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The Cipro Rip-Off and the Public Health
By Russell Mokhiber and Robert Weissman
Confronted with the prospect of bioterrorism on a massive scale, the
Bush administration and the pharmaceutical industry have colluded to
protect patent monopolies rather than the public health.
When the anthrax scare first hit, Cipro was understood to be the drug of
choice for treatment. Secretary of Health and Human Services Tommy
Thompson said he wanted a stockpile adequate to treat 10 million exposed
persons. That meant he needed 1.2 billion Cipro pills (the treatment
regimen is two pills for 60 days). Bayer, which holds the disputed
patent rights to Cipro in the United States, could not meet that demand
in a timely fashion.
For the drugs it was able to supply, Bayer was charging the government
$1.89 per pill. The drugstore price was more than $4.50. Indian
companies sell a generic version of the same drug for less than 20
cents.
The U.S. government has authority, under existing law, to license
generic companies to make on-patent drugs for sale to the government.
Those companies could have met supply needs that Bayer was not and is
not able to satisfy. Generic competition might also have helped bring
prices down, though it is unclear exactly what the government would have
to pay Bayer if it bought generic versions of Cipro.
But the Bush administration chose not to exercise this authority.
Pharmaceutical industry monopolistic patent protections are so
sacrosanct, the administration decided, that even urgent U.S. public
health needs do not merit any limitation on patent monopolies.
The administration was motivated in significant part by fear that if it
authorized generic production in the United States for Cipro, it would
undermine its hand in negotiations at the World Trade Organization (WTO)
meeting in Qatar. There, African and other poor countries are asking for
a declaration that the WTO's intellectual property rules not be
interpreted in ways that undermine efforts to advance public health.
Above all, they want to clarify their existing right under WTO rules to
authorize generic production of on-patent drugs (a practice known as
compulsory licensing). The United States, pathetically, is opposing this
effort.
With the spotlight shining on Bayer's price-gouging for Cipro, the
Department of Health and Human Services had to take action. It cut a
deal with the company to lower Cipro prices, agreeing on a price tag of
95 cents a pill. That supposedly cut-rate price turns out to be twice
what the same government, indeed the same government agency, pays the
same company for the same drug under another program.
But though inadequate, the price reduction did reflect the U.S.
government's negotiating leverage -- leverage that was enhanced by the
fact that the government had the authority to turn to generic
manufacturers if Bayer refused to cut a deal.
What hypocrisy! At the same time as it leveraged the threat of a
compulsory license, the administration is working feverishly in diverse
fora -- including the WTO and the Free Trade Area of the Americas
negotiations -- to limit poor countries' effective ability to do
compulsory licensing.
It is time to reverse course, and for citizens to demand the government
prioritize public health over corporate profit.
In the United States, it is unclear how much Cipro the government should
stockpile as a public health measure. Other, off-patent antibiotics may
be superior and are cheaper. These other drugs may or may not be
effective against all strains of anthrax. What is clear is that
intellectual property issues should have no impact on public health
judgments made in this context.
Representative Sherrod Brown has introduced legislation, H.R. 3235, the
Public Health Emergency Medicines Act, that would reiterate the
government's ability to do compulsory licensing in case of public health
emergency (the government currently has this right, without regard to
situation of national emergency) and establish that compensation paid to
patent holders should be "reasonable." It lists a variety of criteria to
determine reasonability, including how much the patent holder invested
and risked in the drug's development, and how significant the government
contribution was to the drug's research and development. It also would
permit the government to authorize generic producers to manufacture
on-patent drugs in the United States for export to countries undergoing
public health emergencies. The Public Health Emergency Medicines Act
should quickly become law.
In international treaty negotiations, it is time for the United States
to stop identifying its interests only with those of the brand-name drug
manufacturers. The government should immediately cease its shameful
opposition to a declaration that the WTO intellectual property agreement
should not hinder developing country measures to protect public health.
It should agree to accept the few needed clarifications to WTO rules to
make compulsory licensing workable in poor countries over the long haul.
It should end its sneaky efforts in the Free Trade Area of the Americas
and other negotiations to impose technical rules that would impede
compulsory licensing. And Congress should deny the administration the
fast-track authority it seeks to facilitate negotiation of more trade
rules enhancing the brand-name drug companies' monopoly power.
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor. They are co-authors of Corporate Predators: The
Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common
Courage Press, 1999).
(c) Russell Mokhiber and Robert Weissman
This article is posted at:
http://lists.essential.org/pipermail/corp-focus/2001/000092.html
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