TWN Info Service on Free Trade Agreements

14 July 2006

South China Morning Post - Wednesday, July 12, 2006
Thai-US FTA, Public Health and WHO



When US negotiators arrived in Thailand in January for the sixth round of bilateral talks with the country, up to 10,000 protesters were ready for them. United by their opposition to the free-trade agreement being drafted behind closed doors, dozens of civil-society groups gathered outside the Sheraton Hotel in Chiang Mai, where the talks were being held.

Amid angry scenes, and despite a huge police presence, protesters broke into the hotel and disrupted the trade talks, which were later moved outside the city. It wasn't quite a knockout blow, but there was no ignoring the message: the activists did not buy Prime Minister Thaksin Shinawatra's claim that the agreement would be a win-win deal for everyone.

Among the most vocal were representatives of HIV/Aids patients in Thailand. US demands for tougher rules on patented drugs and controls on their compulsory licensing - so-called generic copies - had serious implications for their care. Without low-cost alternatives to imported branded drugs, it was hard to imagine how Thailand could afford to treat its HIV-positive population, now 600,000 and rising.

Into the fray stepped Dr William Aldis, the World Health Organisation representative to Thailand.

A US physician who had spent the previous decade running the WHO's emergency response unit in Africa, Dr Aldis moved to Thailand in late 2004 to begin the usual four-year posting. He quickly found himself in the thick of tsunami relief and racing to stay on top of the unfolding bird-flu crisis. Dr Aldis was also keeping an eye on the US-Thailand trade talks.

He shared the concerns of international public health experts who had studied recent US trade pacts and concluded they hampered the ability of countries to license lifesaving medicines, such as antiretroviral drugs to treat Aids patients. So he decided to speak out publicly on the issue.

It was a move that is said to have triggered his abrupt recall from Thailand, after a rebuke by the US government, and sent shockwaves through the WHO and other international agencies. Disgruntled WHO officials said the "punishment" meted out to Dr Aldis smacked of political interference by the US pharmaceutical industry, which had lobbied for stricter intellectual-property rights.

The row came as the WHO was gearing up for a change of leadership after director-general Lee Jong-wook died in May of a brain haemorrhage. While Lee won plaudits for steering the WHO during high-profile crises, including the Sars outbreak in 2003, critics inside and outside the organisation faulted him for caving in to political pressure. A new director-general is due to be selected in November.

"The greatest concern in the WHO under Lee was to ensure that certain member countries weren't upset," said a senior WHO official in Geneva. The treatment of Dr Aldis "is a disturbing sign of things at the WHO".

What got Dr Aldis into trouble was an opinion piece published on January 9 in the Bangkok Post that described a US-Thailand free-trade agreement as a potential disaster for public health. Giving up Thailand's rights to waiver pharmaceutical patents on lifesaving drugs "would put at risk the survival of hundreds of thousands of Thai citizens", and could bankrupt Thailand's subsidised health-care system, he warned.

"Restrictive intellectual property rights will prevent Thailand from using locally produced affordable generic drugs ... the accumulated financial strain on the national health budget would be untenable," he wrote.

Suspecting it would be watered down, Dr Aldis didn't clear the article with his bosses in Geneva. On March 23, a US ambassador to the United Nations complained to then-director general Lee about the critical article and said the WHO should remain "neutral and objective".

The following month, Dr Aldis was recalled from his post in Bangkok and assigned to a research position in New Delhi. WHO insiders said it was described as a promotion, but immediately smelled fishy, given that Dr Aldis had completed only 16 months in Thailand. Such a move was normally only initiated on grounds of corruption or gross incompetence, insiders said.

Harsaran Pandey, a spokeswoman for the WHO in New Delhi, declined to give a reason for the recall. "As international civil servants, all of our positions are transferable. William Aldis was transferred from the country office to the regional office," she said.

In an e-mail, US Department of Health spokesman Bill Hall confirmed that the US had objected to the Aldis editorial but denied any interference in the WHO's affairs. "We made no suggestions or recommendations to Dr Lee or any other WHO official on how the WHO might address the matter ... Whatever transpired afterwards was purely a matter internal to the WHO."

Dr Aldis, who joined the WHO in 1993, said he was still in the dark about his recall. "I've been given no information about my removal and how it relates to the FTA," he said in an interview with the South China Morning Post.

Thai health activists urged the WHO to come clean on the reason behind the recall of its representative. "It's not only bad for him, it's bad for the Thai people," said Jiraporn Limpananont, professor of pharmacology at Bangkok's Chulalongkorn University and a critic of the US-Thailand trade agreement. "As a representative of the WHO it's his duty to make sure people are healthy and have access to medicine."

