Intellectual Property: U.S. Trade Policy Guidance on WTO Declaration on Access to Medicines May Need Clarification
Published: 2007-09-28T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The WTO Agreement on Trade-Related Intellectual Property (TRIPS) requires all 151 World Trade Organization (WTO) members to provide baseline protections, including 20-year patents for innovative pharmaceuticals. The Trade Act of 2002 granting Trade Promotion Authority (TPA) to the President outlined three negotiating objectives related to intellectual property (IP). The first two aim to strengthen IP rights and enforcement abroad. The third calls for respect of the WTO Doha Declaration on TRIPS and Public Health, which addresses access by developing countries to patented medicines, particularly in epidemic and emergency situations. This report (1) describes the Declaration and its interpretation by the United States and other nations; (2) analyzes how U. S. Trade Representative (USTR) has balanced respect for the Doha Declaration with the other two IP objectives in negotiating free trade agreements; and (3) evaluates the extent of public health input by agencies and the private sector. We reviewed official WTO and U.S. government documents, interviewed U.S. and foreign government officials, and obtained private sector views.
section_title: What GAO Found
paragraphs: The 2001 Doha Declaration on TRIPS and Public Health was adopted by WTO members to stress the importance of implementing the TRIPS Agreement in a manner supportive of public health. The U.S. interprets the Declaration as a political statement that recognizes the severity of public health crises while affirming the importance of IP protection. It maintains that the Declaration neither changes existing TRIPS obligations, nor creates new rights and does not assigns public health greater priority than IP protection. U. S. Trade Representative (USTR) says the Declaration clarifies flexibilities already in TRIPS, including the flexibility to compulsorily license patents under certain circumstances. USTR recognizes these as being allowed for WTO members, including those facing public health crises, but only in a fashion that will not unduly harm patent holders. Some developing countries assert they provide broad discretion to ensure access to medicines when IP regulations present barriers to affordable care. USTR balances respect for the Doha Declaration with TPA's other two IP negotiating objectives by actively promoting high levels of IP protection for pharmaceuticals while making targeted allowances for developing country partners. USTR believes that this longstanding U.S. pursuit of high IP protections for pharmaceuticals creates incentives for investment in research and development of new treatments, ultimately enhancing public health. With regard to the TPA objective of respecting the Doha Declaration, USTR's key policy change was to not insist upon two provisions it sees as relevant to the Declaration in FTAs with developing country trading partners. Otherwise, USTR has continued to pursue other pharmaceutical related IP protections that it does not consider related to the Doha Declaration. Reactions to USTR's record are mixed. The pharmaceutical industry considers these types of FTA provisions critical for preserving incentives for research and innovation. However, some academics, experts, nongovernmental organizations (NGOs), and generic producers have expressed concerns that these provisions may delay entry by cheaper generic products. In response to similar concerns in Congress, a bipartisan agreement was reached with the Administration to revise four recent FTA's prior to their submission for Congressional approval. U.S. interagency and private sector input into trade negotiations related to public health have remained limited since Congress enacted TPA. The Department of Health and Human Services (HHS) and other agencies generally endorse USTR's view that strong IP protection promotes public health and access to medicines, and interagency input has been primarily technical in nature. Within the formal private sector trade advisory system, a public health representative was recently added to 2 of the 16 private sector advisory committees, but not until USTR had concluded nine trade agreements. USTR did obtain some public health views through other formal and informal means during this period.

section_title: Letter
paragraphs: An international effort led by the United States in the 1980s to incorporate  An international effort led by the United States in the 1980s to incorporate  intellectual property (IP) protection into the trading system culminated  intellectual property (IP) protection into the trading system culminated  with the World Trade Organization (WTO) Agreement on Trade-Related  with the World Trade Organization (WTO) Agreement on Trade-Related  Aspects of Intellectual Property Rights (TRIPS) in 1995. Under TRIPS, all  Aspects of Intellectual Property Rights (TRIPS) in 1995. Under TRIPS, all  WTO member countries are obligated to establish a minimum standard of  WTO member countries are obligated to establish a minimum standard of  laws and regulations protecting copyrights, trademarks, patents and other  laws and regulations protecting copyrights, trademarks, patents and other  forms of IP rights. Patents are particularly important to the U.S.  forms of IP rights. Patents are particularly important to the U.S.  pharmaceutical industry and provide patent owners the legal means to  pharmaceutical industry and provide patent owners the legal means to  prevent others from making, using, or selling new inventions for a limited  prevent others from making, using, or selling new inventions for a limited  period of time, subject to certain conditions and exceptions. As the 2000  period of time, subject to certain conditions and exceptions. As the 2000  deadline for developing countries to implement TRIPS obligations  deadline for developing countries to implement TRIPS obligations  approached, however, some developing countries expressed concern  approached, however, some developing countries expressed concern  about subjecting health-related inventions such as new drugs to IP rules,  about subjecting health-related inventions such as new drugs to IP rules,  especially given the increasingly serious AIDS epidemic. These concerns  especially given the increasingly serious AIDS epidemic. These concerns  were part of a larger and still ongoing debate over how to balance long- were part of a larger and still ongoing debate over how to balance long- term incentives for drug innovation with the short-term affordability of  term incentives for drug innovation with the short-term affordability of  existing medicines, particularly when dealing with emergency public  existing medicines, particularly when dealing with emergency public  health situations.  health situations.
