An Unhealthy Trade Policy

Multinational Monitor, January-February 1997 | Go to article overview
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An Unhealthy Trade Policy

We "don't work for" consumers in Argentina or Africa, and we "don't care" about public health issues there.

That was how Joseph Papovich, deputy assistant U.S. Trade Representative for intellectual property, responded to a suggestion in July from a group of consumer activists that the U.S. Trade Representatives should treat patent policy for pharmaceuticals as a public health issue.

Unfortunately, U.S. Trade Representative-designate Charlene Barshefsky demonstrated in January that Papovich's cruel and callous comment reflects official policy. On January 15, Barshefsky announced that the Clinton administration will impose sanctions on $260 million of Argentine imports as punishment for Argentina's policy on protection of health registration data.

The sanctions announcement is the latest and most serious in a long line of decisions in which the U.S. Trade Representative has treated important public health matters as narrow trade questions. Working as a virtual arm of the Pharmaceutical Research and Manufacturers Association (PhRMA) the U.S. pharmaceutical trade association, USTR regularly subordinates the public health and consumer interests of citizens in other countries to the narrow mercantile interests of the U.S. pharmaceutical industry.

The basis for the sanctions is a U.S. demand that Argentina provide greater protection to safety data submitted by pharmaceutical companies. Currently, Argentina permits a generic manufacturer to rely on safety tests conducted by another drug company. Under U.S. law, for a five-year period, only the company that conducted the safety tests is permitted to use the test data. The USTR wants Argentina to adopt a U.S.-style law.

The U.S. position would effectively extend the market power of some pharmaceutical patent holders beyond the expiration of their patent. More frequently, it would confer market power on other pharmaceutical makers who have conducted tests on unpatented drugs, including government-developed drugs for which patents are not, and should not be, available.

Hypothetically, a second drug producer could conduct the same tests as the initial tester - but this would amount to the most unnecessary and socially wasteful testing imaginable, conferring no public benefit, and cause pointless delays in introducing competition.

Whether or not a second producer willing to conduct tests emerges, consumers will pay more. Either the initial tester maintains a monopoly, or consumers must pay for the second, duplicative round of tests.

In a poor country such as Argentina, these are not only consumer price concerns. Even more than in the United States, in developing countries such as Argentina, price bilking is not just an economic issue, but a public health matter.

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