WTO Executive General Council Delays Decision on Access to Generic Drugs Agreement

The World Trade Organization's executive body early today decided to delay a decision on a compromise agreement that would give poor nations access to generic drugs, the Philadelphia Inquirer reports (Philadelphia Inquirer, 8/29). WTO talks over generic drug access have been stalled since members missed a Dec. 31, 2002, deadline to reach an agreement. U.S. negotiators in February refused to sign a deal under the Doha declaration to allow developing nations to override patent protections to produce or import generic versions of drugs to combat public health epidemics, including HIV/AIDS, unless wording was included to specify which diseases constitute a public health epidemic. However, the United States in June made a concession by dropping its demand that the agreement apply only to a specified list of diseases (Kaiser Daily HIV/AIDS Report, 8/28). Yesterday, trade envoys said that a deal had been secured at a closed-door meeting of the WTO Council for Trade-Related Aspects of Intellectual Property Rights, the chief negotiating body on the drug access issue, which includes all 146 WTO member countries. However, the accord still requires approval from the General Council, on which the same 146 countries sit (Philadelphia Inquirer, 8/29). Approval last night at the General Council was delayed after representatives from the Philippines and Argentina requested to add statements to the agreement prior to the final vote (Miller/Fuhrmans, Wall Street Journal, 8/29). The WTO has called another meeting for later today, but WTO spokesperson Keith Rockwell said that it is now "very unlikely" that a decision will be reached prior to a meeting of the trade ministers in Cancun, Mexico, which is scheduled to begin Sept. 10 (Koppel, AP/Newport News Daily Press, 8/29).

Proposed Text
The compromise reached by the United States, Brazil, India, Kenya and South Africa on Wednesday would leave intact the text discussed in December but would add a three-page "chairman's statement," delineating how the patent concessions could be used (Kaiser Daily HIV/AIDS Report, 8/28). The original agreement would allow a country to issue a "compulsory license" to import generic drugs if it confirms that it "has insufficient or no manufacturing capacities in the pharmaceutical sector for the product(s) in question." The chairman's statement that was negotiated this week and agreed upon in the TRIPS meeting recognizes that the system "should be used in the good faith to protect public health and ... not be an instrument to pursue industrial or commercial policy objectives." In addition, the statement says that "all reasonable measures," such as the use of special packaging and different drug coloring, should be made to prevent the reimportation of generic drugs into wealthy countries. Developed countries also have agreed to refrain from using the patent concessions, and the 10 countries joining the European Union next year will opt out upon joining. Some of the richest developing countries -- including Israel, Mexico, South Korea, Singapore, Qatar, United Arab Emirates and Hong Kong -- also would agree to use the measure only "in situations of national emergency or other circumstances of extreme urgency" (Associated Press, 8/28).

Opposition
The successful negotiations among the United States, India and Brazil -- which have large generic pharmaceutical industries in the world -- and Kenya and South Africa -- which have a great need for the drugs -- were seen as a "key sign" that a full agreement on the issue was "close," Bloomberg/Washington Post reports. However, the Philippines and other countries made objections at the meeting of the executive General Council, Rockwell said. The Philippines argued that its companies should not have to sacrifice commercial profitability in order to assist developing nations, according to Bloomberg/Post. Humanitarian concerns are "not necessarily exclusive of industrial or commercial objectives," an official statement from the Philippines said (Giles/Drajem, Bloomberg/Washington Post, 8/29). In addition, some developing countries said they would accept the agreement only if they were assured that the measures required to prevent drug smuggling would not impact the price of the drugs or make it more difficult for the countries to obtain them. Other countries said that the agreement is supposed to be seen as a "short-term fix for a few years," according to the AP/Daily Press. Also, some countries said that they wanted to work to include the agreement in the WTO's treaty on intellectual property rights, according to the AP/Daily Press (AP/Newport News Daily Press, 8/29).

