US-Thai Free Trade Agreement Threatens Access to Essential Medicines

The Oblate JPIC Office is monitoring the US-Thai Free Trade Agreement (FTA) which is currently being negotiated. We are particularly concerned about provisions of the draft agreement that would make HIV/AIDS and other essential medicines prohibitively expensive. Negotiations were put on hold after the military coup of September 19^th, 2006 until a democratically elected government is in place in Thailand. Negotiations were difficult, though, in part because the Thai government was reluctant to accept the stringent - and expensive - protections for essential drugs.

In an unprecedented effort to stem the spread of HIV/AIDS in that country, the Thai government has increasingly been providing necessary medicines free of charge to Thai people living with the disease. Its ability to do this has depended on a supply of HIV/AIDS drugs at generic (cheaper) prices. But, the proposed terms of the US-Thai FTA include provisions highly favorable to US pharmaceutical companies which would change this. The newer ‘second-line’ and ‘third-line’ treatments, essential to patients as they develop immunity to the first-line treatments, would be prohibitively expensive for many years.

The FTA includes what are called TRIPS Plus provisions, measures that exceed the internationally-negotiated Trade-Related Aspects of Intellectual Property Rights Agreement at the World Trade organization (WTO). These new rules would include the following:

·        Longer patent terms. The Thai government would be required to extend patent protection for five years beyond the maximum 20 year-period established under TRIPS, to take account of delays in granting the patent or granting marketing approval. The problem, AIDS advocates say is that often, drug companies wait to apply for a patent in a developing country until their patent is almost expired in their primary market, the developed countries. Thus the pharmaceutical companies would receive an additional five years of patent protection their secondary markets. Extending this monopoly period would further delay the introduction of affordable, generic medicines, denying treatment to many.

·        Data Exclusivity. The data here refers to information collected in the process of clinical trials to prove a drug’s safety and efficacy. Generic drug manufacturers rely on the existence of this data when they apply for marketing approval from drug regulatory authorities for a generic drug that has already been shown to be equivalent to the brand-name drug. Generic drug manufacturers cannot, as a matter of economics or ethics, repeat the costly and time-consuming tests, which require some participants to take a placebo instead of the drug which has already been proven to help their condition. These data exclusivity provisions would also threaten the ability of a country to issue a compulsory license. A compulsory license allows a country to produce a drug at generic prices even though a patent is still valid: no authorized generic product would be able to enter the market in a timely way because the compulsory license would not override the data protection provisions. In other words, the generic company would not be able to gain approval for production of the drug, even if the government had ordered its production under emergency conditions, because the generic company would not be able to submit test data quickly to prove the drug’s safety and efficacy, the only test data available being off-limits, according to the terms of the bi-lateral FTA.

·        Linkage between marketing approval and patent status. This means no generic drug can obtain marketing approval from governmental authorities while a drug is under patent protection. This provision also makes the regulatory authority into patent police: the authority must report any efforts to obtain marketing approval to the drug company holding the patent. This is highly unusual.

These exclusive marketing provisions, ‘data exclusivity’ and extended patent protection would make generic competition impossible during this extended period of intellectual property protection, making the newer second- and third-line HIV/AIDS drugs prohibitively expensive.  A recent World Bank study estimates that in ten years, the increased cost of these stepped-up HIV/AIDS treatments alone would consume a quarter of the Thai Health budget, seriously affecting the government’s ability to deal with the growing HIV/AIDS crisis.

The pharmaceutical industry has been pushing hard for these intellectual property protections, which go well beyond those negotiated at the international level. This is so, despite the fact that pharmaceutical corporations make only 5-7% of their profits in developing country markets.  It must be asked what is more important, the profit of drug companies, or the lives of people.