The 2001 WTO Doha Declaration on TRIPS and Public Health is  The 2001 WTO Doha Declaration on TRIPS and Public Health is  recognized as a watershed event in this debate. The declaration states, in  recognized as a watershed event in this debate. The declaration states, in  part, that the TRIPS Agreement does not and should not prevent members  part, that the TRIPS Agreement does not and should not prevent members  from taking measures to protect public health and, while reiterating a  from taking measures to protect public health and, while reiterating a  commitment to the TRIPS agreement, that the TRIPS Agreement should be  commitment to the TRIPS agreement, that the TRIPS Agreement should be  interpreted and implemented in a manner supportive of WTO members’  interpreted and implemented in a manner supportive of WTO members’  right to protect public health and promote access to medicines for all.  right to protect public health and promote access to medicines for all.  Subsequently, in the United States, the Trade Act of 2002 granting Trade  Subsequently, in the United States, the Trade Act of 2002 granting Trade  Promotion Authority (TPA) to the President outlined three principal trade  Promotion Authority (TPA) to the President outlined three principal trade  negotiating objectives related to IP, one of which referred to the Doha  negotiating objectives related to IP, one of which referred to the Doha  Declaration. The objectives were (1) to promote adequate and effective  protection of IP rights similar to U.S. law, (2) to secure fair and equitable  market access opportunities as related to IP rights, and (3) to respect the  Doha Declaration. Since then, negotiations at the WTO continued through  late 2005 in an effort to resolve outstanding issues related to the Doha  Declaration, and the United States has negotiated 11 free trade agreements  (FTA); several are now being implemented. Some in Congress are  concerned about how the U.S. Trade Representative (USTR) has  interpreted, pursued, and implemented TPA principal IP objectives  pertaining to the pharmaceutical industry, particularly in light of the third  objective calling for respect for the Doha Declaration.
In response to your request, this report (1) describes the Doha Declaration  on TRIPS and Public Health and evaluates how the United States and  other key nations have interpreted its intent and meaning, (2) analyzes  how the United States has balanced respect for the Doha Declaration with  the other two IP negotiating objectives in negotiating FTAs, (3) assesses  the U.S. approach to overseeing the implementation of pharmaceutical- related IP provisions in FTAs and other agreements, and (4) evaluates the  nature and extent of public health related agency and private sector input  into trade negotiations. You also expressed interest in technical assistance  on IP rights and public health that U.S. agencies provide to foreign  countries. Appendix II provides an overview of U.S. technical assistance  and technology transfer activities.
