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Dr. Manica Balasegaram Headshot

TPP: Still a Terrible Deal for Poor People's Health

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When the intellectual property (IP) chapter of the U.S.-led Trans Pacific Partnership (TPP) trade agreement was leaked late last year, it confirmed everything public health watchers had warned about for years. The far-reaching 12-country trade agreement would deny access to affordable medicines for patients across all TPP countries by strengthening and lengthening drug patent and regulatory monopolies and delaying generic competition. Several negotiating countries balked at the blatantly anti-public health provisions, so the U.S. proposed giving the poorest countries more time to comply with a few provisions.

According to the new U.S. proposal, TPP countries would be divided into two groups using the World Bank's income classification system. Countries that currently fall below the high-income line (e.g. Malaysia, Mexico, Peru and Vietnam) would be temporarily exempt from three of the most harmful provisions, each of which would serve to block or delay the availability of more affordable versions of medicines."

Other provisions similarly harmful to public health would still be immediately required of all countries. The limited exemption would remain in effect for a specific period of time, which would either be determined by when the country graduates to "high income" status according to the World Bank income classification, or be arbitrarily set through a TPP "transition" period.

U.S. negotiators have described this proposal as an important concession in the interest of public health. But further analysis by Oxfam and Doctors Without Borders/Médecins Sans Frontières (MSF), reveals that the U.S. plan would not only leave the worst aspects of the TPP intact, it would be devastating to hundreds of millions of poor people living in all TPP countries. It would also further exacerbate income and health inequalities in these countries.

The U.S. proposal draws an arbitrary and unfair line to determine which countries would have to comply with all TPP provisions right away. World Bank income classification is an inappropriate measure of a country's or a population's capacity to afford high-priced medicines. The classification dates back to the 1980s and only measures a country's per-capita average of total income. Looking at average income doesn't account for uneven distribution of income within a country, or its public health needs.

The map of poverty has changed since the 1980s. Today, the majority of the world's poor no longer live in poor countries, but rather in places where there is greater wealth along with higher inequality.

The fact that MSF is increasingly responding to the unmet medical needs of patients living in countries considered middle or high income is a clear representation of this shift. MSF now operates in more than 30 countries classified by the World Bank as middle or high income. Activities range from short-term emergency response and HIV and TB programs, to programs for refugees and migrants and emergency obstetrics and trauma surgery.

To assess the impact of the TPP, MSF and Oxfam used the U.S. Medicaid-defined poverty line ($21.50/person per day) to estimate how many millions will live below it once countries cross the high-income threshold. In eight of the 12 TPP countries for which there is data, more than a quarter of a billion people will live below the U.S. Medicaid line when their country is classified as high income. By the time Malaysia and Mexico reach high income designation, more than 80 percent of their populations will still fall below this poverty line. Among current high-income TPP countries, which will be forced to immediately adopt all TPP provisions, the percentage of the population under this poverty line ranges widely, going as high as 69 percent in Chile.

As countries become richer by World Bank standards and are expected to invest more funds towards health care and medicines, continued access to affordable medicines and generic competition will become even more critical.

The ability to manufacture and/or purchase low-cost generic medicines requires maintaining a balance in a country's patent system between monopoly protection and public health. Yet, the TPP will reduce or eliminate that balance by curtailing existing legal flexibilities, and limiting government discretion to negotiate medicine prices.

Under existing international trade rules negotiated less than 20 years ago, which implemented the strictest IP global norms in history, countries were assured of the right to use basic legal safeguards to facilitate generic competition to protect public health. With the TPP, the U.S. government is attempting to re-write the rules.

No matter how long some of the most onerous provisions are delayed, the TPP in its current form will be a terrible deal for all countries involved. Negotiating countries must not be fooled by this so-called compromise from U.S. negotiators. The TPP is as damaging today as it has ever been. For the health and well-being of at least 800 million people, countries must reject these terms.