In 2003, President Bush and congress passed an initiative to curtail and eventually stop the spread of HIV/AIDs around the world. The President’s Emergency Plan for AIDs Relief, better known by its acronym PEPFAR, is not only the largest program in the world attempting to bring relief to people affected by HIV/AIDs, but also the largest offensive in the history of mankind against a disease. In light of America’s recent decrease in global popularity, PEPFAR is received by the world as one of the few shining examples of American’s determined compassion, a lingering shadow of what America once offered to the world. This paper will illuminate what lurks in the shadows today: the pharmaceutical lobby’s manipulated mutations of US trade and foreign aid policy and how dangerous the idea of intellectual property as property has become.
In order to understand what is wrong we need to understand the problems and how the US is broadly attempting to solve them (specificity). Due to the exponentially growing spread of HIV/AIDs around the world, President Bush, the Evangelical community, Congress, and many other Americans worked diligently to formulate and pass a HIV/AIDs treatment program and appropriate $15 billion dollars over five years to carry out America’s part in reaching the newly agreed Millennium Development Goals (MDGs). One MDG was to have universal access to AIDs treatment by 2010. PEPFARs contribution has prevented over 200,000 infant infections, supported antiretroviral treatment for over one million people, and successfully implemented a wide range of social education and other preventative programs across 13 nations of sub-Saharan Africa and southeast Asia: the areas hardest hit by AIDs. These gains are numerically greater than even the gains made by the global fund against HIV/AIDs.
Antiretroviral treatment works almost as a temporary cure for HIV/AIDs by slowing the progression of HIV to full blown AIDs, decreasing the viral load in patients, boosting the immune system, and thus restoring strength. Decreasing viral load is of special significance because it significantly reduces the chance that HIV/AIDs will be spread through sexual contact. But it is the increase in CD4+ T cells, which for practical purposes can be considered white blood cells, that builds strength and slows progression of the disease (Chen, Hoy and Lewin). Africans are proven to adhere to the treatment regimen more than anyone else in the world which helps lengthen the time before they require second line medication. Nonetheless, the benefits of first line treatments are rarely indefinite (Outterson 32).
PEPFARs success arguably comes from both treatment and prevention, but the extent of the population receiving treatment is the only measurable means of evaluating the program. The treatment relies almost entirely on the administration of antiretroviral drugs (ARVs). These drugs allow AIDS sufferers to live fuller, longer lives, often by extending their lives by 20 to 30 years and restoring their strength to allow them to be productive members of society. This affects both those in a country who actually have the disease and those who do not. In the hardest hit countries, one does not say “he or she has AIDs” one says “we have AIDs.” Three of the professions hardest hit by AIDs are the military, healthcare workers, and teachers. One can imagine the social and economic magnitude as well as the regional instability created by AIDs as healthcare systems with poor infrastructure further collapse, limited education systems become unreliable, and weak militaries and social control create chaos (Singer). Enabling these and other professionals to live through the prime of their working life strengthens the country. Countries which have been devastated by HIV/AIDs pandemics often have additional burdens to handle as well, which are equally affected by patent law. In order to overcome these strains a country must have some of its foundational needs, such as public health, built up so that it can move forward by itself.
Basic understanding of key elements of the trade discussion must also be understood. Intellectual property rights in this frame of reference refers to the rights of a pharmaceutical company to have drug(s), and any chemical entity it invents, protected by law from being reproduced or copied for 20 years. This means that the company has sole rights over any newly discovered medication, its distribution, profits, and “trade secrets” and that both sovereign and international bodies may take action against any violators. Any country that is bidding to join or joins the World Trade Organization (WTO) must abide by these rules. Any generic manufacturer that unlawfully reproduces these drugs, as well as the country that harbors the company and the country that receives those drugs may have legal action taken against them by the country and company in which the patent is based. These WTO rules are largely based on TRIPS, which stands for the Agreement on Trade Related Aspects of Intellectual Property Rights, which was negotiated in 1994 to internationalize intellectual property rights and regulation (Braithwaite and Drahos). Its many facets and the United States’ dominance in shaping the agreement are of upmost importance to this paper.
