Wealth versus health – the Thai frontier

Roger Tatoud
16 July 2006

In the battle against HIV and AIDS, Thailand has been exemplary: since 2001, the AIDS death rate there has fallen by 79 percent, thanks to the supply of low-priced locally produced generic drugs and the 30-Baht universal health care scheme. But this success story is about to be challenged by the United States-Thai Free Trade Agreement (FTA) currently under negotiation, which includes restrictive intellectual property rights, and will put at risk the survival of hundreds of thousands of Thai people living with HIV, and beyond Thailand, the survival of millions who will be affected by the Thai precedent.

The well being and lives of 600,000 Thais living with HIV (of whom 200,000 are women and 12,000 children) depend on readily available and affordable antiretroviral therapies. Currently, only 80,000 people have access to life-prolonging treatments, with a government target of 150,000 by 2008. If signed and implemented, the FTA would cover issues including trade liberalisation, services and investment, and intellectual property provisions, with dire, long-term consequences for the affordability and availability of drugs, especially in the case of HIV antiretroviral therapies.

Thailand and the US have now engaged in six rounds of negotiations. The last round, held in January, ended in limbo because of rising political opposition, unacceptable demands from the US and a Thai delegation not prepared to meet its US counterpart of highly skilled experts and negotiators. Following the dissolution of parliament by Thaksin Shinawatra in February, Thailand's caretaker government is set to continue informal talks, amid questions over its legitimacy to do so.

This article is part of the openDemocracy debates "HIV / Aids: what policy for life?" and "Trade, Economics, Justice?"

Also by Roger Tatoud on openDemocracy:

"Gridlocking Knowledge" (July 2002)

"Genes and ownership: a scientific approach" (November 2002)

World trade and public health

The World Trade Organisation's patent rules, known as Trade-Related Aspect of Intellectual Property Rights (Trips), recognise the right of countries to protect public health. They were introduced "in an attempt to narrow the gaps in the way [intellectual property] rights are protected around the world, and to bring them under common international rules". The 2001 Doha declaration allowed flexibility in the application of Trips to ensure that medicines are available and affordable, and that generic drugs can be produced and drugs imported at a lower cost than brand versions.

The US Trade Act of 2002 instructs its negotiators to respect the Doha declaration in all trade negotiations. Yet US negotiators consistently ignore their obligations and violate their mandate by negotiating Trips-plus provisions in FTAs. These provisions extend the life span of patents on drugs from twenty to twenty-five years; require known substances to be re-patented for any new use whilst restricting the use of data previously acquired to patent these drugs; limit the use of compulsory patenting by government as a tool to ensure access to low cost medicine; and aim to turn the drug regulatory authorities into patent enforcers for pharmaceutical companies. Extending the life span of patents (through evergreening and "frivolous patenting") will delay the production of generic products, as will measures that require the repetition of clinical trials prior to patenting new applications of old drugs. Restrictions on the licensing of drugs reaching the end of their patent period will lead to delays in their marketing.

The production of generics is essential in the struggle with the pharmaceutical industry to lower the cost of treatment. Brazil, which adopted a hard-line attitude in fighting the HIV epidemic, was successful in bringing the price of first line treatment from US $10,439 to US $152 between 2000 and 2004. However, AIDS is a chronic disease and the challenge will become more prominent with second, third and fourth generation antiretroviral therapies (ART), which are more expensive and protected by recent patents. Since it will be necessary to move from one line of treatment to another with the development of drug resistance, the cost of treatment may rise from a current $470 per patient per year to $7000. Fourth generation ART may bring the cost up to $30,000 per patient per year in the absence of competition, generics or other provisions ensuring drug availability for all within government budget. (Brand-name versions of some first-line AIDS drugs in Thailand are between 5.6 and 25.8 times higher than the prices of generic versions.) Such costs put these medicines out of reach for a country like Thailand.

Medecins Sans Frontieres (MSF) warns countries negotiating trade agreements with the United States against provisions that will dramatically reduce their ability to provide low-cost quality medicines for their citizens. Such restrictions will have long-term effects and will not be limited to HIV/AIDS. Oxfam observes that "the case of HIV/AIDS in Thailand illustrates how unnecessarily strict intellectual property protection could block access to medicines. But the problem is not limited to this disease. Thai people need other medicines to treat diseases such as pneumonia, gonorrhoea, and cancer. The rising incidences of resistant infections and of chronic disease also require new, effective, and affordable medicines. Many of these medicines are, and will be, under patent and therefore too expensive for those who need them."

