Weighs the public health risks of globalization
Levinson, Mark
SUCCESSIVE U.S. governments have relied on a simple catechism: the World Trade Organization equals free trade, which equals development. With this rationale the nation has been led into...
...The fact that pharmaceutical corporations typically spend more than twice as much on marketing as they do on research and development raises questions about how much of the revenue from patents actually finds its way into socially beneficial research...
...With this rationale the nation has been led into regional (NAFTA) and international (WTO) trade agreements...
...TRIPS is subject to certain public interest safeguards and exceptions, which some observers (mainly the drug companies and their apologists) regard as adequate...
...The opportunistic element in this case derives from the fact that Barshefsky saw her job as carrying out the agenda of those who benefited from not examining too closely the reality that treats them so well...
...Countries such as Brazil, India, Thailand, and Egypt succeeded not just in reducing their dependence on imported medicines, but also in developing their capacity to produce and export the same medicines...
...To oppose this kind of globalization is not to oppose globalization itself...
...Other predictions are worse...
...As I write in early August, the press reports that two top staff from the U.S...
...The Clinton administration threatened Thailand and the Dominican Republic with trade sanctions because these countries were allowing the importation of cheap drugs...
...If a country violates TRIPS, a complex DISSENT / Fall 2001 n 5 BRAVE NEW GLOBE and costly WTO dispute mechanism can be triggered...
...The potential penalty for noncompliance is trade sanctions against the offending country...
...Highly sophisticated generic industries emerged with a specialization in the development of low-cost equivalents of expensive patented medicines for low-income populations...
...The reasons for these premature deaths are various— poor nutrition, inadequate water and sanitation, poor health infrastructure—but limited access to life-savings drugs is an important one...
...New York Times globalization cheerleader Thomas Friedman, in a rare moment of balanced analysis, captured what the debate on globalization should be about: "[Globalization] has both empowering and enriching features and disempowering and impoverishing features, and it all depends on how you manage it...
...Trade Representative's office have resigned and are going to the pharmaceutical industry lobbying arm, Pharmaceutical Research and Manufacturers of America...
...Before the WTO was established, most developing countries avoided stringent patent regimes on medicines in the interests of public health...
...In 1999, in Africa, if deaths had occurred at the much lower European or North American rates, more than 1.5 million fewer Africans would have died of AIDS...
...policymakers now claim ignorance...
...Public health is a stark example...
...This is best illustrated by the HIV/AIDS crisis...
...An estimated thirty-six million people worldwide live with HIV—twenty-five million in Africa alone...
...In the treaty governing the proposed Free Trade Area of the Americas , for example, the administration is pushing to include patent protection of more than twenty years and to incorporate even tighter restrictions than under TRIPS...
...governments have relied on a simple catechism: the World Trade Organization equals free trade, which equals development...
...Meanwhile, at the New York Times, Thomas Friedman, bellwether for fashionable opinion about globalization, has been silent (not one column...
...DISSENT / Fall 2001 n 7...
...A remarkable statement...
...Despite the public outrage, one should not underestimate the power of the pharmaceutical industry...
...But what matters is not the fact that drugs are costly to develop, but the rate of return on investment...
...Higher prices will restrict access to these important drugs and deepen the health divide between rich and poor countries...
...Diseases that are under control in the developed world cause millions of premature deaths in the developing world...
...The industry also tends to gloss over the existence of public funding for the development of products patented by private companies...
...Friedman is not much help in answering the question he posed...
...The pharmaceutical industry achieved some of the highest profit margins in the corporate world before the new TRIPS regime...
...Entire African nations are on the verge of collapse because teachers, military personnel, doctors, health care professionals, and civil servants are dying of AIDS...
...Affordability is one of the factors restricting access, and patent protection is a key factor influencing affordability...
...These drugs are typically available at prices ranging from one-fifth to one-tenth of those for patented name products...
...on one of the urgent issues of our times: global trade rules, written by and for the pharmaceutical industry, that are contributing to the deaths of millions...
...trade representative during the Clinton administrations...
...But this therapy costs about $10,000 per year for the drugs alone...
...The pharmaceutical industry's main argument for patents is that they are necessary to finance research and development...
...These four countries have strong generic industries, which not only provide low-cost competition in domestic markets, but also export low-cost generic drugs to third world countries...
...The growing international concern about the public health implications of the TRIPS agreement has lead to what UN Secretary General Kofi Annan described as "a world wide revolt of public opinion...
...When confronted with the implications of the policies they designed and carried out, U.S...
...Pharmaceutical corporations and some industrializedcountry governments, especially the United States, have pressured developing countries not to invoke even these limited safeguards...