It is US policy to deny the use of generic HIV/AIDs medication in countries even in countries where they are fundamentally necessary. US trade policy has routinely blocked trade negotiations in the WTO that attempted to create exceptions for life saving drug provision in countries that cannot afford them. US trade negotiators blocked a WTO agreement at the second round of Doha talks that would have increased access to generic medicines in poor countries. The US did compromise on several symbolically significant principles, but intermittently the US added extra measures which made the symbolic concessions an incomplete and thus completely ineffective solution to the problem. One concession made application for registration of a generic medication by a generic manufacturer possible before a patent’s term of protection ended, but at the same time precluded registration for marketing until after expiration of the patent and required notification of the application to the patent holder. Together, these two details effectively deny the possibility of the much smaller generic manufacturer going into production because of the extensive cost, loss of margins, and mounting legal troubles they will face (Baker 14). The larger problem with current TRIPS policy is that most adapted formulas of first line ARVs and second line ARVs were created post TRIPS and so are subject to these intellectual property laws. This means there is more than a decade’s time before most of these drugs can be reproduced and subsequent advances like fixed dose combinations (FDCs) and second or third line treatments are even farther from being eligible for reproduction (Palitzka).
In recognition of the debate between less developed countries’ needs for essential medicines and protection for developed countries’ and large businesses’ investments in pharmaceutical research, all WTO nations came together to compromise between access and investment protection in the Doha Declaration. Compulsory licensing was created to allow domestic production and distribution of medication in countries where there was an essential need. Essential need was loosely defined as having a large percentage of the population afflicted by the disease and a majority of those individuals being unable to afford treatment. While compulsory licensing was a promising initial step toward reaching an all encompassing legal precedence for world trade issues experiencing similar debates, the compromise failed because of its complexity. The legal mechanisms for integrating compulsory license into national law are so costly and cumbersome bureaucratically and legally that attempts at implementation were shown to be substantially difficult enough to become a barrier (Mullen). But even the simple threat of trade reprisals from countries with large economies is enough to prevent some nations from utilizing compulsory licensing (Calmy).
In addition to these complications, the US and the European nations were acting to undermine any gains that could be made by the declaration by signing bilateral trade agreements. This was an intentional partitioning of the world in times when a holistic approach was known to be the best method for success. “At the same time… [the US and Europe] were independently engaging in negotiations to bind several developing countries to even higher levels of protection of intellectual property rights (IPRs) via bilateral agreements” (Bagely 17). What came to be known by critics as the TRIPS plus agreement effects 23 developing countries with the ability to produce generics and as a result of blocked exports, up to 150 developing countries in need of affordable essential medication for anything from AIDs to Tuberculosis are forced to rely on the black market for medication (Bagley 17).
Another important policy block strategically added by the US and European countries under the influence of Big Pharma dealt with parallel importation. Parallel importation effectively became illegal, as it became legal to subject exporting countries to sanctions within the WTO for violating TRIPS. This policy directly effects PEPFARs efforts because of PEPFAR’s reliance on a distribution system similar to parallel importation. Parallel importation occurs when one WTO member country produces the generic medication themselves and then exports to a country that lacks the ability to produce the drugs autonomously. Previously a country could act under compulsory licensing to provide affordable medication to a country where those drugs were unavailable and essential to national health. This loophole was closed, and so PEPFAR could not purchase generic medication, though the US’s previous lack of utilization of this loophole suggests it would not have attempted parallel importation in the future. What this change in WTO trade policy did do, however, was to shut down any possible alternative country from working towards this goal under parallel importation. This means untold foreign national assistance programs and private based humanitarian programs were deterred (Bagley 17).
There is significant evidence to support the theory that there is a causal alignment between Big Pharma and US policy. The first is President Bush’s selection of Randall Tobias, recently the president and CEO of Eli Lilly, one of the largest pharmaceutical companies in the US, to head PEPFAR. PEPFAR has many more facets to it that are non-pharmaceutical than are pharmaceutical, so this appointment is suggestive to say the least. Perhaps greater evidence is the no less coincidental aggressiveness of the US to maintain global trade policies that favor Big Pharma. A prominent example is when the South African government attempted to utilize an article of TRIPS and legally allow compulsory licensing of AIDs drugs and it was not only sued by 42 pharmaceutical companies, but lost its “most favored nation” trade status with the US and was put under immense pressure on all trade fronts by US trade representatives (Bagley 17). Furthermore, during redefining TRIPS discussions, it was explicitly outlined that member state could create “more extensive protection programs” as long as the fell in line with TRIPS policies. This is a legal tool also utilized by the US to justify its aggressiveness (Bagley 17).
