The U.S. has long deferred to pharmaceutical companies on questions of pricing and availability of medicines. We pay the highest prices for medicines and have accepted situations where people struggle to access to needed treatments. As we try to strengthen our health system for the fight against Covid-19, this is our starting point.
Many other countries have seemed better prepared to respond to the pandemic, including by expanding access to medicines and other health technologies. Canada has passed a bill to allow compulsory licenses for patents on medical products, clearing the way for low cost generics to expand treatment. Germany has taken actions to ensure that patents will not block access to healthcare for its citizens. Costa Rica has asked the World Health Organization to create an IP pool to create an open licensing system that will create more access and affordability. Other countries have either already taken or are gearing up to take the same or similar measures to create access to treatments and enable research to facilitate a vaccine or a cure.
These types of interventions place the need for access to healthcare before the profits of pharmaceutical companies. These measures are permitted under the WTO’s intellectual property rules. Specifically, Article 31 of the “TRIPS Agreement” allows governments to issue compulsory licenses, permitting generic companies to produce copies of patented products under certain conditions, usually including the payment of royalties to the patent holder.
However, the U.S. has acted to protect the commercial interests of American drug firms, and resisted other countries’ legitimate use of compulsory licenses for medicines. It has a long history of doing this, under both Republican and Democratic administrations, through the office of the U.S. Trade Representative (USTR). One of the tools it has used is the “Special 301” provisions in the Trade Act of 1974.
Section 301 of the Trade Act authorizes USTR to seek legal and policy changes in countries perceived as denying “adequate and effective” protection of intellectual property (IP) rights. It seeks changes through the negotiation of trade agreements, by withholding negotiated trade benefits such as the Generalized System of Preferences, and through less transparent bilateral pressures. Each year it publishes a Special 301 Report, which identifies countries deemed to lack adequate and effective protection of IP, or to discriminate against firms that rely on IP protection. The Special 301 Report is essentially a blacklist of countries that will be pressured to amend their IP laws or change their enforcement policies; placement on the list alone is a type of bilateral pressure.
Many of the allegations in each year’s Special 301 Report focus on pharmaceutical patent protection. Countries that legitimately issued compulsory licenses for HIV/AIDS medicines in the 1990s and 2000s are routinely listed in the report (i.e. – Brazil, India, and Thailand).
To see how often the U.S. has targeted countries that issue compulsory licenses, we compared countries’ use of compulsory licenses with the country lists in previous Special 301 reports (see this table for the comparison). We used the TRIPS Flexibilities Database, compiled by Medicines Law and Policy. The database does not claim to be exhaustive, but it contains examples of use of compulsory licensing in 79 countries. (We dropped sub-Saharan African countries from the sample. Executive Order 13155, signed in 2000 under pressure from AIDS activists, forbids USTR from “seek[ing], through negotiation or otherwise, the revocation or revision of any intellectual property law or policy” to fight HIV/AIDS. The Special 301 Report has not included sub-Saharan African countries since.)
We found the following:
- 61% of the countries that used TRIPS flexibilities were included on the Special 301 List the following year
- 93% of people living in countries that used flexibilities are from countries that were placed on a Special 301 List the year after their government issued a compulsory license. Many of these people reside in large middle-income countries with many people in need of healthcare.
- 56% of the world’s population today live in countries that were placed on a Special 301 List the year after their government used (or planned to use) a TRIPS flexibility.
This month, USTR is finalizing the 2020 Special 301 Report as the world struggles to fight the global COVID-19 pandemic. Will it continue to target countries that use WTO-approved flexibilities including compulsory licenses to protect the health of their citizens? Will it reconsider attacking middle-income countries that use TRIPS flexibilities for access to medicines while Canada, Germany, and many others are considering the same flexibilities to fight Covid-19?
As the U.S. struggles with the global pandemic, access to healthcare and affordability of medication seem to be the one paradigm that can alleviate much of the national and global concerns. The role of the USTR via-a-vis the use of public health flexibilities should be up for a serious debate nationally. Covid-19 perhaps, is a call to reconsider the U.S. stance favoring intellectual property over human health.
