Transcript Global Trade and Healthcare

Global Trade and Healthcare
Timothy F Christian, MD,MPA
• Established from GATT in 1994
• With the recent addition of Russia, almost all
countries now belong to the WTO
• Ministerial Conferences every two years.
• General Councils
• Councils for goods, services and Trips.
• Decision Making by Consensus.
• Each member = one vote.
WTO Function and Operation.
Forum for negotiation.
Administer Rules.
Settle Disputes.
Review Trade Policies.
Cooperate with other organizations.
Core Agreements of the WTO
• Agreement establishing the WTO
• The General Agreement on Tariffs and
Trade.
• General Agreement on Trade in Services.
• Agreement on Trade-Related Aspects of
Intellectual Property Rights.
• Understanding on Settlement of Disputes.
• Trade Policy Review Mechanism
How the WTO Works.
• The parties seek to achieve their goals “by
entering into “reciprocal and mutually
advantageous arrangements (italics added)
directed to the substantial reduction in tariffs
and other barriers to trade and to eliminate
discriminatory treatment in international
trade “. (WTO Introduction.)
Reciprocity: The Guiding Paradigm.
• “ The principle of reciprocity in GATT refers to
the “ideal” of mutual changes in trade policy
which bring about changes in the volume of
each country’s imports that are of equal value
to changes in the volume of each country’s
exports.” (Kyle Bagwell, Kyle and Robert
Staiger)
Rules for Fair Trade.
• Anti-dumping and Countervailing duties. (Art
VI) (unfair trade by firms and governments)
• Dispute Settlement
• Preservation of intellectual property
• Preservation of Trademark
WTO is Stacked Against LDCs
• WTO membership implies MFN status to all
countries (elimination or marked reduction of
trade tariffs)
• To settle disputes (such as IP), countries can bring
a complaint (301) to the WTO
• If there is merit, the dispute settlement can be
either compensation to the offended country or
reinstitution of tariff barriers between them
• For US, tariffs by an LDC are of no consequence
but trade tariffs with US are devastating to LDCs
Tale of Two TRIPS
Trips 1
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Pratt and Open have idea aproach
USTR
Provide resources.
Set up Intellectual Property
Committee
Expert Staff (IBM Gorlin)
Draft 1988 position paper.
US threatens Uruguay Round
LDCs agree to TRIPS in exchange for
Agriculture trade agreement
• 1984 Trade Act: IP Actionable
Under Section 301.
Trips 2
• Health Action International
organize 1996 meeting.
• 1998 Action at WTO: USA and EU
use TRIPS to reject WHO resolution
on Drug Strategy.
• MSF generate articles in medical
journals. Campaign on Access to
essential medicines.
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1999 Geneva conference on
compulsory licensing (HAI, MSF
Consumer Project).
Partner with HAI Oxfam, Consumer
Project on Technology
Use of internet. Web-letter: IP
health.
Article 31 adopted, MSF wins Nobel
prize
Declaration on the TRIPS Agreement and Public Health.
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4. We agree that the TRIPS Agreement does not and should not prevent
Members from taking measures to protect public health. Accordingly, while
reiterating our commitment to the TRIPS Agreement, we affirm that the
Agreement can and should be interpreted and implemented in a manner
supportive of WTO Members’ right to protect public health and, in
particular, to promote access to medicines for all.
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(b) Each Member has the right to grant compulsory licenses and the
freedom to determine the grounds upon which such licenses are granted.
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(c ) Each Member has the right to determine what constitutes a national
emergency or other circumstances of extreme urgency,
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(d) The effect of the provisions in the TRIPS Agreement that are relevant to
the exhaustion of intellectual property rights is to leave each Member free to
establish its own regime for such exhaustion without challenge,
The TRIPS Interface
WTO
-For-profit entity
-Major source of
medical innovation
-IP is key factor
Pharma
-Dominated by US/EU
-Imbalance in DSU
-Consensus run
-Consensus denial is
only option in WTO
-Chronic infections
-Poor regulation IP
LDCs
Parallel Imports.
• Goods brought into a country without
authorization of the Patent, Trademark or
copyright holder.
• “National exhaustion”. Rights end with
first sale in country—so IPR holders can
prevent parallel imports.
• “International Exhaustion” Cannot prevent
rights end with first sale anywhere.
iTF110
Parallel imports of Drugs: LDCs
• Doha round allows LDCs to produce generics
for public health
• A majority of LDCs do not have infrastructure
to do manufacture generics
• Parallel imports to LDCs from India and other
generic producers allowed under waiver of
Art. 31F
• US finally accepted waiver in 2003 with caveat
it cannot be expanded to other industries
Remaining Issue: Parallel Imports
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IMPORTING UNDER COMPULSORY LICENSING.(‘PAR.6’) 31(f) of the
TRIPS Agreement says products made under compulsory licensing must be
“predominantly for the supply of the domestic market”. This applies to
countries that can manufacture drugs — it limits the amount they can export
when the drug is made under compulsory license. And it has an impact on
countries unable to make medicines and therefore wanting to import
generics. They would find it difficult to find countries that can supply them
with drugs made under compulsory licensing.
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The problem was resolved on 30 August 2003 when WTO members agreed
on legal changes to make it easier for countries to import cheaper generics
made under compulsory licensing if they are unable to manufacture the
medicines themselves. The decision waives exporting countries’ obligations
under Article 31(f) — any member country can export generic
pharmaceutical products made under compulsory licenses to meet the
needs of importing countries, provided certain conditions are met.
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Codex Alimentarus and the WTO
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The science branch of the WTO
Regulates trade in food products
This includes residual drugs in meat etc
Tightly linked to the WTO to provide standards
for Agriculture trade
• However, they do not regulate trade in drugs or
devices for human use
• Each country is responsible for its own policing of
drug quality though WTO rules dictate contents
iTF110
Counterfeit Drugs in LDCs
%counterfeit
80
70
60
50
40
%counterfeit
30
20
10
0
Western
Countries
LDC/BRIC
Online
iTF110
India Generic
Scope of the Problem
• Counterfeit medicines constitute between 40 and 50 per
cent of total supply in Nigeria and Pakistan
• In China, authorities have found that some products
have a counterfeit prevalence ranging between 50 and
85 per cent.
• 36.5 per cent of antibiotics and anti-malarials on WHO
essential drugs list in Thailand and Nigeria are
substandard (Shakoor et al, 1997).
• A recent survey by the WHO of seven African countries
found that between 20 and 90 per cent of all antimalarials failed quality testing.
Counterfeit Drugs
• Only 20% of countries have agencies to regulate drugs
• Senegal: 12/22 random doses ampicillin=no drug
Thailand, 40% artesunate inactive, Vaccines etc
• Most fake generics originate in India, China, online
• It is WTO Art 31 waiver that allows them to produce
w/o regulation
• $Billions Industry, cheap price, no insurance
• OECD combat threat: seize both real and fake generics
under “trademark” infringement during transit
• Some see this as suppression by West to protect
Pharma
Essential Medicines
• 30-50% of world pop lacks access to medicines
• Differential pricing helps but subject to
corruption and selectivity
• Lack of Insurance
• Most countries have a model list but
insufficient infrastructure/wealth to purchase
and distribute
• WHO program: Generic formularies and
donations but no solution
Competition reduces prices:
Evidence from HIV/AIDS
Local production of drugs in LDCs
Pro
Con
• Security thru
independence
• Draw to bring in
expertise
• Creates Jobs
• Potential for export
• No comparative
advantage
• Duplicative
• Requires infra-structure
• Regulation for
corruption/counterfeits