To meet these reporting objectives, we performed reviews of agency  documentation and correspondence, WTO documents and meeting  minutes, academic studies, pharmaceutical industry and public health  advocacy group reports and position papers, and media reports. We  examined the text of the FTAs negotiated since the Trade Act of 2002 and  compared the language of the IP pharmaceutical provisions found in each  FTA. In addition, we examined trends and patterns found in USTR’s  annual reports identifying foreign countries that deny adequate and  effective protection of IP rights. We traveled to Geneva, Switzerland, to  meet with officials from the U.S. Mission in Geneva, WTO, World Health  Organization (WHO), World Intellectual Property Organization (WIPO),  The Joint United Nations Program on HIV/AIDS, the Global Fund to Fight  AIDS, Tuberculosis and Malaria, as well as nongovernmental organizations  (NGO) from the pharmaceutical sector and public health community. To  evaluate the nature and extent of interagency input to USTR from other  executive branch agencies such as the Department of State, Department of  Health and Human Services (HHS), and Department of Commerce,  including the Patent and Trademark Office (PTO), we reviewed  documentation and interviewed officials. Regarding private sector input,  we interviewed agency officials and reviewed documents such as formal  advisory committee reports, responses to Federal Register notices, and  correspondence related to the trade advisory system. Currently, there is  ongoing litigation regarding the balance of representation on certain trade  advisory committees. In accordance with GAO policy, we did not take any  position on matters under litigation, which in this case meant on the  appropriateness of the current composition of the trade advisory  committees. Regarding technical assistance, we interviewed agency  officials and reviewed agency documents. We also interviewed  stakeholders to gather perspectives on the range of issues involved,  including pharmaceutical industry representatives, public health groups,  academics, and selected IP experts; each had recently published or spoken  on this issue. Access to medicines is recognized as a complex issue driven  by many factors, including funding levels, infrastructure, and effective  institutions, which are addressed by various U.S. government programs  and international efforts. As agreed with your staff, we did not seek to  independently assess the actual or potential effect of these larger U.S.  trade efforts on public health and access to medicines.
See appendix I for a detailed discussion of our scope and methodology.  See appendix II for information about technical assistance on IP rights and  public health. We conducted our review from November 2006 through  September 2007 in accordance with generally accepted government  auditing standards.
subsections: section_title: Background
paragraphs: By way of providing context for our examination of U.S. trade policy as it  relates to TPA guidance and the Doha Declaration on TRIPS and Public  Health, the following is an overview of ongoing U.S. government efforts to  address the wider issue of access to medicine and public health both  related and unrelated to IP, as well as how the WTO first became involved  in public health issues, and the origin of IP and public health in TPA.
subsections: section_title: U.S. Government Has Addressed IP and Access to Medicine
paragraphs: The U.S. government has supported innovation, competition, and access to  medicine. The Federal government, primarily through the National  Institutes of Health (NIH), conducts and supports medical research,  investing annually over $28 billion. About 55 percent of NIH’s budget  supports basic research. While basic research may not have an immediate  impact on drug innovation, such “untargeted” research often ultimately  leads to developing new medicines and technologies.
In principle, U.S. intellectual protection laws are designed to support  innovation. Patents are considered to be especially valuable for  innovations in pharmaceuticals. According to the pharmaceutical  industry, IP protection is crucial to its ability to offer new, innovative  medicines. Research and development of new drugs is very risky and time- consuming. The industry faces high fixed or “sunk” costs associated with  lengthy discovery and clinical trials. Moreover, a large proportion of new  drugs never make it to market due to their lack of efficacy or inadequate  safety. Thus, drug companies seek a relatively high return on the  medicines they do bring to market. U.S. patents give companies a 20-year  period during which they have an exclusive right to make, sell, and use  their invention. They use this period when they cannot be undercut by  competitors to charge relatively higher prices, thus allowing them to  recoup their investments and earn profits. However, the effective life of a  patent is typically much shorter than this 20-year period, since the  preclinical and clinical testing phases necessary for securing FDA  marketing approvals can take more than a decade.
Public policy has also played a role in fostering generic competition to  hold down prices. Generic drugs--copies of brand-name drugs--can enter  the market after the brand-name’s patent or other market exclusivities  expire and FDA approval is granted. Under the Hatch-Waxman Act of  1984, generic manufacturers do not have to repeat expensive research and  clinical trials to obtain approval. Instead, they only need to show the FDA  that their drugs are bioequivalent to the branded medicines. Because they  do not incur the same research and clinical trial expenditures, generic  firms can enter the market more quickly once patents have expired and  sell drugs at lower prices. Generic entry may also put pressure on  innovator companies to develop more new drugs.
Governments have also taken collective and individual steps to provide  medicines—particularly since 2001. At the global level, funds for  combating HIV/AIDS through the Global Fund to Combat AIDS,  Tuberculosis and Malaria, established in 2003, and UNAIDS, established in  1994, have grown considerably since 2001. Among other things, the United  States established the President’s Emergency Plan for AIDS Relief, or  PEPFAR, a 5-year, $15 billion initiative run by the Office of the Global  AIDS Coordinator at State, which has supported HIV prevention activities,  antiretroviral treatment and training, and HIV-related care and training at  more than 15,000 project sites primarily in 15 focus countries, mainly in  sub-Saharan Africa. More affluent developing countries, such as Brazil  and Thailand, have themselves been taking more aggressive steps to  combat AIDS and improve access, including universal access schemes  paid for with public funds.
