US offer on LDC transition period “indefensible”, say NGOs

Civil society groups have slammed as inadequate a US proposal for a 10-year waiver from intellectual property protection for pharmaceuticals in the world’s least developed countries, saying the waiver should instead be in force for as long as these countries remain LDCs.

by Sangeeta Shashikant

LONDON: The United States’ offer to the least developed countries (LDCs) of a 10-year transition period to grant pharmaceutical patents is “unconscionable and indefensible”, according to six influential US non-governmental organizations (NGOs).

In a letter dated 19 October to US President Barack Obama, the NGOs conveyed this strong criticism in view of the public health and other developmental challenges facing the LDCs.

The letter states, “We fail to understand why the US, alone, continues to oppose LDCs’ demand – a legally sound and justified request for a pharmaceutical transition period for as long as they remain LDCs.”

The letter also calls the US position “egregious” as “the LDC markets are of no significant financial value” and “the US is an important donor and member of the international community that is active in various LDCs in supporting HIV treatment programmes as well as initiatives such as the Global Fund; hence the US administration is a major beneficiary of the LDCs’ request”.

The letter – signed by Oxfam America, Health GAP, Knowledge Ecology International (KEI), the Union for Affordable Cancer Treatment (UACT), the Young Professionals Chronic Disease Network (YP-CDN) and Public Citizen – strongly urged the US to “express its full and unconditional support” for the LDCs’ requested duration.

On 16 October, the US had offered a meagre 10-year pharmaceutical transition period to the LDCs at the WTO. This took place at the meeting of the WTO Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS) held on 15-16 October in Geneva.

The offer was made during informal meetings between the US Ambassador Michael Punke and ambassadors representing the LDC Group in the WTO: Ambassador M. Shameem Ahsan from Bangladesh, Ambassador Deepak Dhital from Nepal and Ambassador Christopher Onyanga Aparr from Uganda.

According to trade diplomats, the LDC ambassadors rejected the US offer.

The impasse between the US and the LDC Group led to the suspension of the TRIPS Council meeting by the acting Council chair, Ambassador Alfredo Suescum from Panama.

Meetings planned on 19 October had to be cancelled as US Ambassador Punke, who is personally handling this matter, was still consulting with Washington for further instruction.

In the absence of Punke, the LDC matter will not make any headway, informed sources say.

Earlier this year, the LDC Group had submitted, as required by Article 66.1 of the WTO’s TRIPS Agreement, a “duly motivated request” seeking an extension of the pharmaceutical transition period for as long as a country remains an LDC. The Group’s request is aimed at extending the pharmaceutical transition period granted by paragraph 7 of the WTO’s 2001 Doha Declaration on the TRIPS Agreement and Public Health. The transition period comes to an end this year.

(Article 66.1 of the TRIPS Agreement states: “The Council for TRIPS shall, upon duly motivated request by a least-developed country Member, accord extensions of this period.” Paragraph 7 of the Doha Declaration on the TRIPS Agreement and Public Health states: “We also agree that the least-developed country Members will not be obliged, with respect to pharmaceutical products, to implement or apply Sections 5 and 7 of Part II of the TRIPS Agreement or to enforce rights provided for under these Sections until 1 January 2016, without prejudice to the right of least-developed country Members to seek other extensions of the transition periods as provided for in Article 66.1 of the TRIPS Agreement.” The TRIPS Council has formally adopted paragraph 7 of the Doha Declaration.)

At the June 2015 TRIPS Council session, the LDC Group defended its request, arguing that the classification of LDCs is contingent on a number of key human development indicators including levels of poverty, literacy, infant mortality and economic vulnerability determined by the United Nations. It also presented statistics showing the poor economic performance of LDCs, their widespread poverty and the massive public health challenges that prevail in LDCs.

The LDC Group further presented evidence of the successful use of paragraph 7 of the Doha Declaration by LDCs such as Sierra Leone, Djibouti and Zambia to facilitate importation of affordable medicines and to speed up the supply of such medicines, stressing also that the paragraph 7 mechanism is known as “one of the most successful provisions” of the Doha Declaration.

The US remains the only country vehemently opposing the LDCs’ request for a pharmaceutical exemption until a country ceases to be an LDC. The European Union and other WTO members are willing to accept the LDCs’ demands.

