How Big Pharma Squeezes Billions from Dirt-Poor Countries - Page 2

By Jed Bickman and Walter Armstrong 10/03/11

A  cache of Wikileaks docs reveals how huge American pharmaceutical companies successfully strong-arm smaller, poorer nations to keep drug prices and profits high, often with the help of hapless U.S. diplomats.

The Paper Trail: How big Phama blithely makes billions by Strong-Arming Dirt Poor Nations. Photo via

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A generic-drugmaker would be forced to repeat the entire clinical-trials process, an immense waste of time and money since the work has already been done, in order to get stamped OK to market. This is why American diplomats sought to write in data exclusivity clauses into trade agreements with countries like India, which India has simply scoffed at, enabling the country to begin manufacturing generic AIDS drugs.

The Wikileaks documents reveal that the data-exclusivity controversy—given the intense pushback by emerging nations against granting pharma de facto monopolies even where they do not have patents over their drugs—is a concern verging on an obsession of the industry, which in turn does its best to rally in-country US officials to the issue.

But to little effect. In the Philippines, for example, was having none of Big Pharma's knowledge monopoly. The author of the cable noted drily that it was passing laws that “respect the letter but not the spirit” of TRIPS on data exclusivity and “new use patents” (patent protection for already-approved drugs that get additional OK's for new conditions, such as the antidepressant Cymbalta a.k.a. the anti-pain treatment Lyrica for fibromyalgia). In the US, when Cymbalta's antidepressant patent runs out, generic companies will cannibalize its sales with cheap versions, but the Lyrica/fibromyalgia patent will still have several years of life, so while doctors may prescribe generic Cymbalta for either medical condition, many insurance companies will not cover the generic as an anti-fibromyalgia, even though it amounts to chump change, because of Lyrica’s patent.

As the WikiLeaks memo from the Manila embassy indicates, even after a meeting with a high-level US trade official, the Philippine legislators refused to budge on the “new use patent” issue, citing India’s new legislation, which bars such foreign patents. One reportedly told the trade rep, “Is the US going to go to the mat with India over this issue?”

The case of Poland provides unique insight into the role of US diplomatic efforts in advocating for Big Pharma. Because many medicines are too expensive for Poles to purchase without government subsidies, the Polish government—like most EU nations—maintains a list of drugs that it will subsidize. Getting a drug on this list is a pharma’s top objective as it is a prerequisite for penetration of the Polish market. 

"While pharmaceutical companies often assert that they would be happy with a transparent process, even if it led to decisions not to fund their drugs, in practice they seem to resent all government measures aimed at cost containment, as these limit sales," Ambassador Ashe wrote.

When George W. Bush appointed his former Yale roommate, Victor Ashe, as ambassador to Poland, this issue became a constant demand on his time. Almost as soon as he arrived in Warsaw, the former Knoxville, Tennessee, mayor became the obedient mouthpiece of American drug companies’ interests, writing a letter urging the Ministry of Health not to lower the prices of the drugs on that list. Each year of his tenure, his office would obsess over the announcement of that list, sending detailed cables to Washington about which companies and products had gained access to the Polish market. (“None of Eli Lilly’s products were added, a blow to the company. Eli Lilly’s officials observed that the Ministry has offered no explanation.") 

Ashe’s office also had to negotiate meetings between the Ministry of Health and Big Pharma representatives about the list of subsidized drugs. The industry via Ashe complained about a lack of transparency—a legitimate concern given that not only Poland’s health ministry but that of many other countries made its decisions behind closed doors. Big Pharma is, like most industries, addicted to clear-cut quid pro quo with US elected officials, and when it encounters resistance from other governments, the industry tends to be dumbfounded.

Finally, in 2009, after Obama had been elected and Ashe was packing up his office, he sent a remarkably blunt cable to Washington lamenting the unreasonable avarice of US pharma companies in the face of grave budget constraints for health care: "The situation in Poland should be assessed in light of the general European background. While Polish spending on health care has been increasing (Poland now spends…about $3 billion on pharmaceuticals), the cost of pharmaceuticals also continues to increase. The Polish government has to make tough policy choices regarding which drugs to fund, and at what level. While pharmaceutical companies often assert that they would be happy with a transparent process, even if it led to decisions not to fund their drugs, in practice they seem to resent all government measures aimed at cost containment, as these also inevitably limit drug companies’ sales."

Although this cable is striking for its candor, it cannot be dismissed as the ranting of a disgruntled outgoing official; rather, this is the conclusion reached by a thick-skinned US politician whose tolerance for industry profiteering was simply exhausted by Big Pharma.

When price or patent negotiations between a pharma and a nation fail, and the nation lacks the purchasing power to access essential medicines, TRIPS allows it to institute a “compulsory license”—to shred the patent if the disease, left untreated, constitutes a public-health emergency. Such an action routinely sparks dire ire from American diplomats, as it did in Thailand, when the Thai government broke the monopoly on a prohibitively expensive HIV drug and instead imported a cheap Indian version. Offended that Thailand resorted to this option without first entering into price negotiations with the drugmaker, the US embassy began to pressure the Thai government to do so. The cable is frank about how this action would be perceived by the Thai people: “Their [for-profit medicines providers] role in saving lives through innovation has been almost totally obscured, replaced with the image of rich foreigners taking advantage of sick, defenseless Thais. Taking control of technology through a CL is, in this climate, perceived as a brave (and virtuous) act.”

In nasty retaliation, the US government placed Thailand on a “watch list” for countries that violate international trade rules, a punishment that could have serious negative effects on its economy. In 2008, a new “pro-business” Thai government assumed power, and on its first day in office, agreed to review the compulsory licenses. 

The most arresting of the WikiLeaks cable may be the one from the US embassy in Venezuela, alerting the State Department to a threatened move by the loose-cannon socialist President Hugo Chavez to trash the intellectual property rights of all pharmaceutical products by publicizing on the Internet the technical information contained in each patent. Such a move would have made the molecular engineering involved in many brand name drugs available worldwide—an open source of pharma secrets. But as is so often the case with Chavez, his fighting words carry little force. Yet many Venezualans were outraged at the what the WikiLeaks cable revealed about US efforts at intervention.

Dr. Drummond Rennie, the deputy editor of the Journal of the American Medical Association and a professor of medicine at the University of California, San Francisco, said, “What worries me is the monolithic overuse of power to push pills. That’s not a future we should encourage. It’s the worst possible future.”

James Love is worried about this projection of American power abroad. As he said, “I think it’s just horrible. Everybody has their own take, and some people [in the US] don’t care about the lives of people in developing countries. I think it says something about us as a people.”

Jed Bickman is a frequent contributor to The Fix. He also writes for The Nation, CounterPunch and other websites and magazines. Walter Armstrong is Articles Editor editor of The Fix.





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