Dying for Drugs: How CAFTA Will Undermine Access to Essential Medicines

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THERE ARE ROUGHLY 44 MILLION PEOPLE in the Central American countries of Guatemala, Honduras, Nicaragua, El Salvador and Costa Rica, plus the Dominican Republic. Their per capita income ranges from $370 a year in Nicaragua to $1,750 in Guatemala to more than $4,000 in Costa Rica.

The corporate members of the U.S. Pharmaceuticals Research and Manufacturers of America (PhRMA) look at Central America and see a market to conquer.

U.S. drug companies presently export about $50 million worth of drugs a year to the Central America and the Dominican Republic.

With adoption of the U.S.-Central America Free Trade Agreement (CAFTA), which includes the five Central American countries, plus a U.S.-Dominican Republic deal that is being "docked" on to CAFTA, the drug companies think they can make more.

According to Renard Aron, assistant vice president for Latin America and Canada at PhRMA, that's due in part to the tariff provisions of the agreement, which would bring down tariffs on imported pharmaceuticals--and enable the brand-name drug companies to raise their prices commensurately.

But most important to PhRMA is the intellectual property provisions of CAFTA.

"A higher level of intellectual property protection ... is important to the research-based pharmaceutical industry," Aron told the U.S. International Trade Commission at an April hearing.

"We look forward to every government in the region to implement the Agreement in a transparent and timely fashion, ensuring the applicability of strong and enforceable rights established by the Agreement."

Things look different to public health groups.

They say PhRMA should leave the poor Central American countries alone, without demanding the imposition of heightened intellectual property rules to extend and expand brand-name drug company monopolies.

CAFTA's patent and other intellectual property, rules will, they say, delay generic competition and artificially raise the price of drugs, with the result that Central Americans will be denied medicines they need to treat illnesses, including life-threatening diseases.

"CAFTA negotiators have given in to U.S. pressure and failed their people by agreeing to measures that place profits above people's lives," says Rachel Cohen, U.S. director of the Campaign for Access to Essential Medicines of the international medical humanitarian organization Doctors Without Borders/Medecins Sans Frontieres (MSF).


It is beyond dispute that the introduction of generic competition lowers price dramatically and enables broadened access to needed medicine. The very purpose of patent monopolies is to enable patent holders to collect supracompetitive profits, as a reward and incentive for innovation. There is now several decades experience in the United States illustrating the price reductions from generic competition.

And, several years into the international campaign for access to essential medicines, generic competition has brought down the price of lifesaving antiretrovirals used to treat people with HIV/MDS by more than 98 percent. Generic firms from India now offer triple-drug MDS cocktails for as little as $140 a year. A few years ago, the brand-name companies sold the same products for $10,000 a year or more in poor countries. Prodded by generic competition and activist campaigns, the brand-name companies have dropped their prices significantly, but the lowest brand-name prices for MDS drugs remain roughly four times the cost of the cheapest generic option. (Both the generics and brand-name companies decline to make their biggest discount prices available in Central America, which is not as poor as sub-Saharan Africa.)

Under the rules of the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (WTO's TRIPS), countries are required to provide 20-year patent protections for all products, including pharmaceuticals. …