USTR Says Its TPP Proposal On IP And Public Health Shows Flexibility

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The Office of the United States Trade Representative (USTR) yesterday issued a statement on the status of the Trans-Pacific Partnership trade agreement talks on intellectual property rights and public health, suggesting that it has put forward new ideas on the issue. The statement is worded to reflect that USTR has heard the concerns of other governments and of public health advocates, but it’s unclear if those groups will accept it.

[Update: USTR has released a corrected version of the statement, available here.]

The 27 November statement, available here, is titled, “Stakeholder Input Sharpens, Focuses U.S. Work On Pharmaceutical Intellectual Property Rights In The Trans-Pacific Partnership.”

The statement follows a leak of the IP chapter of the treaty (IPW, Bilateral/Regional Negotiations, 13 November) from August that led to an outpouring of criticism from public health groups and showed that negotiating nations were at odds on the pharmaceutical issues.

It also follows last week’s TPP negotiations in Salt Lake City, Utah (US) in which, the statement said, the US listened to the views of the other negotiators about the new set of ideas the US is proposing on IP and public health.

In the statement, USTR says it is “working to do something new and important when it comes to medicines in the TPP region: striking the right balance to make life-saving medicine more widely available while creating incentives for the development of new treatments and cures.”

USTR said its “public engagement process” helps it, and this statement is “another example of how our interactions with Congress and stakeholders has informed our thinking and helped us refine what we’re trying to do in the TPP.”

But since the TPP negotiations began in 2008, USTR has fought vigorously to keep the public from finding out what it was proposing or saying in the negotiations, and Congress has been severely limited in its participation. Now, however, USTR needs renewal of fast-track negotiating authority from Congress – in which Congress agrees to limit itself to a yes-or-no vote on whatever the administration negotiates.

In line with that, this week USTR issued a press release stating:

“For your interest, please note the publication featured by U.S. News and World Report, entitled “Don’t Waste This Free Trade Opportunity: Why Congress Must Reauthorize Trade Promotion Authority.” To view the article, please visit http://www.usnews.com/opinion/blogs/world-report/2013/11/26/why-congress-must-reauthorize-trade-promotion-authority.”

USTR noted that in October 2011, it floated an initial proposal on IP and public health, and has since taken into account the feedback it got.

“In response to that input,” it said, “we began talking with our trading partners in recent months about a new set of ideas that would give more weight to concerns of developing countries. While intellectual property issues – particularly with regard to pharmaceuticals – are some of the toughest items to negotiate, we hope these ideas will lead us to a sound solution amenable to all partners in the TPP talks.”

On access to medicines, USTR said the United States “is a leading voice both for strong IPR protections and for access to medicines for the world’s poor, including in developing country TPP partners.”

It said it is pursuing a “differential approach” that would allow potential flexibilities for countries based on their existing laws and international obligations. This reflects the May 10, 2007 bipartisan agreement in the US that was intended to allow free trade agreement partners, such as Peru, to received greater flexibility compared to more developed partners like Korea.

On biologic medicines, the US is seeking the maximum of 12 years data protection that delays generic competition. Other countries use less, some none, so a compromise is being sought, USTR said.

And on patent opposition, USTR said the government now supports patent pre-grant opposition procedures that allow third parties to formally object to a patent at the initial application phase. It said that in the TPP, the focus is on larger goals of patent quality and incentives for innovation, while ensuring medicines access.

The TPP involves 12 countries.

Fool’s Gold?

Northeastern University (US) law Prof. Brook Baker was quick to issue a statement raising doubts about the USTR proposals, saying, “its actual proposals offer modest temporary respite at best from only a small fraction of U.S. demands.”

“The U.S. is essentially sticking by all of the demands revealed in the latest Wikileak disclosures, except with respect to its grudging acceptance of pre-grant oppositions (it had previously given up demands for mandatory patents on new forms of existing medicines),” Baker said. “Required patents for new uses, required granting of patents on medicines even in the absence of improved therapeutic effects, data/regulatory monopolies on clinical trial data (data exclusivity), mandatory patents on virtually all medical, surgical, and diagnostic procedures, enhanced damages for patent infringement, mandatory injunctions, and stronger border measures will all be mandatory the minute the TPP is signed. Even more ominously, IP will remain in the investment chapter, meaning that drug companies will immediately be able to sue TPP members if the companies’ expectations of IP-based profits are thwarted by fully lawful legislative, regulatory, or judicial decisions.”

“Even more ominously,” Baker continued, “as soon as countries cross a threshold of $12,616 GNI per capita – roughly fourth of the U.S. figure, they will be required to grant patent term extensions to compensate for regulatory delays, to allow ever-greening of data exclusivity without any explicit public health safeguards, and to require drug regulatory authorities to act as patent police through registration-patent linkage.” Some negotiating developing countries are already approaching that level, he said.

“In terms of actual ‘concessions’, the U.S. has given very little except what was already on the books in the May 10, 2007 New Trade Policy that had been retrofitted into trade agreements with Peru and Columbia six years ago,” Baker said. And the price for these “temporary” concessions is the “ridiculously long” period of biologic exclusivity.

“Don’t be fooled,” argued Baker. “The U.S. is continuing to demand an IP straightjacket for all TPP members with respect to the IP terms that will become immediately effective to all parties. Moreover, the U.S. is fitting TPP middle-income countries for their future IP leg-irons. IP restraints will be a little looser in the short term, but highly constricting shortly thereafter. Monopolies on medicines will be longer, broader, and stronger. Generic competition and lower prices will be delayed. Patients will suffer and governments will face mounting costs for new medical technologies. The U.S.’s TPP transition period is fools gold.”

William New may be reached at wnew@ip-watch.ch.

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