Negotiations on the agreement were suspended in March after Mr Thaksin dissolved parliament and called an election that was later annulled, leaving a political vacuum. US and Thai trade officials on Monday discussed plans to resume the talks.

International campaigners who monitor intellectual property rights in trade agreements said Dr Aldis was simply echoing the general view among WHO member countries on access to vital medicines. The fact that he was shot down for his comments signalled a retreat by the WHO in the face of US pressure and boded ill for future health emergencies, they said.

"It's quite unbelievable. What this article said was exactly in line with official WHO policy on this issue. The WHO is advising countries to make use of exclusions to patent laws," said Ellen `t Hoen, director of policy advocacy at Médicins San Frontières in Paris. She said the WHO should reaffirm its stance under its next leader and not be pushed around by the US or other member countries. "You need a leader who has the courage to stand up on this issue and be an advocate for public health, not sit on the
fence," Ms `t Hoen said.

With the World Trade Organisation paralysed by divisions over rich-nation agricultural subsidies, the US has pursued bilateral trade deals in Latin America and Asia. Intellectual property rights, often among the most contentious negotiating points, are usually left until the final rounds of trade talks.

US negotiators said that without enforceable patents, its pharmaceutical industry would not have sufficient financial incentives to create drugs to treat HIV/Aids as well as other diseases such as tuberculosis and hepatitis.

As more patients become resistant to the latest medicines, such as retroviral combinations, demand for newer drugs is increasing. That means more resources need to be committed to their development.

At a press conference after the Chiang Mai talks, assistant US trade representative Barbara Weisel denied that prices for HIV/Aids medicines would skyrocket under the proposed US trade terms. The big challenge now, she said, was to produce the next generation of drugs. "Clearly, having access to the newest medicines is critical. But without any incentives to develop these medicines, there will be fewer new drugs to access. We believe we have struck a careful balance between these twin priorities," she said.

Critics contend this balance already exists. In 2001, the US was among 142 countries that signed the Doha Declaration, which confirmed the rights of poor countries to override intellectual property laws for emergencies. Few countries have done so, but the declaration has often been used by governments to persuade foreign drug companies to lower prices on their branded products.

Thailand is frequently cited by health officials as a country that has successfully developed low-cost alternatives to patented drugs. Until 2002, when the state-run Government Pharmaceutical Organisation began producing a single-dose cocktail of antiretroviral drugs, it cost more than US$10,000 a year to treat one Aids patient with branded drugs. The generic version brought the price per person down to US$372.

The result is a massive expansion in coverage: Thailand now treats more than 80,000 HIV sufferers, a number forecast to rise to 150,000 by 2008.

"In order to make drugs accessible, the key is affordability. It's been shown that when there's competition in the market, especially with generic producers, the price drops," said Matthew Coghlan, regional trade policy officer for Oxfam America.

Thailand didn't need to override any patents because the drugs used in its generic version were invented before 1992, when its patents law was amended to include such products. But procurement of newer, second-line Aids drugs is constrained by patents that will be greatly enhanced under the proposed US trade agreement. Unless they can be produced locally, or imported from other low-cost producers, Oxfam says fewer people will receive the drugs they need to stay alive.

Given that drug companies spend far more money on marketing and lobbying than on research and development, the insistence on stricter patents on lucrative Aids drugs leaves a nasty taste in the mouth of some health officials. "The drug companies can have their 50 per cent margins," said a senior WHO official. "Hell, they can have their 100 per cent. It's the 1,000 per cent margins that get me angry."



In 2001, after years of fierce debate over the cost of drugs for treating HIV/Aids in the developing world, the World Trade Organisation adopted a resolution to allow poor countries to prioritise patients over patents in providing vital medicines. Specifically, the WTO ruled at a meeting held in Doha that governments can make or import copies of branded drugs, provided they compensate patent holders.

But health charities warn that the Doha Declaration is being undone by US trade agreements that extend the term of patents and crimp the use of generic drugs. These include a recent US free trade pact signed with six countries in Central America and the Caribbean.

A leaked document from the US-Thailand trade talks contains several demands on intellectual-property rights (IPR) that critics say would tie Thailand's hands in tackling HIV/Aids and diseases such as tuberculosis and malaria. The closed-door talks were suspended in March.

One demand is for data exclusivity, which prevents generic producers from using test data from companies that hold drug patents. Another would restrict WTO-approved rights for breaking patents to a specific "national emergency" or for non-commercial uses.

Another clause allows pharmaceutical manufacturers to extend a standard 20-year patent by tinkering with the formula of its clinical applications. This delays the introduction of generic copies that help bring down drug prices.

"The US is ratcheting up [IPR] standards with each successive trade agreement. This is the strictest so far," said Matthew Coghlan, regional trade policy officer for Oxfam America.