Thailand and medicine patents: an early test for Obama trade policy

03/11/2009 09:41 am ET | Updated May 25, 2011

Around the 30th of April, the United States Trade Representative will issue something called the "Special 301 Report." The USTR 301 report, while practically unknown within the United States, will make front page news in many developing countries. USTR describes the report as follows:

The "Special 301" Report is an annual review of the global state of intellectual property rights
(IPR) protection and enforcement, conducted by the Office of the United States Trade
Representative (USTR) pursuant to Special 301 provisions of the Trade Act of 1974 (Trade Act).

This is a list of the countries that the USTR says are not meeting U.S. standards of intellectual property protection. Countries that make the list are put into different categories, such as "Priority Watch list," the "Watch List," and "Section 306." The 51 page 2008 301 Report starts with a 15 page discussion of U.S trade policy on intellectual property rights, followed by extensive reviews of individual countries. It is a highly transparent and detailed expression of U.S. trade policy, covering a diverse set of issues, such as the use of compulsory licenses on life saving medicines, consumer protection policies for digital music players, or exceptions in copyright law for education purposes.

In the past (through Reagan, GHW Bush, Clinton, and GW Bush presidencies), the list has been deeply biased. It is basically an edited version of one-sided submissions from a handful of corporate lobby groups representing the pharmaceutical, entertainment and publishing industries, reviewed by an advisory board made up entirely of lobbyists for these same industries.

An early test of the Obama Administration will be the 2009 301 Report, which is due in a few weeks. PhRMA and a significant bi-partisan group of U.S. members of Congress are pushing to punish Thailand, for having in the past exercised the rights guaranteed in WTO agreements and countless World Health Organization (WHO) resolutions to protect its own population from high drug prices, by issuing a handful of compulsory licenses on drug patents.

The U.S. pressure on Thailand has been the subject of widespread censure within the global public health community. Our government has ignored and violated countless global agreements that allow or even demand that Thailand take steps to promote access to medicine for all.

The U.S. position violates the human rights of people who living in Thailand, and demonstrates our callous disregard for commitments we have made in the WTO (the 2001 Doha Declaration on TRIPS and Public Health).

Many members of Congress, from both parties, are prone to making demagogic statements about IPR enforcement in developing countries. They often understand practically nothing of the legal, moral or practical issues at play. Pushed by lobbyists who shovel out money to anyone in power, some members of the U.S. Congress find it much easier to give a speech about how U.S. industries are being ripped off by developing countries who steal our intellectual property, than to find ways that would truly make the U.S. more innovative and competitive in the modern economy.

In a few weeks, Obama will set his first stamp on U.S. trade policy. It will be challenging to change policy in the short run, given the deeply embedded values and prejudices that exist in the current system, and the lack of IPR knowledge and sophistication by the incoming USTR head, Ron Kirk. At a very minimum, Thailand should be spared a 301 listing for its commendable efforts to promote access to medicines for all, and the White House should have its own talented innovation and public health teams take a close look at the wrong headed policies that USTR is pushing globally.

White House officials like Michael Froman should give some face time to NGOs that work on public health and trade issues, consumer groups, librarians, and innovative businesses that understand the benefits of more balanced IPR policies generally.

Notes: Bangkok Post on recent U.S. trade pressures.

KEI Web page on disputes involving Thailand and medicine patents.

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All of these issues are technically complex, and difficult to evaluate based only upon the USTR 301 Report, which is highly selective or biased in how it presents disputes. Here are a few examples of the provisions of the 51 page 2008 301 Report:

Thailand
While the United States recognizes the importance of Thailand's public health challenges, Thailand's recent policies and actions regarding the compulsory licensing of patented medicines have contributed to continuing concerns regarding the adequate and effective protection of IPR in Thailand. The United States is awaiting further information on the new Thai government's approach in this area and hopes to work constructively on this and other IPR issues in order to strengthen Thailand's IPR regime.

Chile
Chile will remain on the Priority Watch List in 2008. Chile's IPR performance continues to fall well below expectations for a U.S. free trade agreement partner. The United States remains concerned about inadequate protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products and insufficient coordination between Chile's health and patent authorities to prevent the issuance of marketing approvals for unauthorized copies of patented pharmaceutical products.

Supporting Pharmaceutical Innovation
Historically, the Special 301 process has focused on the strength of intellectual property protection and enforcement by our trading partners. However, even where a country's IPR regime is adequate, price controls and regulatory and other market access barriers can discourage the development of new drugs.

China
The United States continues to urge China to price drugs in a manner that appropriately values innovations and to add new drugs to its national formulary, which controls access to medicines 16 for China. The United States also urges China to adopt regulatory and reimbursement policies for medical devices that support innovation and increase the transparency and predictability in that market.

IPR and Interoperability
In France, for example, copyright legislation enacted in August 2006 contains provisions enabling a government entity to mandate the disclosure of IP-protected digital rights management information in the interest of promoting interoperability. The United States has expressed concern that this legislation may, depending on its implementation, impinge upon IPR of both the creators of the digital rights management technologies and of creative works protected by those technologies. Similar approaches reportedly are being considered in other European countries, including Belgium, Germany, Norway, and Sweden. In addition, these issues are receiving attention within the European Commission. In some cases, consumer protection laws and regulatory authorities have been engaged to pursue interoperability at the potential expense of IP right holders. This complex intersection of issues will continue to receive U.S. policy attention in the coming year.