Copyright 1999 Federal Document Clearing House, Inc.
Federal Document Clearing House Congressional Testimony
July 22, 1999
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 1610 words
HEADLINE:
TESTIMONY July 22, 1999 JOSEPH PAPOVICH HOUSE GOVERNMENT REFORM
US ROLE IN COMBATING HIV/AIDS
BODY:
TESTIMONY ON
THE PROTECTION OF US INTELLECTUAL PROPERTY ABROAD, PARTICULARLY WITH RESPECT TO
COMBATING THE GLOBAL HIV/AIDS EPIDEMIC House Committee on
Government Reform Subcommittee on Criminal Justice, Drug Policy and Human
Resources July 22, 1999 Mr. Chairman: Thank you very much for inviting us to
testify at today's hearing. This hearing focuses on a topic that is of crucial
importance to the health and future of millions of people in
Africa and elsewhere: the role of our policy in ensuring access
to effective medicines for AIDS and other illnesses. The
Administration, together with our partners in Africa and around
the globe, has developed a policy which ensures access to current medicines to
treat AIDS, while providing the incentives that will speed the
development of effective medicines that in the future have the potential to cure
or prevent the disease. THE "TRIPS" AGREEMENT AND "SPECIAL 301 In the so-called
Uruguay Round negotiations that established the World Trade Organization, a top
priority for the United States, as the world's leading exporter of creative and
innovative products, was to secure adequate and effective protection for all
forms of intellectual property, including patent protection for American
pharmaceuticals worldwide. In this we succeeded: all WTO members, over varying
transition periods, committed to this, through the Agreement on Trade-Related
Aspects of Intellectual Property Rights (or "TRIPS"). Over time, the result will
benefit both producers and users as, in the case of pharmaceuticals, companies
in the U.S. and overseas are given greater incentives to research and produce
new medicines to continue the fight against disease. An important component of
USTR's policy is the so-called "Special 301." Under the Special 301 provisions
of the Trade Act of 1974, Congress directed USTR annually to identify foreign
countries that deny adequate and effective protection of intellectual property
rights and to issue a public report to this effect at end of each April. In the
report, countries are placed on lists, ranging from most egregious, where trade
sanctions may ultimately be involved if significant problems are not resolved,
to a priority watch list or to a watch list, where we monitor the situation and
urge improvements in protection. Congress amended Special 301 in the Uruguay
Round Agreements Act to clarify that a country can be found to deny adequate and
effective intellectual property protection--and thus placed on one of these
lists--even if it is in compliance with its obligations under the TRIPS
Agreement. Each year USTR, in consultation with other agencies, examines the
level of intellectual property protection afforded by our trading partners. We
analyze legislation, enforcement activity, and market trends to arrive at our
determination. We draw on the reporting from our embassies and consulates
overseas, but we also receive input from industry associations, individuals, and
even foreign governments. In some instances, we agree with the recommendations
of those outside of the government; in others we do not. For example, during
this year's Special 301 review, there were recommendations to designate South
Africa as a "Priority Foreign Country," which could have
resulted in trade sanctions. We chose not to do so, however, because we did not
agree with their assessment of the magnitude of the problem and because we had
already developed a framework to resolve our differences, which we are confident
will work. PATENT POLICY The objective of intellectual property protection is
focused on ensuring incentives for research and development, so that drugs can
be developed. Nevertheless, the application of our intellectual property policy
is sufficiently flexible to react to legitimate health care crises. Until the
recent development of protease inhibitors and other highly sophisticated
medicines, many considered AIDS to be invariably fatal. While I
lack the expertise to speak about the specifics of these new medicines, their
development has given new hope to many millions of people living with HIV. The
Administration's approach to patent protection is to ensure that the necessary
incentives are provided to promote rapid innovation of new drug therapies and to
ensure the protection of the medicines which now exist. Patent protection is
essential to encourage rapid development of new and more effective drugs to
treat A-EDS and to the commercialization of those drugs. Together with
government investment in research, private sector incentives for research and
development are critical to develop new treatments for AIDS as
well as other diseases. To effectively remove patent protection for such