Additional evidence of a pharmaceutical link is shown by US attempts to block access of countries to quality generics on the international market. Generic competition in the global market is the key determinant of ARV prices. Historically, the price of ARVs only became even remotely affordable after generic versions entered the market, creating competition. In fact, Constance Marie Meiners of the University of Brasilia says, “generic competition is a key determinant of ARV price decreases” (Palitzka). This is why pressuring major generic producing countries such as India and Brazil out of the market by blocking their entry into the WTO is so detrimental to poor nations with national health problems. Overall, for countries such as India, joining the WTO has many more benefits to its own people than continuing production. This is why as of 2008 India will no longer allow production of generic drugs including ARVs, cutting off the biggest supplier of ARVs to the developing world (Bateganya).
US trade policy on intellectual property rights is at the very least preferential. Intellectual property rights go so far as to not only treat the product as property, but to also treat the “trade secrets” associated with them as property. Trade secrets would include such important information such a bioequivalence data. This is the weapon of “data-exclusivity”. This is a secret weapon of the pharmaceutical companies in Washington. Without the data, generic companies have to “duplicate time-consuming, expensive and ultimately unethical and wasteful clinical trials. Since it would not make sense to do so for time reasons alone -- clinical trials ordinarily take 6-8 years to complete -- data exclusivity spells a death knell to an effective import/export compulsory license scheme” (Baker 14). With US trade policy slanted toward big business and against public health and prosperity, it is not hard to make the same conclusions about US foreign assistance policy by studying the derived policies of PEPFAR.
Internal US policy regarding PEPFAR is perhaps the most directly flawed in terms of lost opportunities because while a shift in holistic US trade policy would set a precedence, a minor shift for one program in foreign assistance that only has the potential to under cut the pharmaceutical industries revenues by 1-2% would be viewed as an exception and would likely go largely unnoticed (Bateganya).The US refuses to purchase or supply drugs that have not been approved by the FDA. Until 2005, this effectively blocked all generic medication from being eligible for PEPFAR use. Only then did the government create an FDA expedited approval process. But this process is not quick and is certainly slow enough to be nearly ineffective (Baker 14). The slow pace of the duplicative scientific review, the time it takes for data to become un-exclusive, and the volume of legal issues and documentation all make this process outside the means of the majority of generic manufacturers. Since most existing generic manufacturers are based in countries outside the WTO, they would have to honor US patent law in order to be considered for FDA approval (Brown). In addition, by agreeing to receive drugs and assistance from the US through PEPFAR, benefiting countries are restricted from buying drugs unapproved by the US. Since there are very few generic manufacturers that make ARVs based in the US, very few have procedures that are carried out to verify their product with the US. Those countries which sign on to PEPFAR are left with a choice: choose Big Pharma or rely on their own health care systems and the black market (Ismail). Finally, working in tandem with the previous requirement, is another bureaucratic barrier that drugs used by PEPFAR be registered (not for safety, but for legality) in recipient countries. Again, this intentionally blocks out generic manufacturers because it is unaffordable for them to risk pursuing such small markets (PEPFAR).
What the US could have done is relied on the World Health Organization’s (WHO) Prequalification Process to ensure the safety and efficacy of medicines. This is the international equivalent of the FDA with almost the exact same procedures (Bartlett and Muro). In fact, because WHO standards and procedures were specifically created in consideration of resource poor settings, they might even be advantageous (Institute of Medicine). Its approval process uses volunteer representatives of drug regulatory bodies from France, Switzerland, and Germany and it is on this that the majority of nations around the world and such prominent humanitarian organizations such as the Catholic Relief Services and Doctors Without Borders rely (Cohen Schiff). With one mistaken approval by the WHO prequalification process in their history as compared to the FDA’s more recent mistaken and corrupt approval of Vioxx, it is unreasonable to suggest one regulatory body is safer than the other. A switch to WHO prequalification is advocated by The HIV Medicine Association , the Infectious Disease Society of America, the UN, the Kaiser network, the National Academies, the World Bank, and countless human rights organizations and governments around the world (Sengwana).
