPO), Achara Eksaengsri, thinks the bilateral terms would have a highly detrimental impact on public health, particularly in treating HIV/AIDS.

Also in the article, Pedro Chequer, former head of Brazil's national AIDS programme, describes "intense lobbying" and "threats of direct retaliation" when Brazil declared it would issue a compulsory licence to produce Kaletra, a second-line AIDS treatment. Bilateral negotiations may weaken these flexibilities current available.

In a letter to the FT, responding to the article, Kathleen Jaeger, President and CEO of the Generic Pharmaceutical Association (GPhA), says, "The FTAs are establishing a lopsided global system of pharmaceutical IP rights." She goes on to say that this limits generic competition not only overseas, but also in the United States: "The USTR must not leave our healthcare system vulnerable to prolonged brand drug monopolies."

Meanwhile, in Europe, Peter Mandelson, Commissioner for External Trade, has rejected the proposal from Angela Merkel, German Chancellor, for a free-trade area between the EU and the United States. Mandelson argued that such a deal would "trigger an outcry" from the rest of the world.

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