Vietnam, other developing nations could lose as US seeks largesse for Big Pharma

Countries involved in negotiations for the Trans-Pacific Partnership face an aggressive American push for corporate-friendly trade rules that would force millions to pay more for drugs

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Commuters ride neat a truck carrying a poster advertising World’s AIDS Day in Hanoi. The US is seeking to hand stronger monopolies to the drug industry in the ongoing negotiations for the Trans-Pacific Partnership. Health activists say this move threatens access to affordable treatment, particularly in developing countries like Vietnam. PHOTO: AFP
Vietnamese, already squeezed by high drug prices, are likely to pay even more if their country yields to a US proposal aimed at beefing up protection for American Big Pharma in a regional free-trade pact, critics say.

The US is seeking to hand stronger monopolies to the drug industry in the ongoing negotiations for the Trans-Pacific Partnership, or TPP, according to a document released November 13 by WikiLeaks.

Health activists say this move threatens access to affordable treatment, particularly in developing countries like Vietnam.

“All of these expanded monopoly rights and enforcement powers will negatively impact access to affordable generic medicines – often for decades at a time,” Brook Baker, an expert at the US-based Health Global Access Project (GAP), told Vietweek.

“Although a few of the elite might have access to monopoly protected medicines, poor people in Vietnam will have to do without them because neither they nor their government can [afford] monopoly-priced medicines,” he said.

According to what WikiLeaks said was the draft text of a chapter of the TPP, the US Trade Representative proposes vast new protections for the multinational brand-name drug industry, health activists said after reviewing the leaked document and speaking with US and other negotiators and trade and public health experts following the negotiations.

Public health groups said the provisions would extend and strengthen existing monopolies on medicines, and restrict the ability of governments to exercise safeguards and flexibilities to protect public health and ensure affordable drug prices.

They would also delay market entry of generic equivalents of patented medicines, which would raise the cost of medicines and thereby increase private and public spending on them.

According to the leaked text, the US is also pushing for 20-year protection for patents in certain areas related to public health.

WTO rules, on which all TPP countries’ intellectual property standards are based, do not require patent protection for therapeutic, surgical, or diagnostic methods.

The TPP, a US-led trade agreement that also involves 11 other countries including Vietnam, could impose patent protection for each, enabling pharmaceutical companies to extend patent protection beyond the WTO standard of 20 years, the health activists said.

They said making the regional intellectual property rules tougher could prevent other countries like India, which is not part of the TPP negotiations, from continuing as a generic supplier to low- and middle-income countries.

The demand for generic products will become so small that the generic industry will dry up – at least with respect to newer, life-saving medicines.

“The sky is the limit when there are patent monopoly rights and Big Pharma wants to expand that sky in TPP partner countries, even ones that are still developing,” Baker said.

Bitter pill

Activists said by pressing for greater patent leeway for drug companies, the US government has once again put the interests of the drug industry above public health.

In the past decade the US has consistently demanded in trade negotiations that poor countries should introduce measures that would increase medicine prices, they said.

Oxfam, an international anti-poverty group, has warned that if these proposals materialize, they will have dire health consequences for millions of people across Asia and Latin America.

For a country like Vietnam which already wrestles to keep up with high medicine prices according to the World Bank, the effect could be crippling.

“Intellectual property rules have not yet played a major role in driving up the prices of medicines in Vietnam,” Stephanie Burgos, senior policy advisor for Oxfam America, told Vietweek

“Yet the [US] proposal would seriously constrain the ability of Vietnam to manage medicine prices in the future, and would increase the burden on the government and households to pay for medicines.”

Oxfam said thousands more Vietnamese could be pushed into poverty since they would have to choose between medicines and other basic necessities.

According to a World Health Organization report, in Vietnam patients actually 46.58 times the international reference prices for innovator brands and 11.41 times for the lowest-priced generics.

Many drugs for diseases like HIV/AIDS, cancer, and hepatitis B and C are already too expensive for most people, Oxfam said.

The TPP pact also comes at a bad time for efforts to provide universal treatment for HIV and AIDS. Up to 170,000 people still require basic treatment in Vietnam and thousands more will soon need new, patented anti-retroviral medicines as they will develop resistance to their current treatments.

The US proposal will increase the costs of these drugs too.

The problem could be exacerbated since more than 90 percent of the country’s HIV/AIDS-response funding comes from international donors, who plan to reduce or phase out projects due to the country’s new middle-income status.

The US, which currently provides more than half of the country’s HIV and AIDS treatment budget, too plans to pull the plug in 2015.

“To date no alternative sources of financing have been identified,” a joint study by the US-based NGO Doctors without Borders and Vietnam’s Hanoi School of Public Health said this year.

