POLITICS
05/11/2016 10:47 pm ET

Colombia Fears U.S. May Reject Peace Plan To Protect Pharma Profits

A leaked Colombian Embassy memo suggests the U.S. wants to preserve the high price of cancer drug Gleevec.
Carlos Barria / Reuters

WASHINGTON -- The Colombian Embassy is concerned that lowering the price of a major cancer drug may jeopardize American funding for peace talks in the South American nation, according to a leaked embassy memo.

In February, President Barack Obama committed $450 million to aid peace talks between the Colombian government and the Revolutionary Armed Forces of Colombia, a Marxist rebel group known as FARC. The money would help the Colombian government fight the illegal drug trade and retrain FARC members.

But in an April 27 memo, Colombian diplomat Andrés Flórez said he was worried the U.S. would withhold peace funding if the Colombian government lowered prices on the drug Gleevec, also sold as Glivec. The memo was first posted by the think tank Knowledge Ecology International.

Both the American government and Novartis, the Swiss pharmaceutical company that makes Gleevec, want to maintain high prices for the drug, according to the memo. The standoff over drug affordability could "escalate to the point that it could impair the approval of the financing of the new initiative 'Paz Colombia,'" the memo reads. Paz Colombia is the name for the peace aid program Obama announced in February. 

Novartis charges nearly double Colombia's per capita income for a year's supply of Gleevec to treat a single patient. As a result, the Colombian government is considering issuing a much cheaper generic copy.

In his letter to Colombian Minister of External Affairs María Ángela Holguín, Flórez suggested he felt pressure from both the Office of the U.S. Trade Representative -- a division of the Obama White House -- and members of the U.S. Congress with ties to the pharmaceutical industry.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) has received millions of dollars in campaign contributions from drug companies, and has benefitted from hundreds of thousands of dollars in pharmaceutical company donations to other outside groups. His son, Scott Hatch, has lobbied on behalf of the Pharmaceutical Research and Manufacturers of America -- the top lobbying group for the prescription drug industry. The Senate Finance Committee has jurisdiction over U.S. trade policy.

"The Senate Finance Committee staff routinely meets with foreign governments to seek clarifications on actions that may be inconsistent with international trade obligations," Julia Lawless, a spokeswoman for Hatch, said in a statement.

Issuing generic drugs is consistent with World Trade Organization treaties and the U.S. trade agreement with Colombia.

A spokesperson for the Office of the U.S. Trade Representative said USTR met with Colombian officials "to discuss numerous intellectual property issues in general after the release of the annual Special 301 report, which covers a wide range of intellectual property issues all over the world."

The 301 report lists countries that the U.S. government deems to have weak intellectual property standards. The list is often used to pressure countries into guaranteeing prescription drug monopolies.

The Colombian Embassy wouldn't comment for this article. 

In the memo, Flórez wrote that he also was concerned that making a generic version of the cancer drug available would jeopardize Colombia's ability to participate in the Trans-Pacific Partnership, a major trade pact that Obama recently signed with Asian and South American countries.

U.S. trade policy has prioritized pharmaceutical company profits for decades. Both Republican and Democratic administrations have sought intellectual property rules that would grant drug firms long-term monopolies on their medications. Those monopolies immunize firms from competition, allowing them to charge very high prices.

But the free-trade agreement inked between Colombia and the U.S. under President George W. Bush appeared to signal a new direction. That pact, ultimately approved by Obama and Congress in 2011, included more flexible terms on drug monopolies. It also included a side letter acknowledging the Colombian government's right to approve generic drugs in cases of "extreme urgency." Threatening to upend peace talks over cancer drug prices would be a dramatic reversal of that agreement.

Both the Obama administration and Hatch have used trade policy to bolster the prescription drug industry. The administration has been especially aggressive with India on generic drugs, and has disappointed Doctors Without Borders and other global health groups with TPP, which included terms ensuring long-term drug company monopolies on lifesaving medications.

A KEI translation of the memo is below.

 

In Washington, DC, on April 27, 2016

Attn: María Ángela Holguín

Minister of External Affairs

From: Andrés Flórez

Deputy Chief of Mission

Embassy in Washington, DC

Ref.: GLIVEC - NOVARTIS

 

Dear Madam Minister,

These past few weeks, several pharmaceutical companies in the United States and interest groups have communicated with the embassy and the Commercial Office to express their concerns regarding regulatory issues which, according to them, affect the interests of this industry in Colombia. Among other issues, they are concerned by the possible declaration of public interest concerning a compulsory license for the drug known as GLIVEC and produced by the pharmaceutical company NOVARTIS.

The possibility of an administrative act declaring a compulsory license on the drug GLIVEC has become a topic of interest for the USTR and the US Congress. For instance, tomorrow, we will attend, with the Director of the Commercial Office, a meeting held at the request of the members of the Senate Finance Committee who worry about the compulsory license process mentioned above. Also, the USTR has requested a meeting with the Ambassador Juan Carlos Pinzón in order to convey their major concern regarding this issue as well as other related issues.

Given the direct link that exists between a significant group of members of Congress and the pharmaceutical industry in the United States, the case of GLIVEC is susceptible to escalate to the point that it could impair the approval of the financing of the new initiative “Paz Colombia” as well as become an issue in the framework of the free-trade treaty.

Moreover, the whole situation might have a negative impact on the commercial interests of our country in the United States, which might even weaken the support that this country could give us in case of a possible future membership to the Trans-Pacific Partnership - TPP.

Given these facts, and following the instructions of the Ambassador Juan Carlos Pinzón, we think that the National Government should assess the measures considered and respond at its best interest to the concerns that have been expressed. Likewise, we are of the opinion that it is necessary to take a correction of our course in order to avoid claims against our country.

Best regards,

/signature/

Andrés Flórez

[Deputy Chief of Mission]

 

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