Some of these government efforts have been undertaken with private  sector support. The research-based pharmaceutical industry has engaged  in private-public partnerships to address neglected diseases found in poor  countries, such as tuberculosis and malaria. Research-based  pharmaceutical companies have also instituted pricing schemes whereby  the same drug is sold at different prices, depending on the consumer’s or  country’s ability to pay. Ensuring that the supply remains in the intended  market, not resold elsewhere, is critical to this strategy’s success, but can  be problematic. Governments have also supported industry efforts to  donate medicines outright—about $4.4 billion worth of medicines and  other medical help over the 2000-2005 period, according to estimates by  the London School of Economics.
section_title: Access to Medicines Remains a Global Challenge
paragraphs: Despite government and industry initiatives, available data suggest that  many people currently lack access to existing medicines. According to the  World Health Organization (WHO), one third of the global population does  not have regular access to essential medicines. This matters: WHO  estimates that over 10.5 million lives a year could be saved by 2015 by  scaling up access to existing interventions for infectious diseases,  maternal and child health, and noncommunicable diseases. Indeed, WHO  says unaffordable prices of medicine and the need for new medicines for  diseases that disproportionately affect lower income populations are  among the primary challenges in expanding access to medicines globally.  According to WHO, in developing countries today, medicines account for  up to 70 percent of health care expenditure. This compares to less than 15  percent in most high income countries, and about 10 cents of every health  care dollar spent in the United States in 2005. Because of this imbalance in  health care expenditure worldwide, WHO’s various projects on access to  medicines and IP rights continue. The Group of 8 Industrialized Nations,  the Organization for Economic Cooperation and Development (OECD),  and the United Nations Conference on Trade and Development (UNCTAD)  are among the other organizations that have also undertaken efforts to  address aspects of the issue.
section_title: IP and Pharmaceuticals Became Part of WTO at Its Inception in 1995
paragraphs: The April 1994 Final Act Embodying the Results of the Uruguay Round of  Multilateral Trade Negotiations led to the establishment of WTO on  January 1, 1995. The Uruguay round was the product of long and complex  negotiations that not only liberalized manufactured goods trade in such  sectors as apparel, but also added IP and services rules and obligations to  the trading system. The WTO TRIPS Agreement was part of the Uruguay  Round’s results and established minimum levels of protection that each  government has to give to IP of fellow WTO members. The United States  had fought hard to secure worldwide adoption of minimum IP protection  and enforcement standards through TRIPS as home to the world’s largest  and most innovative pharmaceutical industry. TRIPS extended patent  protection for inventions of both products and processes, while allowing  certain exceptions, for at least 20 years. It also required WTO members,  when requiring as a condition of marketing approval the submission of  undisclosed test data or other data (such as data submitted to health  authorities for regulatory approval of pharmaceutical safety), the  origination of which involves considerable effort, to protect such data,  against unfair commercial use. When all of the WTO agreements took  effect, developed countries were given 1 year to ensure their laws and  practices conformed with TRIPS, but developing countries were given  transition periods of 5 or more years. Even so, many developing countries  complained about having to comply with the new requirements.
section_title: The HIV/AIDS Pandemic Put Access to Medicine in the Forefront for WTO
paragraphs: The issue of IP and access to medicine came to a head at WTO in 2001  when the HIV/AIDS pandemic in sub-Saharan Africa was reaching  catastrophic levels. Separately, South Africa attempted to use its laws to  lower prices for imported medicines, but faced opposition from U.S. and  other drug companies that felt its actions compromised their rights. Brazil  and the United States, meanwhile, were in dispute over a Brazilian law  that could make exceptions to patents if products were not manufactured  in Brazil. Nongovernmental organizations (NGO) became involved in  discussing the implications of TRIPS to public health.
section_title: Congress Addressed IP and Public Health in Trade Promotion Authority Legislation
paragraphs: Shortly after WTO adopted the Declaration on TRIPS and Public Health,  Congress passed the Trade Act of 2002, which granted the President Trade  Promotion Authority (TPA) for reciprocal trade agreements to liberalize  U.S. trade with foreign nations. TPA contains guidance from Congress  concerning U.S. goals in negotiated trade agreements. One of the three  goals for IP specified in TPA, “to respect the Doha Declaration on TRIPS  and Public Health,” was added in response to an amendment by Senator  Edward Kennedy. In his remarks about the amendment, Senator Kennedy  explained that the Declaration on TRIPS and Public Health struck a  balance between the legitimate interests of intellectual property protection  and the preservation of public health. Senator Kennedy went on to assert  that “his amendment directs our trade negotiators to support the  declaration without reservation.” Senators Grassley and Baucus also  asserted their support for the amendment and emphasized the importance  of IP issues with respect to public health and innovation of new medicines.  Congress otherwise provided no guidance at the time on how to interpret  and apply this TPA objective. Recently, in response to the expiration of the  President’s Trade Promotion Authority (TPA) on June 30, 2007, before the  Doha round of global trade talks had been successfully concluded, there  have been some calls to renew it.