“In this scenario, prospects for achieving universal access to prevention, treatment, and care are significantly reduced.”

According to the latest estimates, Vietnam is among 12 countries that account for more than 90 percent of people living with HIV and has more than 90 percent of new HIV infections in the Asia-Pacific region, a UNAIDS report released recently at the International Congress on AIDS in Asia and the Pacific in Bangkok said.

“At a time at which both the government and patients in Vietnam are struggling to pay for medicines, a trade agreement that will make medicines more expensive is unacceptable,” Rohit Malpani, an Oxfam spokesperson, said.

In the name of medical innovation

The US Trade Representative has maintained there is a need for tough patent standards to “incentivize” drug companies to keep innovating.

Unsurprisingly, US pharmaceutical giants back this view, saying the American patent regime fosters useful medical innovation.

But activists reject this, holding up plenty of data that suggest otherwise.

“Drug companies spend far more on marketing than they do on R&D [research and development],” Health GAP’s Baker said.

“Even more problematically, a great deal of what is called R&D is wasteful – it is essentially research intended to support marketing campaigns, research to tweak a medicine to get another 20-year monopoly, or research to invent around another company’s block-buster drug to gain market share.”

A 2008 research paper titled “The Cost of Pushing Pills: A New Estimate of Pharmaceutical Promotion Expenditures in the United States” confirmed that pharmaceuticals spend about twice as much money marketing their drugs as they do on researching and developing them.

Much of the research pharmaceutical companies do is simply not relevant to public health concerns, a Huffington Post report said in 2011. Money pours into research to reverse hair loss, for instance, while funding for diseases that mainly affect the poor, like tuberculosis, is in perpetual short supply, it said scathingly.

Pharmaceutical insiders bristle at such allegations.

“There will always be critics,” Mark Grayson, a spokesman for the Pharmaceutical Research and Manufacturers of America (an influential drug industry lobbying group), told Vietweek.

Grayson pointed to more than 5,400 medicines under development by the pharmaceutical industry around the world, saying: “We believe that all this research is into important diseases.”

He declined to comment on the authenticity of the leaked text but stressed that “nothing in the TPP will change US AIDS policy.

“We will continue to press for the strongest standards of protection for biopharmaceutical innovation on behalf of patients and our innovators.”

‘Can’t give more’

Activists said given that the US, which hopes to conclude the TPP pact by the end of this year, is quite isolated in its proposal on intellectual property according to the leaked text, Vietnam must continue to work together with other countries and stand up strongly to pressure from the US.

“There is no reason at all for Vietnam or other developing countries to give in to the US demands, which are only promoting and protecting the interests of the multinational pharmaceutical industry and not the interests of US consumers or the US public health community, much less the interests of the Vietnamese people,” Burgos said.

Vu Tien Loc, a Vietnamese lawmaker and chairman of the Vietnam Chamber of Commerce and Industry, said in a letter to the US Trade Representative in August last year: “If the current [Intellectual Properties] Chapter Draft is passed, all chances for reducing medicines’ price in Vietnam shall be killed, and the situation shall thus be worse.

“[It] will be the main factor undermining quality of life, limiting incomes of poor people, [and aggravating] social gaps and instability.”

The most recent WikiLeaks-released text also listed Vietnam as objecting to the US proposal. But it remains to be seen how the current geo-political context will have a bearing on its final decision.

Progress on the TPP topped the agenda when Vietnamese President Truong Tan Sang visited the US last July, and has been since touted as an indication of Vietnam’s keenness to boost trade with its former foe. .

“Vietnam is committed to the TPP and this will involve some hard bargaining with the US,” Carl Thayer, a Vietnam expert at the University of New South Wales in Australia, said.

“Reformers are pursuing the TPP for what they see as its advantages, continued access to the more advanced regional economies,” Thayer said.

Last April, the Politburo, the Party’s decision-making body, also adopted a resolution on international integration, highlighting the role of the major powers and key multilateral institutions

But critics say the country could pay a hefty price for such “international integration”.

“Vietnam will be told that it is not modern if it doesn’t have strong intellectual property [IP] – this is a lie,” Baker said.

“How does it make you modern if your patients die if neither they nor the government can afford medicines?”

Activists also warned that even if the US rolls out the red carpet for negotiating partners to join the TPP pact, it could yank the rug from under them at some point.

Its tactics could consist of proposing provisions that hand a monopoly to the pharmaceutical industry and waiting until the last possible moment in negotiations, when everything else is agreed, before insisting that negotiating partners must accept its position on intellectual property protections or risk sinking the entire agreement.

“In some areas, Vietnam and other countries have already given too much,” Baker said. “They certainly can’t give more.”

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