TRIPS plus FTAs

Rohit Malpani

Oxfam America

Public health consequences of TRIPS plus FTAs

• Prospective studies on FTAs with TRIPS plus provisions– US – Colombia FTA: By 2020, the Colombian health

system would pay an additional 940 million per year to cover the cost of medicines.

– US-Peru FTA: Prices for medicines would rise 9.6% in the first year, 100 percent in 10 years, and 162% in 18 years.

– US-Thailand FTA: Restricted use of compulsory licensing would mean an additional 3.2 billion spent on HIV and AIDS treatment program over 20 years.

Measuring consequences of FTAs that have already been enacted

• US-Jordan FTA

– USTR says:

– Since 2000, there have been 32 innovative product launches in Jordan, a substantial increase in the rate of approval of innovative drugs, helping facilitate Jordanian consumers’ access to medicines.

– The Jordanian drug industry has begun to develop its own innovative medicines. This is an example of how strong IP protection can bring substantial benefits to developing countries.

Oxfam study in Jordan (still incomplete)

• Basic findings:– Jordanian law now includes linkage, data

exclusivity, broad subject matter patentability, restricted use of compulsory licensing, DE for new uses (3 years)

– FDI: Only 3 manufacturers have licensing agreements with foreign firms and most were signed long before the US-Jordan FTA in 2001. (More lawsuits than new licensing agreements)

Oxfam Jordan study

• 95% of drugs produced by Jordanian manufacturers are generic, 5% are under-patent drugs produced via licensing agmts.

• Other FDI only consists of scientific offices engaged in marketing activities – no FDI for manufacturing.

• By comparison – Egypt has received 223 million USD (40% by foreign-based research companies)

Oxfam Jordan study

• Local production as % total consumption: 40.75% (1999) to 26% (2003)

• Imports: 102.9 JDM (1999) to 202.4 (2005)• 18 medicines received addition DE for new uses

(up to June 2006)• In 2002, new products with no generic

equivalents captured 3% of market. By 2006, new products captured 9.25%.

• 2002 (local sales of patented medicines) = 2.9 million USD; first 2 quarters 2006 – 14.4 million dollars

Oxfam Jordan study

• Top 26 drugs in U.S. (blockbusters) – only 9 available in Jordan.

• Of 5 largest U.S. companies – of 82 products, only 33 registered in Jordan.

• No innovative medicines developed in Jordan – only exporting off-patent medicines.

• Researcher needs to identify medicines for which generic launch delayed due to TRIPS plus rules and compare with prices in Egypt (if generic version available).

Other consequences of FTAs

• Chile out-of-cycle review and injunctions sought by U.S. and Swiss companies

• Implementation of TRIPS plus rules in CAFTA countries.

• Side letters – support or deride? Some Dems seem to think side letters are sufficient to address public health concerns.

Side letters

• Legal basis of side letters – not an ‘integral part’ of the agreement – only an ‘understanding’ and only for limited public health concerns anyways.

• “shall constitute an agreement” – only in Morocco FTA – others do not contain this language

Ideas…

• Prescription drug prices in the U.S. and linking to prices of medicines in other countries.

• Leahy Bill – Life Saving Medicines Export Act

• GAO report (Kennedy-Waxman) and TPA