section_title: The United States Has a Narrower Interpretation of the Doha Declaration Than Some Other WTO Members
paragraphs: To help address public health problems affecting many developing  countries, WTO members adopted the Doha Declaration (reprinted in full  below) to stress the importance of implementing the TRIPS agreement in a  manner supportive of public health. As part of a carefully worded  compromise among competing perspectives, this statement was placed in  the context of shared challenges and goals, such as promoting both access  to existing medicines and research into and development of new  medicines. The United States interprets the declaration as a political  statement recognizing public health crises and affirming the importance of  IP protection that neither changes existing TRIPS obligations nor creates  new obligations, and does not assign public health greater priority than IP  protection. Significantly, the declaration clarifies certain flexibilities  explicit in TRIPS that allow WTO members to address public health crises.  USTR argues that these flexibilities should be applied judiciously and  subject to certain conditions specified in the TRIPS agreement. Some  developing countries, however, believe these flexibilities provide broad  discretion to ensure access to medicines when IP regulations present  barriers to addressing not only health issues, but also social welfare.  Differences over a narrower versus broader interpretations continued long  after the declaration. Notably, debate over how to help countries with little  or no pharmaceuticals manufacturing capacity take full advantage of the  flexibilities, including which members should be eligible and for what  diseases, became controversial.
Declaration on the TRIPS Agreement and Public Health  1. We recognize the gravity of the public health problems afflicting many developing and  least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria  and other epidemics.   2. We stress the need for the WTO Agreement on Trade-Related Aspects of Intellectual  Property Rights (TRIPS Agreement) to be part of the wider national and international  action to address these problems.  3. We recognize that intellectual property protection is important for the development of  new medicines. We also recognize the concerns about its effects on prices.  4. We agree that the TRIPS Agreement does not and should not prevent members from  taking measures to protect public health. Accordingly, while reiterating our commitment to  the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and  implemented in a manner supportive of WTO Members’ right to protect public health and,  in particular, to promote access to medicines for all.
In this connection, we reaffirm the right of WTO Members to use, to the full, the provisions  in the TRIPS Agreement, which provide flexibility for this purpose.  5. Accordingly and in the light of paragraph 4 above, while maintaining our commitments in  the TRIPS Agreement, we recognize that these flexibilities include:  a.
In applying the customary rules of interpretation of public international law, each  provision of the TRIPS Agreement shall be read in the light of the object and  purpose of the Agreement as expressed, in particular, in its objectives and  principles.   b.  Each Member has the right to grant compulsory licenses and the freedom to  determine the grounds upon which such licenses are granted.   c.  Each Member has the right to determine what constitutes a national emergency or  other circumstances of extreme urgency, it being understood that public health  crises, including those relating to HIV/AIDS, tuberculosis, malaria and other  epidemics, can represent a national emergency or other circumstances of extreme  urgency.   d.  The effect of the provisions in the TRIPS Agreement that are relevant to the  exhaustion of intellectual property rights is to leave each Member free to establish  its own regime for such exhaustion without challenge, subject to the MFN and  national treatment provisions of Articles 3 and 4.   6. We recognize that WTO Members with insufficient or no manufacturing capacities in the  pharmaceutical sector could face difficulties in making effective use of compulsory  licensing under the TRIPS Agreement. We instruct the Council for TRIPS to find an  expeditious solution to this problem and to report to the General Council before the end of  2002.  7. We reaffirm the commitment of developed-country Members to provide incentives to  their enterprises and institutions to promote and encourage technology transfer to least- developed country Members pursuant to Article 66.2. We also agree that the least- developed country Members will not be obliged, with respect to pharmaceutical products,  to implement or apply Sections 5 and 7 of Part II of the TRIPS Agreement or to enforce  rights provided for under these Sections until 1 January 2016, without prejudice to the right  of least-developed country members to seek other extensions of the transition periods as  provided for in Article 66.1 of the TRIPS Agreement. We instruct the Council for TRIPS to  take the necessary action to give effect to this pursuant to Article 66.1 of the TRIPS  Agreement.