The United Nations (including WHO, UNDP, UNAIDS, UNITAID), the Vatican, and multiple US Senators and Representatives have also expressed unequivocal support for a pharmaceutical transition period linked to the graduation status of LDCs.

The most vulnerable

The NGO letter states that LDCs are the most vulnerable and poorest segment of the international community and the majority of the LDCs are in the Sub-Saharan region. They are characterized by low per capita income, low level of human development and economic vulnerability, in addition to inherent geographical and environmental constraints.

The letter quotes the UN which states that more than 70% of the LDC population live on less than $2 per day and an estimated 252 million people live with hunger. It also refers to World Bank data from 2014 which reports that only 36% of LDCs have access to improved sanitation facilities while 68% have access to an improved drinking water source and as of 2012, two-thirds of people in LDCs lacked access to electricity.

In 2014, per capita gross national income for LDCs was $915, compared to $55,200 for the US, the letter further states, adding that LDCs’ productive capacity is highly limited and they have severe infrastructure deficit and are also at the bottom of technology development.

The letter refers to natural calamities that LDCs face, such as the recent earthquake in Nepal, which further worsen their living conditions and add to the development challenges in these countries. Many LDCs are also challenged by violence, war, conflict and political instability, symptomatic also of poverty, inequalities and social injustices.

“These countries also suffer enormous health burdens, both of communicable and non-communicable diseases. Recently, the Ebola crisis plagued Sierra Leone, Guinea and Liberia; all LDCs,” stressed the joint letter.

Defending the LDCs’ requested duration, Jamie Love of Knowledge Ecology International, a signatory to the letter, argues that “LDC countries will not amend their patent law for a temporary waiver of the WTO rules. Right now, many LDC countries have ignored the laws on the books, because of the temporary waiver, for drugs to treat HIV/AIDS, often encouraged by those involved in delivering affordable drugs, who are working with tight budgets. But this is not sustainable.

“NGOs providing services and donors both have been threatened by patent holders with lawsuits for inducing infringement of patents, and the global norms for enforcing patents are becoming more strict, and cross-border in nature. A permanent waiver for LDCs will lead to model law waivers for drug patents, and give countries the incentive, stability and technical assistance they need to ensure that they have access to generic medicines.”

Rohit Malpani, Director of Policy and Analysis at Medecins Sans Frontieres Access Campaign, in supporting the LDCs’ demand, states, “We work in over half of the world’s countries that are classified as least-developed, and our medical teams know all too well the impact of medicines and vaccines being priced out of reach.” “If the world’s poorest countries are forced to introduce patents on medicines prematurely, prices on life-saving drugs will rise and millions of people will be treading the fine line between staying alive and dying.”

 “Cynical posturing”

Brook Baker of Health GAP said: “The US is offering a miserly 10-year extension of LDCs’ freedom from pharmaceutical monopolies not because the poorest countries in the world are profit centres for Big Pharma and Big Bio but to make a political point and to tell a big lie. The political point is that they will always go to bat for the multinational bio-pharmaceutical empire (even though US companies routinely avoid paying US taxes by exporting profits to tax-havens in Ireland and elsewhere). The big lie is that pharmaceutical monopolies are good medicine for even the weakest economies, a tenet of pharmaceutical fundamentalism disproven by all available economic evidence. Ten years is simply not long enough.

“Nothing of substance will change in LDCs concerning their need for more affordable generic medicines while they remain LDCs. Nothing substantial will change about their need to accelerate technological capacity in the pharmaceutical sector. Ten years does not give certainty – instead it creates a pall of uncertainty. Ten years is insufficient to motivate legislative enactment of the pharmaceutical extension in the majority of LDCs that have not adopted it thus far. It is certainly insufficient to motivate generics to set up shop in LDCs. The ten-year demand by the US is cynical posturing without principle at its worst and threatens the health of one billion people living with inadequate health care in LDCs.”

Stephanie Burgos, Economic Justice Policy Manager at Oxfam America, said: “US government opposition to the reasonable request by the world’s poorest countries for a permanent waiver from applying global intellectual property rules is unconscionable. It runs counter to the Obama Administration’s commitment to support country-led development and puts the US on the wrong side of history in efforts to improve global health through access to medicines for all.” (SUNS8117)        

Third World Economics, Issue No. 601/602, 16 September -15 October 2015, pp8-10