On May 19, 2015, Bloomberg reported that a sizable number of President Barack Obama’s own party colleagues, besides teachers, seniors, Internet freedom groups and nuns, have joined the push to defeat the proposed Trans-Pacific Partnership (TPP) treaty.
Before I delve into the TPP, solely from the Indian pharmaceutical industry perspective, it is worth acknowledging upfront India’s firm assertion, repeatedly, to continue with its well-thought out and robust Patents Act 2005.
Even the final draft of the National IPR policy, which is now being circulated for inter-ministerial consultations and will soon be taken up by the Cabinet, reasserted that the country’s IPR policy is fully compliant with the Trade Related aspects of IPR (TRIPS) agreement of the World Trade Organization (WTO).
In this process, global demonstration of India’s firm resolve against dilution of the country’s Intellectual Property (IP) regime, coming under any form of intense external pressure, seems to have become a model to follow for the emerging economies of the world, in general.
This trend now gets reflected from some constituents even within the United States, besides several members of the 12-nation TPP, which is a proposed regional regulatory and investment treaty, aimed at strengthening relationship on economic policies and regulatory issues between the member nations.
Publicly articulated key objectives of the pact are to significantly reduce tariffs between the member nations and open up trade, boosting investment flows between its signatories, to accelerate economic growth.
The member countries of TPP have also agreed to work together on issues such as customs procedures, labor practices, intellectual property and competition policies.
Through its comprehensive coverage of issues and binding regulations, TPP is expected to set new benchmark for international trade. It is expected to eventually mature into a regional trade agreement covering the entire Asia-Pacific region.
However, the uneasy secrecy surrounding the negotiations of the agreement makes its critics seriously apprehensive about its impact on the developing nations of the world. This is because; the concerned delegates of the negotiating team always remain tight lipped about the progress made in coming to an agreement on the scope of the pact. This information is critical for assessment of direct and indirect global impact of TPP on the trade, economy and society, in general.
According to reports, TPP members, such as, Brunei, Malaysia, Singapore and Vietnam are negotiating hard to get incorporated somewhat similar to Indian IP rules in the TPP agreement.
Besides the above countries, other members of TPP are United States, Australia, Japan, New Zealand, Canada, Chile, Mexico and Peru.
Large Asian economies are not a part:
Interestingly, large Asian economies, especially, four important members of the G20, namely, China, India, South Korea and Indonesia, are not a part of the TPP, just yet.
It is worth noting, TPP is being led by the world’s largest economy and the biggest trading nation – the United States, the country that sees Asia-Pacific as key to its future growth.
Noting all these, many experts in this field, across the world, have already raised a flag saying that the US may be trying to use TPP as a means to undermine China’s growing economic might in the region.
Many gaps still to bridge:
The real negotiations for this treaty started only in 2010 and are still continuing. However, the details of negotiations is so much shrouded under water tight secrecy, even to the lawmakers of the United States, it is indeed challenging for anyone to predict the timeframe of its coming to fruition.
Reuters reported on May 21, 2015, “Chief negotiators from the 12 TPP countries are trying to bridge gaps for a deal at a meeting in Guam that will run through to May 28, 2015. But ministers would need to meet to clinch an accord,”
In this article, I shall only focus on the possible impact of this pact on the access to medicines, especially in the developing world.
Leaked drafts of TPP negotiations:
As the progress of negotiations of this pact continue to remain under uneasy secrecy, on November 13, 2013, WikiLeaks released the secretly negotiated draft text for the entire IPR Chapter of the TPP.
30,000-word IP chapter of the leaked documents, besides others, reportedly contains proposals to increase the term of drug patents beyond 20 years, and lower global standards for patentability.
TPP and patents:
When it comes to the issue of access to affordable medicines for a vast majority of the global population, the overall patent ecosystem of a nation and how evergreening of patents with monopolistic high pricing are addressed, automatically enter into the broader framework of intense public and stakeholders’ discourse.
