10/19/2005 12:16 am ET Updated May 25, 2011

Preparing for Bird Flu? US Waived Right to Import Generic Medicines in Cases of Medical Emergency

For the second time in four years the United States is facing a shortage of a critical medicine that might be needed in the event of a catastrophic health emergency. In both cases, the shortage was more severe because the Bush Administration was unwilling to issue a compulsory license on patents in order buy generic medicines. This time there is a new twist -- the United States and 22 other countries are barred from using a key provision in a 2003 World Trade Organization (WTO) agreement that allows the importation of medicines manufactured under a compulsory license. The key architects for this provision are two people -- Karl Rove and Pascal Lamy, both acting to protect big drug companies.

Today the United States is struggling to deal with the enormous risks associated with a human flu pandemic, including one possibly involving Avian Bird Flu, which in a worst case scenario would kill millions and contribute to widespread panic and civil disorder. One medicine thought to be useful in treating some strains of Avian Bird Flu is oseltamivir, a drug invented by Gilead and licensed to Roche as Tamiflu.

Oseltamivir is not the only medicine that would be used to treat a pandemic of bird flu, and bird flu is not the only public health emergency that this country and the rest of world are likely to see. But the government has no real plan to deal with such cases. This is by design. Here is a quick history of how we got where we are today.

For more than 20 years, the US government, urged and led by drug company lobbyists, had waged a global campaign for tougher rules on patents for medicines. Few Americans were aware of the particulars until a small but effective group of AIDS activists called attention to the morally repugnant nature of US government opposition to compulsory licensing of patents on AIDS drugs. This began in the Clinton Administration, and included a highly visible protest against Al Gore in the 1999/2000 primary campaigns. By December of 1999, the Clinton Administration had largely changed its position on these issues.

When Bush was elected president he was expected to return to the older policy of protecting big pharma. But to the surprise of most people, then USTR head Bob Zoellick was able to retain the basic elements of the new policies, which were more friendly to public health. During 2001 Zoellick actually dropped a Clinton Administration WTO case against Brazil, and he took surprisingly moderate positions in a new debate at the WTO over a major Declaration on intellectual property and public health.

Right before the November 2001 WTO ministerial in Doha, we had 9/11 and the Anthrax attacks in the United States, when several members of Congress and others, including Judy Miller of the New York Times, were mailed anthrax. No one knew then or now what motivated the anthrax mailings, but there was concern that terrorists might have penicillin-resistant strains of anthrax.

The only FDA medicine approved to treat such a strain was ciprofloxacin, which was patented in the United States by Bayer. Like Roche today, Bayer could not supply the US government with sufficient supplies of the medicine to meet the stockpiles the medical experts wanted. The US and Canadian governments threatened to override the Bayer patents to buy generic products, but ultimately they decided to let Bayer take years to supply the medicine itself. It was a gamble, and of course there was no large-scale attack.

But the US negotiating position in the WTO talks was greatly compromised by its flirting with a compulsory license for anthrax. Millions of persons in developing countries were actually dying from AIDS and other diseases. The outcome of the negotiations was a remarkable seven-paragraph Doha Declaration on TRIPS and Public Health, which declared that patents laws should be implemented in manner that promotes access to medicine by all. This was endorsed by all WTO members, including the US, in November 2001.

The big drug companies were outraged at this turn of events, and decided accurately that Zoellick as not going to be a reliable ally, and they began dealing directly with the White House. They turned their attention to one bit of unfinished business in the 2001/Doha agreement, and that was to find a solution to cases where a country with insufficient manufacturing capacity needed to import a medicine. The details of the issue are complicated and typically misreported in the press, but in essence, they concern a prohibition against the export of medicine manufactured under a compulsory license. Paragraph 6 of the 2001 Doha declaration promised a fix.

By early 2002 USTR officials were complaining that the Bush White House was intensively supervising their negotiations on the "para 6" issue. Meanwhile, big pharma companies reportedly raised some $30 million for Karl Rove that was used very effectively in swing states to keep the republicans in control of the House and Senate. From this point on, the White House was micromanaging the negotiations on the export issue. During a dramatic period near Christmas 2002, USTR claimed that it was sometimes receiving hourly calls from the White House, who were pushing unsuccessfully to limit the waiver of the export restriction to a handful of diseases, which was the position preferred by Pfizer. The offices of Karl Rove and Josha Bolten (now OMB Director) were the most deeply involved, according to USTR negotiators.

The big drug companies wanted to limit the impact of the waiver, so that it would rarely be used. The US failed in its efforts to limit the scope of diseases. But the US and the European Union, led by then DG-Trade head (and current WTO head) Pascal Lamy, did succeed in a number of other ways to undermine the export waiver, including a little-known provision that barred the United States and 22 other high-income countries from using the waiver as importers in any circumstances. The agreement is officially known as "Implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health: Decision of the General Council of 30 August 2003."

The Bush White House and the European Commission demanded countries be allowed to opt out of the waiver for purposes of importing medicines. Actually, they were allowed to opt out in different ways. Some countries for example said they would only use the waiver in cases of national emergencies. But the United States and 22 other countries (including all of the members of the European Union before enlargement) elected to opt out under any circumstances, including cases of national emergency.

Press reporting on compulsory licensing of patents is notoriously inaccurate. It is impossible to deal with all of the urban legends that often find their ways into MSM reports, but a few facts are useful to remember. First, compulsory licensing of patents is the most basic mechanism to deal with matters of abuse or public interest concerning patents. It is more common than people think. There is no requirement that the compulsory license be related to a medical emergency. The US government has compulsory licenses on Microsoft Windows protocols, tow-truck patents, Monsanto seed patents and thousand of other items. Roche, the company at the center of the controversy over Bird Flu, asked for a compulsory license on Chiron patents on AIDS diagnostic technologies, in Germany in 2000. Tommy Thompson threatened compulsory licenses on stem cell patents held by the Wisconsin Alumni Research Foundation (WARF) in order to deflect criticism of the Bush Administration restrictions on using new stem cell lines for medical research.

In most cases, if a government requires a compulsory license of a patent, there is an obligation to pay remuneration to the patent owner. This can be large or small, depending upon policy objectives. If a patent owner cannot supply a necessary medicine in a case of a medical emergency, the government should protect the public by issuing compulsory licenses to companies that can, and send as much money as it wants to the patent owners it wants to provide incentives for R&D.

The problem today, and likely the problem in the future, is that not all of the potential suppliers of a generic medicine are located in the United States -- or in Europe. So what Karl Rove and Pascal Lamy have given us is a system leaves millions at risk, for no good reason, other than to make a handful of drug company executives happy.

In December 2005 in Hong Kong, the WTO will debate whether this waiver, which is now temporary, should be made permanent, either in its current form, or with changes. If the waiver is not changed, it will present a risk to the public health of millions of persons.

People need to remind themselves what happens when there is a scarcity of life saving technologies available. Not everyone got out the Titanic alive. Not everyone was evacuated from New Orleans. Not everyone was treated for anthrax poisoning (remember the working-class mailroom workers?). Not everyone who has AIDS can afford high drug prices. If elites are willing to take risks on shortages of medicine, it is partly because they are more confident they will find a way to get what they need, when they need it.

Our letter to current USTR head Rob Portman is here.