Magazine article Foreign Policy in Focus

Problems with Current U.S. Policy

Magazine article Foreign Policy in Focus

Problems with Current U.S. Policy

Article excerpt

Key Problems

* If the U.S.-Jordan Free Trade Agreement serves as a model, the FTAA will sharply limit the grounds for issuance of a compulsory license.

* The U.S. negotiating objectives for the FTAA inappropriately seek to link marketing approval to patent status.

* The U.S. is attempting in the FTAA negotiations to extend patent terms and create new intellectual property protections that will undermine Latin American and Caribbean country efforts to promote access to affordable medicines.

It is not possible to know exactly what the U.S. is advocating in FTAA negotiations because Washington has only released a summary of its negotiating objectives. Draft FTAA texts remain secret. However, the U.S. summary proposals, along with the recently completed U.S.-Jordan free trade agreement (FTA), provide some insight into the positions for which Washington is lobbying. These include both the basic framework of the WTO's Trade-Related Aspects of Intellectual Property (TRIPS) and a series of ill-advised "TRIPS-plus" measures, which would require countries to adopt intellectual property rules that extend or grant new monopolistic patent and intellectual property claims and diminish the public's rights regarding intellectual property.

Perhaps the most worrisome U.S. initiative would directly limit the grounds for compulsory licensing. Under the U.S.-Jordan FTA, compulsory licenses to achieve a public health aim--even in case of a national emergency--can only be granted to "government entities or legal entities operating under the authority of a government." Under the more permissive TRIPS arrangement, by contrast, compulsory licenses could as a matter of course be granted to private parties for commercial, nonpublic use, so long as TRIPS procedures and rules, including payment of reasonable compensation to the patent holder, are obeyed. TRIPS contemplates compulsory licensing as part of the basic schema of the intellectual property system, not as a limited exception.

If the U.S.-Jordan FTA provisions are adopted as part of the FTAA, it would still be permissible for Argentina, say, to issue a compulsory license to procure lower-priced AIDS or cancer drugs for its public health service. But it would not be possible for a private Argentine drug company to obtain a compulsory license to make lower-priced AIDS or cancer drugs available generally on the market. The narrowing of scope for compulsory licensing would tend to make governments less certain about their authority to use this critical public health tool and more worried about facing domestic lawsuits from industry if they do attempt compulsory licensing--thus inhibiting action to advance public health interests.

A second troubling proposal contained in the U.S. summary of its negotiating objectives for the FTAA would link marketing approval for a drug--based on a finding of safety and efficacy (or bioequivalence to a safe and efficacious product) granted by U.S. Food and Drug Administration (FDA)-equivalent agencies--to patent expiration. Under the U.S. proposal, unless they were sure there were no patent claims on a drug, FDA-equivalent agencies could not grant marketing approval to generics.

There should be no linkage between marketing approval and patent term. If a generic company markets an on-patent drug without license, under TRIPS, the patent holder has adequate remedy under the law. …

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