Free and Public

The EC is still trading away access to medicines By Leïla Bodeux, Policy Officer, Oxfam-Solidarité

Today, 29 September, Cecilia Malmström will be auditioned by the European Parliament (EP) to confirm if she is to become the European Commission’s (EC) new Trade Commissioner. This is a very timely moment for the release of a joint paper by Oxfam and Health Action International Europe (HAI) on the impact of European Union (EU) trade policies on access to medicines, both in Europe and far beyond.

Stakes are high for Ms. Maelstrom who will be leading the EC Directorate-General for Trade’s (DG-Trade) agenda for the next five years. This will include negotiating Free Trade Agreements (FTAs) with other countries on behalf of EU Members States. She will be especially in the spotlight over the negotiation of the controversial FTA between the EU and the US that will affect millions of people: the Transatlantic Trade and Investment Partnership (TTIP).

Profits before patients in TTIP?

Leaked documents clearly show that the TTIP is a huge threat to European public health systems, due to its clear favouring of pharmaceutical companies’ commercial interests. One objective of the Pharmaceutical lobby is patent harmonization based on US law. This would mean more patents and less generic competition, thus more monopolies and unaffordable medicines. Another item on Pharma’s negotiating wish list is a ‘voice’ in EU Member States’ pricing and reimbursement policies. Increased companies’ voice in medicine would challenge Member states’ ability to take measures, such as price control, to control expenditure on medicines. Moreover, the Pharma lobby is seeking to restrict public access to clinical trials data, undermining the EU’s recent efforts to foster transparency in this area[1].

One of the TTIP’s most controversial elements is the inclusion of an Investor-State Dispute Settlement (ISDS) mechanism. ISDS gives foreign investors the right to sue governments for compensation if laws, policies, court decisions or other actions interfere with expected profits from investments. Governments’ actions such as price control or patentability standards could be challenged in court. While it may seem extreme, this threat is far from hypothetical. Following the legitimate invalidation of two of its patents, the American pharmaceutical company Eli Lilly is suing Canada for 500 million Canadian dollars compensation under the North American Free Trade Agreement  ISDS provision.

More worryingly still, the impact of the TTIP will not stop at EU or US borders. The TTIP would set a new global standard for strict intellectual property (IP) protection around the world, which could be imposed on developing countries through other trade deals[2].

FTAs have regularly been used by DG-Trade to introduce strict investment and IP rules (so-called “TRIPS-plus” measures), which go beyond the internationally-agreed IP standards set by the World Trade Organization. Such standards promote the commercial interests of the pharmaceutical industry even at the expense of public health. (See the EC’s latest document on the pharmaceutical industry).

The EC’s brand new strategy on IP enforcement in third countries explicitly describes IP as a means to boost Research and Development (R&D) and economic growth in the EU, ignoring how IP can also hinder innovation and competition. The proposed measures to enhance the enforcement of IP rights include FTAs and the identification of “priority countries”, as per the notorious US Special 301 report[3]. The EU list includes India and Thailand, two countries which have sought to balance IP rules and public health needs. The list foresees possible financial sanctions for countries repeatedly “infringing” IP rights. Sanctions could include restricting third countries’ participation in, or funding from, specific EU-funded programmes.

The EU’s “black sheep” on IP in trade policies

India and Thailand have bitter experiences of the EC heavy-handed approach to IP rights. Negotiations for a FTA between the EC and India started in 2009 and are currently on hold. India’s progressive IP law only grants patents for ”real” innovation (i.e. it rejects patents on products too similar to an existing product). This has allowed the country’s vibrant generic pharmaceutical sector to play an important role in driving the prices of medicines down in developing countries. As “the pharmacy of the developing world”, India provides over 80 percent of the world’s generic anti-retroviral medicines to treat HIV/AIDS. The EC’s attempt to impose TRIPs-plus provisions in the EU-India FTA caused a great outcry throughout the world, thankfully forcing the EC to backtrack on some of the most controversial provisions.

Yet, despite the EC’s commitment to stop pushing for TRIPS-plus measures in subsequent FTAs, the FTA being negotiated with Thailand since March 2013 (also currently on hold due to the military coup) contained similar controversial provisions. Instead of supporting Thailand’s good track record of pro-public health policies and its use of TRIPs flexibilities[4] to improve access to medicines, the EC tried to stop Thailand’s use of these legal, internationally-agreed measures.

Negotiations with both countries will resume in the near future.

Are IP rights really promoting health-driven innovation?

DG Trade – aligned with the pharmaceutical industry- portrays IP as the panacea to boost investments in R&D, thus justifying the inclusion of TRIPs-plus provisions in FTAs. However, it is clear that the current R&D system, which relies heavily on the profits generated by expensive, unaffordable medicines to provide incentives for innovation, fails to meet public health needs.

The current Ebola crisis and the controversy surrounding wildly unaffordable new medicines to treat Hepatitis C, clearly illustrate the R&D crisis. No medicines or vaccines are currently available to deal with the Ebola virus due to the lack of a market incentive; Ebola only affects some of the world’s poorest countries, where no company could ever make a profit. In the meantime, the pharmaceutical company Gilead priced its new and highly-effective medicine to treat Hepatitis C (marketed as Sovaldi) at $84,000 for a 12-week course. Even the discounted price that Gilead offered to some countries is still too high to treat all patients[5].

This raises serious questions about a system based on monopoly that keeps effective medicines from reaching the people that need them. Clearly alternative R&D models which are geared to address health needs must urgently be explored.

Change is needed, now!

The coming five years represent an   important opportunity for the EU to lead on trade and R&D policies which meet health needs, and which don’t favour commercial interests over patients’ needs.

Oxfam and HAI Europe urge the future Trade Commissioner Cecilia Maelstrom, to resist the pharmaceutical lobby and to ensure trade policies are aligned with the EU’s development and (global) health objectives. To reach this aim, DG Trade should ensure better coherence and coordination of work with other DGs. The newly elected parliament must ensure that EU trade and R&D policies prioritise access to medicines for all citizens around the world.

More concretely, the EC should:

  • Stop including TRIPS-plus and investment protection measures in FTAs which jeopardise access to medicines for millions, including in its negotiations with the US, India and Thailand;
  • Support generic competition to allow broad access to medical products in Low- and Middle-Income countries; and
  • Support new models of innovation, both those under development at the World Health Organisation, and in its own programmes.

References


[1] For a detailed analysis, see: Commons Network, HAI et al. (2014) ‘The Trans Atlantic Trade and Investment Partnership (TTIP): A Civil Society response to the Big Pharma Wish list’, joint position paper, http://www.prescrire.org/Docu/DOCSEUROPE/20140324CivilSocietyResponseBigPharmaWishList_final.pdf

[2] C. Gerstetter, M. Mehling, A. Eberle and K. Salès (2013) ‘Legal implications of the EU-US trade and investment partnership (TTIP) for the Acquis Communautaire and the ENVI relevant sectors that could be addressed during negotiations’, EP Directorate General for Internal Policies, http://www.europarl.europa.eu/RegData/etudes/etudes/join/2013/507492/IPOL-ENVI_ET(2013)507492_EN.pdf

[3] See USTR website: http://www.ustr.gov/about-us/press-office/press-releases/2014/April/USTR-Releases-Annual-Special-301-Report-on-Intellectual-Property-Rights

[4] In 2001, the WTO ministerial conference adopted the Doha Declaration on TRIPS and Public Health. It affirms that the WTO rules on IP should not prevent countries from taking measures to protect public health.

Doha Ministerial Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/DEC/W/2, 14 November 2001, http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm

[5] http://www.globalhealthcheck.org/?p=1630

 

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