Reaction
"Obviously this is deeply disappointing. This is an issue on which all of us wanted to see agreement," Rockwell said, adding, "But in a consensus-based organization, making decisions is a difficult undertaking. All of the members have said they will continue to work on this" (AP/Newport News Daily Press, 8/29). Faizel Ismail, chief negotiator for South Africa, said that reaching an agreement is "extremely important" for African countries that need access to affordable antiretroviral drugs but cannot produce the drugs themselves (AP/Houston Chronicle, 8/29). Officials from the U.S. pharmaceutical industry said that they were "pleased" with the deal but that they could offer no more specific comment until the entire WTO reaches a consensus, according to the New York Times (Becker, New York Times, 8/29). Some health advocacy groups have said that passage of the proposed text would be a "disaster," according to the Inquirer. Celine Charveriat, head of advocacy for Oxfam, said, "This would be a travesty of an agreement that would no doubt be presented as a wonderful thing for development." She added, "The text contains so much red tape and so many obstacles that if it were accepted, developing countries would still struggle to get access to cheap medicines" (Philadelphia Inquirer, 8/29). Kenyan health advocates yesterday accused the United States of "bullying" poor countries into accepting the agreement, Reuters/New York Times reports. The advocates expressed concerns that measures to prevent reimportation of drugs would lead to price increases due to the added cost of different packaging and that costly delays would be created by clauses requiring countries to prove that they could not manufacture the drugs themselves (Reuters/New York Times, 8/28).

Editorials, Opinion Piece
The following is a summary of two editorials and an opinion piece published today that discuss the WTO trade talks:

• Financial Times: While many people would applaud the pending agreement over access to generic drugs, it is a "largely symbolic ... sideshow" to upcoming talks over agricultural liberalization, which does not "resolve the crucial public health problems" of the developing world, a Times editorial says. The agreement "will not lead to a dramatic increase in the supply of medicines to the poor" because most people still cannot afford even the least expensive generic versions of the drugs and because of the lack of health care infrastructure needed to administer them, the editorial says. In addition, the deal does not address the problem that "[w]ith or without the enforcement of patents, drugs companies have no incentive to develop medicine for those who cannot afford to pay ... and the international community should be exploring new ways to pay for the development of drugs for diseases of the poor," the Times concludes (Financial Times, 8/29).
  
  
• New York Times: "The prognosis for a lot of sick people in the world's poorest nations, and for the health of the current round of global trade talks, may soon brighten considerably" as a result of the compromise brokered by the "Bush administration's retreat from one of its more unfortunate unilateral diplomatic stances," a Times editorial says. The United States "alone" had blocked the deal on patent concessions issued last year in "deference to the concerns of the powerful pharmaceutical industry," according to the Times. If a compromise is reached, neither the pharmaceutical industry nor its "allies" in the Bush administration should seek to block its implementation, the Times concludes (New York Times, 8/29).
  
  
• John Kufuor/Yoweri Museveni, Washington Times: Reaching an agreement on patent concessions "represent[s] only a small fraction of what must be done if the Doha round is to deliver on its promise" of becoming "pro-poor and pro-development," Kufuor, president of Ghana, and Museveni, president of Uganda, write in a Washington Times opinion piece. The "real target" of the Cancun trade talks should be striking down "[o]bstacles," such as "protectionism in agriculture," a move that would make the "strongest contribution ... to alleviat[ing] the interrelated blights of poverty and disease afflicting our people," Kufuor and Museveni say (Kufour/Museveni, Washington Times, 8/29).
  

Media Coverage
The following broadcast programs reported on the WTO agreement:

BBC News: The segment includes comments from Dr. Harvey Bale, director general of the International Federation of Pharmaceutical Manufacturers Associations, and Dr. Zaccheaus Omondi of the Aga Khan Hospital in Nairobi (Robbins, BBC News, 8/29). The full segment is available online in RealPlayer.

NPR's "Morning Edition": NPR's Joanne Silberner discusses the WTO negotiations with NPR's Steve Inskeep (Silberner, "Morning Edition," NPR, 8/29). The full segment will be available online in RealPlayer after noon ET.

PRI's "Marketplace": The segment includes comments from Deborah James, global economy director of the international human rights organization Global Exchange (Ott, "Marketplace," PRI, 8/28). The full segment is available online in RealPlayer.