WORLD TRADE ORGANISATION: Fake medicine deal to kick-start trade talks

Issue 

BY EVA CHENG

On August 30, on the eve of the September 10-14 World Trade Organisation ministerial summit in Cancun, Mexico, the US government succeeded in having the WTO issue a "breakthrough" draft agreement that it claims will allow poor countries to import cheap generic versions of life-saving medicines. In truth, the deal does little to bring cheaper drugs within reach of the Third World.

Medecins Sans Frontieres (MSF) and Oxfam issued a statement on the same day, which revealed that at least 21 WTO member-countries have voiced concern about the deal and that "they have come under tremendous pressure to adopt it".

MSF's Ellen't Hoen described the "breakthrough" as being one designed to "offer comfort to" big Western drug companies rather than help poor patients. She stressed that "global patent rules will continue to drive up the price of medicines".

Oxfam's Celine Charveriat pointed out that what has been provisionally agreed upon — to be confirmed at the Cancun meeting — is a highly burdensome system that "does nothing" to ease restrictions on the production of generic drugs. Charveriat added that underdeveloped WTO member-countries "will have little alternative to the high prices and long-term monopolies of brand-name pharmaceutical companies".

As all other areas of the WTO negotiations have gone nowhere, it is widely suspected that the medicines deal is designed to distract attention from what may turn out to be a total collapse of the negotiations at Cancun. A similar tactic was employed two years ago at the last WTO ministerial at Doha, Qatar.

Following the spectacular collapse of the WTO ministerial talks in Seattle in 1999, the rich countries, keen to ensure the Doha summit did not fail, agreed to formally affirm what most underdeveloped countries believed had been agreed to years earlier — that poor countries have the right to override drug patents and produce or import cheaper generic drugs in the event of public health emergencies.

But the rich countries, headed by the US and hand-in-hand with its powerful drug manufacturers, immediately began to undermine the commitment as it was declared.

This time around, the "breakthrough" focuses on the rights of member-countries to import generic drugs, a key issue for most Third World countries as only a handful have a drug manufacturing capability. The effort to draw up clear rules to allow such importation was agreed to last December by nearly all member-countries, but the lone objection of the US government has stalled the process for the last eight months. Meanwhile, millions more people in poor countries have died due to diseases that could have been controlled if such drugs had been available to them.

The draft agreement includes a number of conditions that will render the deal impractical, expensive and difficult to implement. These include:

  • A condition that the new arrangement must not be "an instrument to pursue industrial or commercial objectives". However, in an August 26 critique, MSF pointed out that the most affordable generic medicines are those produced by multiple firms which compete with each other. To outlaw generic drugs produced commercially will seriously restrict the possible supplies of life-saving drugs;

  • A requirement that generic drugs designated for export must be different shapes, colours and packaging from those for domestic use. The August 30 WTO statement asserts that such a requirement would not increase production costs significantly;

  • The draft demands that "only the amount necessary ... may be manufactured ... and the entirety of this production shall be exported". Moreover, before each shipment of medicines, the exporter must publicise the quantity, destination and distinguishing features of the consignment on a designated web site. These restrictions will reduce Third World manufacturers' economies of scale and increase production costs and prices;

  • WTO member-countries will have to go to great lengths to "prove" their eligibility to import essential drugs. This provides plenty of opportunities for the opposing countries to challenge the right of poor countries to import medicines;

  • Importing countries will have to "notify" the TRIPS (Trade-Related Intellectual Property Rights agreement, the rule that governs patents under the WTO) Council of the names and expected quantities of the drugs they intend to import, in addition to proving they can't produce those drugs;

  • Exporting countries will have to make a detailed report to the TRIPS Council whenever a licence for the export of generic medicines is granted;

  • WTO member-countries must take "effective legal means" to prevent imported drugs being diverted for other purpose. Whether such measures are adequate could be scrutinised by other member-countries. Complainants have the right to take matters to the TRIPS Council, which has the new power to "take appropriate action"; and

  • The TRIPS Council will gain new powers to scrutinise the working of this new system on an annual basis.

The MSF described the consequences of such elaborate barriers in its August 26 statement: "Countries must jump through a multi-layered tangle of hoops to get access to a few medicines... Any one of these hoops can easily be closed off by political pressure or economic infeasibility, rendering the system extremely vulnerable."

From Green Left Weekly, September 10, 2003.

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