Methods and motives

Beyond the life-threatening limitations introduced by the Trips-plus provisions, the methods and the motivations behind their introduction are questionable too. In December 2005, during Thailand's National Technical Consultation on FTAs and intellectual property, sponsored by the United Nations Development Programme, Carlos Correa of the University of Buenos Aires observed that the United States' strategy is to leave the issue of intellectual property to the very last stage of the negotiations, after other compromises have been reached. Only then are the Trips-plus provisions put on the table, when it is too late to re-negotiate the whole package. He also pointed out that some of the Trips-plus provisions go beyond US patent legislation and that the industry is using the FTAs to further tighten US legislation. Nevertheless, similar agreements have been signed between the US and other countries such as Vietnam, Lao PDR and Singapore.

During the negotiation of previous free trade agreements, no attempt was made to hide the close ties between US trade representatives and the pharmaceutical industry. A glance at the composition of the US-Thailand Free Trade Agreement Business Coalition, which is "strongly committed to promoting the negotiation, passage, and implementation of a meaningful and comprehensive bilateral FTA between the United States and Thailand", is worth many words.

The US shows a trend towards increasing the number of Trips-plus provisions in trade agreements. The US-Vietnam FTA signed in 2000 included only a data exclusivity provision, while the 2004 US-Bahrain FTA included in addition to this provision an extended patent period for each new indication (even when registered abroad), an extended patent term, and a "linkage" provision which prohibits the Drug Regulatory Authority from registering a generic version of a medicine that is still protected by a patent. Hence, for each new FTA signed, the United States is adding further restrictions that contravene the spirit of the Doha declaration and threaten further people's lives. MSF concludes that, "the pharmaceutical industry in wealthy countries has refused to accept the primacy of health over commercial interests ... Under pressure from industry, wealthy countries, and the United States in particular, have been using bilateral and regional trade agreements to negotiate provisions which go beyond the WTO's TRIPS Agreement ("TRIPS-plus"), which undermine the Doha Declaration and which restrict, if not eliminate, the flexibilities and safeguards it reaffirmed."

In 2005, when asked if the US would agree to a deal that does not include its proposed patent provisions, US spokesperson Neena Moorjani replied that "we have not concluded any previous FTAs that did not include these provisions. US FTAs maintain the same standards no matter which country we are negotiating with". Standards built step-by-step on previous free trade agreements, each creating a dangerous precedent for the next.

Saying no

After the collapse of the last round of negotiations, American businesses offered to "help" in lobbying the US Congress to allow talks on the Thai-US free-trade agreement to move forward, with overt intimidation that "the prolonged delay to the negotiations will discourage world-class companies from opting [to invest in] Thailand". Thailand still has several options when the next round of negotiation opens. The Thai representatives should not let themselves be bullied by the US negotiators and should push their agenda forward, as did Colombia, Brazil and Malaysia. Most importantly Thai negotiators and the government should make the matter public. One of the major obstacles in addressing this issue has been the negotiating process's lack of transparency and therefore the absence of public debate. The participants in the National Technical Consultation made ten recommendations to Thai negotiators, including building on existing studies assessing the impact of Trips-plus provisions and drawing on the technical expertise of relevant international organisations.

In this regard, Malaysia's experience is of particular interest: by issuing compulsory licenses for the import of HIV medicine, the Ministry of Health successfully reduced the cost of the monthly treatment from US $261 to US $41. Likewise, changes in India's Patents Act allowed Indian manufacturer Cipla to supply African developing countries with inexpensive import of generic drugs that cannot be produced locally. But the production of generics is not without challenges: the recent attempt by Gilead Sciences to patent the key AIDS drug tenofovir, a previously known compound, shows that the pharmaceutical industry is not giving up.

Remarkably, the role and awareness of these FTAs in US civil society is crucially lacking, judging by the poor coverage of these issues in mainstream printed media in the US. If US citizens were informed of the practice of the FTA negotiators and of the consequences of these agreements, that go far beyond Thailand and have an impact back home, Thai negotiators may have more leverage in the forthcoming negotiations and be better equipped to resist an agreement that will seriously impact people's access to medicine, prevent the scaling up of HIV/AIDS programmes, undoubtedly increase disease-related death rates and create a huge burden for the national health budget.

Ultimately, the Thais still have the option to give a polite "No" to the US Free Trade Agreement, as Thailand has been TRIPS compliant for a long time and investment will still come to this part of the world where the future of business belongs, FTA or no FTA. This FTA will have a significant impact on all future FTAs and it is worth watching closely the next round of negotiations to ensure that access to life-saving medicine remains a fundamental right for everybody all over the world.

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