Article 8.1 of the draft agreement sets-forth the availability of patents, and provides that “patents shall be available for any new forms, uses, or methods of using a known product; and these may satisfy the criteria for patentability, even if such invention does not result in the enhancement of the known efficacy of the product.”
Interestingly, TRIPS agreement, on the other hand, specifies that patents are available “provided that the invention is new, involves an inventive step and is capable of industrial application.”
In that sense, the above provision in the Article. 8.1 is quite inconsistent with the patent laws of many TPP member countries, and especially India.
Consequently, experts have raised serious concerns about the impact of TPP on the IP laws of a country, in general, as it may extend the scope of drug patents, preventing free distribution of cheaper generic drugs to the needy patients.
Impact on access to medicines:
As stated earlier, there have been serious apprehensions that TPP would adversely impact the access to medicines.
According to widely reported leaked drafts of TPP negotiations, the US is demanding aggressive IP provisions in the agreement. It is believed, if accepted, these would directly undermine public health safeguards available in international law, making it harder for TPP member countries to gain access to cheaper generic drugs.
Many experts in this field reportedly construe, these stringent IP provisions that the US is demanding may be categorized as ‘TRIPS-plus’ and have the following serious impact adversely impacting access to medicines :
- Make it impossible to challenge the validity of a patent before it is granted
- Lower the requirements for patentability, so that minor alterations of existing medicines can be given additional protected monopoly status, even if the alteration offers no therapeutic benefit
- Require the patenting of diagnostic, therapeutic and surgical methods
- Lengthen patent monopolies for pharmaceutical firms so that they keep generics out and inflate drug prices for longer periods of time
- Make it harder for generic manufacturers to obtain regulatory approval for their drugs
- Create additional monopolies based on clinical data
- Impose new forms of IP enforcement that give customs officials excessive powers to impound legitimate generic medicines
- Impose higher prices on national pharmaceutical reimbursement programs
- Allow pharmaceutical companies to sue governments and limit governments’ abilities to effectively set prices for medicines and legislate in the interest of public health.
Discord within key TPP member countries:
Though Australia is one of the key signatories of TPP, in February 2015, the Medical Journal of Australia also commented that the leaked draft of the agreement includes patenting standards that would delay cheaper drugs.
Quoting the Medical Journal of Australia, ‘The Guardian’ too reiterated: “The most recently leaked draft of the international trade deal includes provisions proposed by the US that would further protect the monopoly pharmaceutical companies hold over drugs, and delay cheaper versions from entering the market. The draft agreement sets in stone low patenting standards, which allow drug companies to practice ‘evergreening’ – when a pharmaceutical company tries to maintain its market monopoly on a drug for longer by applying for extra patents. This prevents other companies entering the market with cheaper versions of the same medicine and imposes large and unnecessary costs on the health system and consumers.”
Similarly, across Canada, people are speaking out about the TPP. They are rallying against the secrecy of the 12-country negotiations and the corporate agenda behind the deal.
On February 12, 2015 legislators in seven of the 12 TPP countries issued the following joint statement about the negotiations:
“We, the undersigned legislators from countries involved in the negotiation of the Trans-Pacific Partnership Agreement, call on the Parties to the negotiation to publish the draft text of the Agreement before any final agreement is signed with sufficient time to enable effective legislative scrutiny and public debate.”
In Canada, the federal NDP and the Green Party of Canada endorsed the above statement. It is the simplest of demands for democracy on a “trade” deal that threatens to undermine the very notion of the public good, by giving corporations more power to undermine public policy.
As stated above, Brunei, Malaysia, Singapore and Vietnam are also negotiating hard to get incorporated somewhat similar to Indian IP rules in the TPP agreement.
Though not in the areas of access to medicines, Japan too expressed its concerns on TPP impacting its agriculture sector. Protests are forthcoming in the copyrights area, as well.
Apprehensions catching-up in the US too:
May 19, 2015 Bloomberg report also indicates, specifically from the pharmaceutical industry perspective, some key stakeholders are worried about the effects of more open markets on drug pricing that could increase their costs and “Foreign corporations or subsidiaries will be able to challenge a number of public health programs.”
