AIDS Healthcare Foundation praises Thailand for drug stance

May 4 2007

AIDS Healthcare Foundation (AHF) has lauded the Government of Thailand for its vow to continue with plans to issue compulsory licenses for the manufacturing and importing of generic versions of lifesaving drugs, including AIDS drugs, despite the fact that the office of United States Trade Representative (USTR), elevated Thailand to its 'Priority Watch' List.

On Monday, the USTR released its annual 301 Report, which includes a Watch List of countries that the USTR believes are threats to the global drug industry. AIDS Healthcare Foundation chastised the office of U.S. Trade Representative for penalizing Thailand by placing the country so prominently on the trade group's Watch list for what AHF notes was Thailand's exercising of its World Trade Organization-granted rights to protect public health.

"In elevating Thailand to 'Priority Watch' designation -- the highest urgency designation -- the USTR is seeking to punish the country despite the fact that Thailand adhered to international law in its efforts to increase access to affordable lifesaving AIDS and other drugs for its citizens," said Michael Weinstein, President of AIDS Healthcare Foundation. "We commend the Government of Thailand for its legally-permissible actions to safeguard the health and welfare of its people, and are saddened, but not surprised, that the office of the Trade Representative would bow so willingly to the drug industry's lobbyists."

While Thailand stands steadfast on compulsory licensing, the USTR appeared to succumb to pressure from the Pharmaceutical Research and Manufacturers of America (PhRMA), the deep-pocketed drug industry lobbying group which had submitted its own PhRMA Special 301 Submission 2007 pointing out what the industry believes are threats to the pharmaceutical industry and its worldwide profits. PhRMA's submission to the USTR recommended that Thailand be elevated to the USTR's higher 'Priority Watch' designation.

"In seeking to provide lifesaving AIDS and other drugs to its people, Thailand worked within World Trade Organization guidelines to increase access to affordable medicines," added AHF's Weinstein. "The same WTO agreement that expanded patent protection globally also allowed a country like Thailand to take action protecting public health. It's no surprise that the drug industry would strong-arm the US Trade Representative on this issue, as the industry seeks to exploit the developing world to compensate for lack of new industry innovation."

According to the USTR mission statement, "American trade policy works toward opening markets throughout the world to create new opportunities and higher living standards for families, farmers, manufacturers, workers, consumers and business."

"American trade policy can't simultaneously try and raise 'living standards for families' while its actions allow these same families to die for what amount to incremental increases in drug industry profits," noted AHF's Weinstein. "Thailand represents just one half of a percent of the global market for pharmaceuticals. In trying to protect the health of its citizens, Thailand has unwittingly become the line in the sand in the drug industry's push for its expansion in the developing world."

Flexibilities under the World Trade Organization's (WTO) Trade-related Aspects of Intellectual Property Rights (TRIPS) Agreement allow governments to issue compulsory licenses (including royalty payment to the patent owner) if the country deems it necessary and appropriate to protect the health of its citizens. Thailand's most recent action under TRIPS public health guidelines include its Ministry of Health's move to produce an affordable version of Abbott Laboratories' two-in-one AIDS medicine, Kaletra following stalled price reduction negotiations between the Government of Thailand and Abbott to reduce the price US $2,200 (per patient yearly) to US $1,000.

A World Bank report issued in late 2006 suggested that the Thai government should perhaps do what AIDS advocates had long been calling for -- issue a 'compulsory license' to access generic versions of patented second line ARVs, without the consent of the companies that developed them, a move that is legal under the international TRIPS agreement when a government deems it necessary to protect public health: The WB report noted:

"Because the drugs used in second-line therapy are patented, produced and sold by multinational pharmaceutical corporations, Thailand must either pay high prices demanded by those monopolies or exercise its rights under World Trade Organization (WTO) treaties to grant compulsory license for the manufacture of the drug." - World Bank

Contrary to claims by drug companies, increased intellectual property protections have not fostered more innovation for better treatment. A 2006 Government Accountability Office (GAO) report found that despite increased spending on research and development over the past decade the number of new drug applications (NDAs) had not significantly increased. According to the report, "Although the pharmaceutical industry reported substantial increases in annual research and development costs, the number of NDAs submitted to, and approved by, the FDA has not been commensurate with these investments." Further, the report cited over two thirds of new drug applications being for modifications to existing drugs. This process of making slight changes to drugs is often used to prolong the life of patents in order to sustain monopolies. With revenue exceeding $1 billion annually for many drugs, the report says, most pharmaceutical companies have been more inclined to pour funds back into "blockbuster" drugs that can yield further profit rather than more innovative treatments including those for diseases affecting the world's poorest populations like HIV/AIDS, Malaria and TB.

"Despite self-congratulatory propaganda characterizing the drug industry as champions of public health, PhRMA continues to undermine any effort to make lifesaving drugs more affordable to those that need them. In its relentless pursuit of higher profits at the expense of lives, PhRMA, and all institutions that support its actions, have chosen to be enemies of the right to public health," added AHF's Weinstein.