...So how are we managing globalization...
...The problem is that TRIPS has moved beyond the proper function of patents— providing reasonable rewards to inventors—to creating long-term monopolies in developing countries...
...I didn't appreciate at all the extent to which our interpretation of South Africa's international property obligations were draconian...
...Under the WTO rules, which took effect in 1995, all 142 WTO member states (and any future new members) are required to grant at least twenty-year patent protection (called Trade-Related Aspects of Intellectual Property Rights [TRIPS]) in all fields of technology, including drugs...
...Across sub-Saharan Africa, most medicines used in the treatment of infectious diseases are imported from generic drug suppliers...
...Products affected include many anti-HIV drugs and drugs for malaria, tuberculosis, and all of the other preventable or treatable diseases...
...Public money in Europe and the United States developed the drugs, but the huge profits go to private companies that now exercise those patents exclusively...
...TRIPS forces countries to relinquish their right to produce or import lowcost generic copies of otherwise patented drugs...
...Because generic-drug makers are able to market products at a fraction of the costs associated with patented brands, they provide a lifeline for low-income households...
...But millions of people around the world see it differently...
...In the two most publicized cases, the 6 n DISSENT / Fall 2001 pharmaceutical industry sued South Africa when it amended its law to allow compulsory licensing of essential medicines, and the United States complained to the WTO about Brazil's lack of enforcement of patents...
...The mortality rate for the roughly four hundred thousand people with AIDS who live mainly in Europe and North America and who have access to patented anti-retroviral therapy has dropped by more than 70 percent...
...The pharmaceutical industry has also maintained a sophisticated lobbying campaign directed against countries that it regards as a special threat, notably India, Egypt, Argentina, and Brazil...
...We all missed it," says Charlene Barshefsky, the U.S...
...For example, the majority of anti-retrovirals, whose patents are now exclusively exercised by big pharmaceutical companies, were the result of research that was largely publicly funded...
...He has been too busy attacking those who question how globalization is being managed to shed much light on the issue himself...
...From both a political and moral perspective, this is an outrage...
...Many developing countries chose to use this freedom to exempt drugs from patenting or to grant only limited protection (for example...
...Yet HIV is a treatable chronic disease...
...Until 1995, every country, in framing its patent regime, was free to strike its own balance between encouraging innovation and maximizing the availability of affordable medicines to its populace...
...If you think globalization is all good or all bad, you don't get it...
...Meanwhile tens of millions of people alive today and untold millions tomorrow will die of a treatable infectious disease, largely because patent protection makes drugs unaffordable...
...Operating profit in the industry is typically in the range of 20 percent to 23 percent, which sug BRAVE NEW GLOBE gests that weak patent regimes in developing countries have not, thus far, had an adverse effect on profitability...
...And the Bush administration, heavily backed by PHARMA, continues to support strong patent protections...
...Gunnar Myrdal once said, "Ignorance is seldom random, but instead highly opportunistic...
...But the safeguards are ambiguous and difficult to administer—especially because of the threat of legal challenge and the use of the WTO dispute procedures...
...Nineteen million people have died of AIDS, and 5.4 million are newly infected every year...
...Some estimates suggest that half a billion people will be infected with HIV by the year 2020...
...F F XCEPT FOR THE limited cases where safeguard provisions can be utilized successfully, the new trade rules will delay the introduction of generics into the market...
...Indeed, many of today's rich countries did not grant patent protection during earlier stages of their development, choosing to wait first for the emergence of local pharmaceutical industries before enforcing patents in their own markets...
...These so-called "free trade" agreements are in fact systems of protectionist rules—protecting the property of global investors while weakening the rights of governments to protect their workers, their public health, and their environment...
...One of the main reasons is a group of WTO patent protection laws that have had a substantial impact on the price of drugs within the developing world where people's need for drugs is great and their ability to pay is not...
...a maximum of five years or patents on processes but not products), thereby allowing low-price generic versions of new products to enter the market within a few years of launch of the original product...
...In fact, his silence is not unusual for supporters of the corporate version of globalization...
...Taxpayers and publicly funded institutions often play a key role in new discoveries with the pharmaceutical industry obtaining the patent and reaping the financial rewards...
...The WTO agreement on intellectual property rights threatens to cut that lifeline...
...For those corporations who are protected, globalization is being managed just fine...
...The inevitable effect in many poor countries will be higher prices for essential medicines...
...Both actions were withdrawn after worldwide campaigns and media criticism...
...MARK LEVINSON is the director of Research and Policy at the Union of Needletrades, Industrial and Textile Employees (UNITE...
Vol. 48 • September 2001 • No. 4