In a letter of May 12, 2015 to the House and Senate, the Alliance for Retired Americans has reportedly underscored the possibility of this grave danger to them, if TPP comes into effect.
On May 21, 2015, Reuters reported, just 13 out of 44 Democrats (of President Obama’s own Party) backed the legislation in the Senate’s second procedural vote on last Thursday.
Earlier, a group of over 30 legal academics reportedly sent a letter to the US Trade Representative, expressing “profound concern and disappointment at the lack of public participation, transparency and open government processes in the negotiation of the intellectual property chapter of the TPP”.
Other important areas of criticism:
Other key areas of criticism of TPP are as follows:
- Excessive emphasis on trade issues that have remained unresolved or unaddressed at the WTO due to differences between developed and emerging markets.
- Adopting a negotiating style reflecting the US regulatory approach to international trade
- Allowing companies to sue foreign governments, which would allow them to dodge health and environmental standards.
- Giving shape to a geo-political road map of the US that supports its strategic rebalancing towards Asia.
A strange mélange:
An article published in the April 9, 2015 edition of Forbes, titled “TPP Is A Mistake”, very appropriately describes TPP as a strange mélange of 12 members countries that includes five from the Americas (Canada, Chile, Mexico, Peru and the US), five from Asia (Brunei, Japan, Malaysia, Singapore and Vietnam), along with Australia and New Zealand.
In terms of populations, the total American contingent which stands at 535 million, more than half the total population of the Americas (947 million), is significantly larger than the Asian population figures which amount to no more than 256.6 million (285 if one adds Australia and New Zealand), compared to Asia’s total population of 4.3 billion: almost half of the Asian contingent is accounted for by one member – Japan, the articles states.
In this article, former Malaysian Prime Minister Tun Dr Mahathir Mohamad, the architect of Malaysia’s impressive economic growth and development during his tenure from 1981 to 2003, was quoted saying:
“The strongest campaigner of TPP is America … which seeks … to contain China and to safeguard its own economic interests by exploiting all resources from small but growing independent nations such as Malaysia”.
He further adds, “TPP is not a fair or free trade partnership, but an agreement to tie down nations with rules and regulations that would only benefit American conglomerates”.
Is TPP more than just a trade agreement?
Many experts feel, that TPP is basically a geopolitical tool to contain China with ‘trade’ as its façade.
The votaries of TPP argue that it aims to achieve a very high standard trade agreement and thus the reason of keeping China out of it is not geopolitical. Other Asian nations, including China, can apply and qualify for membership once they commit to meeting these high standards, they reiterate.
The above argument does not seem to be a robust one, as that would mean, a sizable proportion of its smaller current members, such as, Vietnam, already conform to so called ‘high standards’, as required for the TPP agreement.
Besides geopolitical issue, many are also questioning whether TPP is what the developing countries need, especially, at this stage of their development.
One may quite pertinently ask, in what way TPP is relevant to India?
TPP is relevant to India in the sense that it is expected to eventually mature into a regional trade agreement covering the entire Asia-Pacific region.
Be that as it may, if I restrict myself only to the drug patent related area of the proposed pact, it appears, unless the damaging provisions in the concerned chapters are removed through negotiations before the agreement is finalized, the TPP would possibly turn out to be the most harmful trade pact ever, especially from the perspective of access to medicines in the developing countries of the worlds.
May 2015 issue of ‘amfAR’ – The Foundation for AIDS Research based in Washington DC of the United States captured the essence of possible healthcare related issues with TPP – the pact of a strange mélange of 12 member countries, with the following words:
“By providing avenues for pharmaceutical companies to extend IP protection beyond what is required by current international standards, the TPP could greatly delay the entrance of generic competition for much-needed medicines and keep prices high. Doing so would continue an unacceptable and dangerous trend of irrevocable expansion of IP protections at the expense of access to medicines and would serve as a justification for even more aggressive measures in future FTAs.”
By: Tapan J. Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.