treatments would ultimately be to delay the discovery, production and
distribution of medicines which could go beyond treatment to prevention and
cure. Our goals in the area of patent policy for pharmaceuticals are
complemented by the Administration's efforts to address the
HIV/AIDS crisis around the world, including in
Africa. Our efforts in this regard are varied and extensive. As
my colleagues have testified, we are active on a variety of fronts to combat
this disease. Most recently, on Monday of this week, the Vice President
announced a new $ 100 million initiative to help fight AIDS in
Africa. We are also seeking to help developing countries create
the public health infrastructure that will allow AIDS
treatments to be utilized effectively. This includes not only adequate
investment in prevention efforts, clinics and medical equipment, but continuous
monitoring of treatments to ensure that no contamination occurs and that
medicines are administered at the time and with the appropriate dosage. Without
such infrastructure, there is significant risk that pharmaceuticals, including
antibiotics and HIV drugs, may not be administered to patients correctly. This
poses dangers not only to individual patients but the wider community, as
without proper administration bacteria and viruses will mutate, creating
powerful new forms of drug-resistant organisms. THE SOUTH AFRICAN CASE And this
brings me to the specific case of South Africa. We acknowledge
the serious health care crisis in Africa, including in South
Africa. Moreover, we appreciate that the government of South
Africa has undertaken to improve access to quality health care
for all its people. This is a goal we and the entire Administration fully
endorse and support. We believe that this goal can be achieved while promoting
adequate and effective patent protection for pharmaceutical products. Our goal
is to chart a course that assists in improving access to affordable medicines,
while not freezing the financial incentives that fuel continued research and
production of new drugs. With a shared commitment to improve health care and
provide intellectual property protection we are continuing our efforts to find
common ground. That said, we have been working with South
Africa to try to ensure that its new Medicines Act can achieve
its intended goal, while being applied in a TRIPS-consistent manner. We believe
that both of these goals are achievable, and we are working with South
Africa to ensure that the Medicines Act will be
TRIPS-consistent. Indeed, we have been fully engaged in trying to clarify these
matters with South Africa, with the goal of ensuring that the
South African government has the full ability to address AIDS
and other health issues in a manner consistent with its WTO obligations. In
August of last year, the Administration proposed a framework for resolution of
our differences concerning South Africa's Medicines Act. The
intent of the proposal was to bring together an experts group including all
relevant decision makers - trade, health, and intellectual property - to reach
our mutual goal of bringing better healthcare to the people of South
Africa while assuring effective and adequate protection of
intellectual property. Although neither government-to-government nor industry-
to-government discussions have resulted in a resolutions of the differences that
exist, we are encouraging continued dialogue to find a solution that ensures
that the health concerns of South Africa can be addressed in a
TRIPS-consistent manner-both of which are achievable. The TRIPS Agreement has
specific rules that govern compulsory licensing, which are
expressed in Article 3 1. The Agreement establishes specific conditions that a
WTO member must follow if it authorizes use of a patent without the patent
owner's consent. For example, a WTO member may grant a license to a party
without the patent owner's consent, but only on a case-by-case basis, normally
only after the proposed user of the patent has been unable to obtain a license
on a voluntary basis on reasonable commercial terms. The latter requirement may
be waived in a "national emergency," but other conditions apply. The South
African Medicines Act does not provide for any of these conditions and no
regulations have been issued that would ensure that the TRIPS Agreement's
requirement would be met. We realize that AIDS is a special
case which may require special measures. Thus, while we do not believe that
compromising intellectual property rights is the solution to the greater
problem, contrary to our general approach, we raise no objection to
compulsory licensing or parallel importing of pharmaceuticals
on the part of South Africa, as long as it is done in a way
that complies with TRIPS. Of course, we are also committed to working with South
Africa to ensure the safety and efficacy of pharmaceutical
imports. This is the policy of the Administration.
LOAD-DATE: July 26, 1999 