Perhaps the most important impact of this FDA only policy, more important than the sheer number of people who could have been treated but were not, is the lack of sustainability this creates in the global fight against AIDs. In this global financial crisis and in a part of the world where instability can upset systems and scare off donors, it is important to consider what might happen if PEPFAR was eliminated. Steve Gloyd, of the University of Washington said, “It is hard to simplify [an AIDS treatment system] when the Americans say: Let's do it with different drugs and a separate procurement system," (Brown). PEPFAR’s central tenet of sustainability is harmonization. “The central tenet of harmonization is that sustainable gains against the AIDS pandemic require that each country own and lead its response to its epidemic. The role of donors is to support and participate in three country-determined elements critical to an effective response—one national AIDS plan, one national AIDS coordinating mechanism, and one national AIDS monitoring and evaluation framework” (Institute of Medicine). US reliance on the FDA undermines the global effort and has been found to be the number one impediment to a sustainable increase in the number of people receiving ARV treatment. It is the greatest obstacle to coordination and harmonization on all levels of the effort both globally and locally (Institute of Medicine). Disregarding local supply management and drug regulation (most recipient countries prefer WHO standards and are not in the WTO) damages national health systems, especially the pharmaceutical sections. It creates a multi-drug distribution system which increases the work load on overstretched health workers and increases the risk for resistance to build up in patients. It wastes money that could be spent developing international support for ARV treatment increases, and it directly undermines non-US AIDs initiatives (“A Statement…”).
These policies, if continued, have dire consequences for the future of HIV/AIDs victims. This means that the newest AIDs medicines, which can have the greatest impact on the disease, are almost entirely precluded from receiving approval by the US for use in sponsored humanitarian programs. This excludes such important new drugs as (FDCs). FDCs make treatment significantly easier for patients and health workers by combining stronger medicine of equal dosage into a so-called AIDs cocktail that can be taken once a day (Baker 14). This is advantageous because ARVs normally need to be taken three times a day for life, which presents increased risk to the patients to develop resistance through lack of adherence to the drug regimen (Cohen and Schiff). In addition to this possible route to resistance, Brazilian studies have found that on principle, the lower availability of ARVs causes the higher the propensity for misuse, and thus, increased resistance and mutation of the virus (Teixiera). Resistance is what causes first-line treatments to become ineffective and the patient to either lose the benefits of ARVs or change to different drugs such as second lines.
Even more dangerous is the risk that US assistance and trade policy pose to the future fight against AIDs. Noting that there has been a successful major scale-up of treatment programs in resource poor settings, there needs to be deeper analysis on what this means for the fight against HIV/AIDs. In addition to fixed dose combinations, second line therapy drugs needed to sustain the positive effects of the first line ARVs are needed in ever growing amounts due to resistance, intolerance, and an ever increasing number of surviving patients (Global). This means an increasing proportion of assistance budgets will be directed toward more expensive second line drugs and less money will be available to start or continue first line therapies. The US and other assisting nations have to prepare now for the dramatic increase in treatment program cost and complexity and the collapse of health systems as a result of these poor policies (Morrison and Moore). Ensuring access to these drugs which will become essential in the coming years “…can only be achieved through firm political commitment to removing intellectual property barriers that stand in the way of generic competition” (“Too Little…”).
There are major changes needed in US and to a lesser extent global policy concerning intellectual property rights and foreign assistance. It is, however, important to remember that although action can be taken today, the damage done can never be erased. PEPFAR grantees are already locked into contracts, supply chains, bilateral agreements, and procurement systems with the currently less affordable Big Pharma medication. In addition, large portions of the generic industry have already been shut down and would take years to restart manufacturing (Baker 14). The time lost means an even greater number of people are infected and newer essential medication is even further away from being ready for generic production on a large scale. Most importantly, when the US and the world made a promise to end the suffering of AIDs victims and then defaulted, people and hope that should not have died did. Without US leadership in reversing policies and re-establishing a global paradigm, the US is effectively stimulating the environment that exponentially spreads this catastrophe around the globe (Fidler 99). It is imperative to the lives of millions around the world that the US government and its citizens take a closer look at the level and effects of the pharmaceutical lobby on non-domestic health policy, and if there is a wrong to be found the voices of a freely compassionate nation should demand that their promise be kept and that lobbying no longer extinguish hope.
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