Global Trends by Martin Khor

Monday 28 August 2006

Free trade treaties vs patient’s lives

Last week, there were conflicting messages were coming out in the media on free trade agreements.  The Asean economic ministers’ meeting in Kuala Lumpur announced an Asean-United States framework agreement.  But development and patients’ groups at the global AIDS Conference in Toronto attacked free trade agreements with the United States for preventing people from getting affordable medicines.


A significant event at the Asean economic ministers’ meeting in Kuala Lumpur last week was their signing of a framework agreement on trade and investment with the United States.

That is a “non-binding” agreement, according to reports.  However Malaysia and Thailand are negotiating full-blown legally binding free trade agreements (FTAs) with the US.

There were hopes from both the American and Malaysian Trade Ministers to conclude their bilateral treaty by the end of the year.

Meanwhile, half way round the world, the FTAs that the US has signed or is negotiating with developing countries were getting bad publicity.

At the world AIDS Conference in Toronto, the FTAS were blasted for raising the prices of medicines and preventing those infected with HIV-AIDS and other diseases including malaria, TB and cancer from getting treatment.

The FTAs signed by the US tighten patent laws to such a degree that its partners will find it near impossible to access the much cheaper versions produced by generic companies, according to a statement by leading NGOs such as Medicins Sans Frontieres, Oxfam and groups representing patients.

While original AIDS drugs cost over US$10,000 per patient a year, the prices by Indian generic companies allowed treatment for only US$150 a year.

A ‘government use” order issued by the Malaysian government enabled the Health Ministry to cut costs of treating AIDS patients to one seventh, thus allowing seven times more patients to be treated for the same budget.

While the World Trade Organisation allows countries to import or produce generic drugs (sometimes through a government-issued “compulsory license” or “government use order”), the FTAs with the US shuts out or restricts such measures through many provisions, such as restricting the use of compulsory licences.

Under a “data exclusivity” clause, the US demands that companies or government agencies desiring to register a generic drug cannot make use of the original company’s clinical trial and safety data already screened by the health authorities, even if it can be shown that the generic and original drugs are identical in composition.

The result: generic drugs will not get safety approval and thus cannot be marketed to patients, even if the government has issued a compulsory license, and even if the drugs are not under patent in the country.

The Financial Times last week strongly criticized “US insistence in bilateral trade talks that developing countries agree to stiffer patent protection rules.

“As well as restricting competition, the rules would most critically set tighter conditions on poor countries’ freedom to use compulsory licenses to override patents and import essential medicines they cannot produce locally…

“United Nations members have pledged to ensure poor nations’ access to affordable essential medicines…Better ways to honour that pledge must be found.  Trade bullying of the weak by the strong is not one of them.”

At home, the Malaysian AIDS patients group, MTAAG (Positive Malaysian Access and Advocacy Treatment Group), last week said in a statement that FTAs are a “death sentence for people living with HIV/AIDS.”

It said the Malaysian Government issued a government use licence to import some generic ARVs from India and the monthly cost of government treatment fell by 81% from US$315 to US$58, increasing the number of people that can be treated by the Ministry of Health from 1500 people to 4000 people.

”But this is still very much below the more than 10,000 AIDS cases that need urgent treatment, and the import licence has also come to an end,” said the MTAAG.

It remarked that many provisions expected in the FTA with the US Malaysia are “very alarming” and if Malaysia adopts this obligation, it will be prevented from importing much needed affordable generic ARVs as it was able to do in 2003.

”For people living with HIV-AIDS in Malaysia and elsewhere, provisions such as these are a death sentence.”

The group called on the government not to succumb to the pressures of the US, and called on the US government to rethink and change its policy of pressuring other governments.

The Federation of Malaysian Manufacturers last week also expressed concern on the US demands in the FTA, saying there is no additional benefit to Malaysia to extend patent laws beyond what the WTO requires.

The FMM president Datuk Yong Poh Kon said if patents are extended beyond the WTO rules, manufacturers would face difficulty to produce generic drugs, and there would also be a “dangerous position” with regard to software patents.

The worldwide and local concerns over patents is only one of the controversies surrounding FTAs with the US and also other countries.

Others issues include investment rules, and the opening up of goods, services and the government procurement business.