Organic Consumers Association

US Drugs Stance Threatens WTO

Posted 01/03/2003

by the Guardian/UK

US Wrecks Cheap Drugs Deal

Cheney's intervention blocks pact to help poor countries after pharmaceutical firms lobby White House by Larry Elliott and Charlotte Denny Dick Cheney, the US vice-president, last night blocked a global deal to provide cheap drugs to poor countries, following intense lobbying of the White House by America's pharmaceutical giants. Faced with furious opposition from all the other 140 members of the World Trade Organization, the US refused to relax global patent laws which keep the price of drugs beyond reach of most developing countries.

Talks at the WTO's Geneva headquarters collapsed last night after the White House ruled out a deal which would have permitted a full range of life-saving drugs to be imported into Africa, Asia and Latin America at cut-price costs. "The United States has announced it cannot join the consensus," the Brazilian negotiator, Antonio de Aguiar Patriota, said. Sources in Geneva said last night that the negotiating strategy had come straight from the White House, with Mr Cheney seizing the reins from America's trade negotiator, Robert Zoellick. Mr Zoellick helped broker a deal on affordable drugs at the WTO's meeting last year in Doha under which developing countries were promised they would be able to override patent laws in the interest of public health.

However, America's drug industry has fought tooth and nail to impose the narrowest possible interpretation of the Doha declaration, and wants to restrict the deal to drugs to combat HIV/Aids, malaria, TB and a shortlist of other diseases unique to Africa. Trade envoys said that the negotiations were likely to resume next month, but last night's failure could push the entire Doha agreement, which covers everything from cutting farm subsidies to introducing more competition into services, to the brink of collapse. Earlier in the day America's drug industry had expressed confidence that its lobbying of the Bush administration would pay off. "I don't have any indication that the US is changing its position on that at all," Shannon Herzfeld of PhRMA, the organization representing leading US pharmaceutical companies, told Inside US Trade, the specialist trade magazine. The industry argues that it spends billions a year on drug research and that if copycat companies can override their patents and manufacture drugs at bargain prices, research will dry up.

However, aid agencies lobbying on behalf of poor countries pointed out that the cut-price drugs will only be sold in countries which cannot afford to buy them at first-world prices. They accused the White House of being in the pocket of big US drug corporations. "The joke in Geneva this morning is that they couldn't make a decision because the CEOs of Merck and Pfizer were still in bed," said Jamie Love, director of the Consumer Project on Technology, a US lobby group. "George Bush is arguing that diseases his own children receive treatment for are off limits to poor children in poor countries." Aside from HIV/Aids, drug companies do almost no research into the diseases on the US shortlist. It excludes diseases like cancer, asthma and pneumonia which are killers in the developing as well as the developed world. "The drug industry is saying that any disease that is profitable [to big pharmaceutical companies] won't be included," said Mr Love. A deal on cheap drugs is seen as essential to keep developing countries engaged in the trade round, which was started at the behest of the US and the EU just over a year ago. Guardian Newspapers Limited 2002 ###

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