subsections: section_title: The Doha Declaration Addresses Flexibilities in TRIPS That Can Be Used to Deal with Public Health Crises
paragraphs: In the wake of the HIV/AIDS crisis at the time, some WTO members were  concerned about the extent to which the TRIPS agreement allowed them  to address public health needs. The African members known as the  African Group were among the members pushing for clarification. WTO  members formally addressed this issue in the main Doha Ministerial  Declaration and their intention to adopt a separate declaration, as shown  below.
Ministerial Declaration - Fourth Session November 2001   We stress the importance we attach to implementation and interpretation of the Agreement  on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) in a manner  supportive of public health, by promoting both access to medicines and research and  development into new medicines and, in this connection, are adopting a separate  Declaration.
The Doha Declaration is divided into seven paragraphs. Paragraphs one  through four are general principles that WTO members agreed to that  describe the relationship between IP rights and public health.
Paragraph five lays out specific flexibilities provided in TRIPS that can be  used by WTO members to address public health related problems. Below  is a summary of these flexibilities:  5(a) that each provision in TRIPS should be read in light of the  agreement’s objectives and principles;  5(b) the right to grant compulsory licenses. The WTO fact sheet on TRIPS  and pharmaceuticals describes the term compulsory licensing as when a  government allows someone else to produce the patented product or  process without the consent of the patent owner—in this case in reference  to pharmaceuticals, but it could also apply to patents in any field.5 (c) the right to determine what is a national emergency; and  5 (d) the right to establish an exhaustion regime without challenge.  The  WTO fact sheet on TRIPS and pharmaceuticals describes the term  exhaustion as a legal principle consisting of the idea that once a company  (patent holder) has sold a batch of its product, its patent distribution  rights are exhausted with respect to that batch, and it no longer has any  rights to control distribution of that batch. Exhaustion is the legal  principal behind parallel imports.
WTO members appear to agree that the TRIPS and Public Health  declaration makes no change to TRIPS itself. However, two changes are  foreshadowed. Specifically, paragraphs six and seven calls upon WTO  members to take future action in specific areas. Paragraph six mandates  WTO members to resolve a potential problem with regard to compulsory  licensing by WTO members with insufficient or no pharmaceutical  manufacturing capacities. Because TRIPS specifies that a country may  only compulsory license primarily for supplying the domestic market,  countries with little or no manufacturing capacity (and therefore no  domestic company to which the government could grant a compulsory  license) could face difficulties in effectively using compulsory licensing.  They must import their medicines, but the supplier (the exporter) would  be prevented under TRIPS from exporting them the patented medicines  under a compulsory license if the product was patented in its territory.  Paragraph seven instructs WTO members to take the steps necessary to  extend the deadline from for least developed countries to implement their  TRIPS obligations with respect to pharmaceutical products to 2016.
section_title: The United States Has a Narrower Interpretation of the Declaration Than Some Other WTO Members
paragraphs: The United States believes that the declaration does not change existing  TRIPS obligations or create new rights, nor does it give public health  greater priority than IP protection. Overall, leading up to Doha and since,  the United States has consistently opposed creating broader exemptions  to TRIPS to protect public health, but instead has called for permitting  targeted exceptions to TRIPS to avoid eroding patent protections that it  deems necessary for research and development of medicines to treat life- threatening diseases. Some developing countries had wanted to modify  TRIPS provisions if they were considered insufficient to protect public  health.
According to a USTR official, paragraph four of the declaration–“The  TRIPS agreement does not and should not prevent members from taking  measures to protect public health.”—does not provide a broad exception  in TRIPS for public health purposes and in addition, the provision should  be considered in context with the rest of the declaration. Some developing  countries had originally called for the declaration to have stronger  language–”Nothing in the TRIPS agreement should prevent Members from  taking measures to protect public health.”–in an attempt to make the  declaration legally binding.
With regard to paragraph five, which enumerates flexibilities in TRIPS that  may be used to address public health, the United States supports the view  that these flexibilities preserve the ability of members to formulate public  health policies while also maintaining effective patent systems. But some  developing countries see paragraph five as providing broader discretion to  address public health. For example, a group of developing countries,  including the African Group, Brazil, India, and Thailand, has maintained  that there should be a common understanding that confirms the right of  governments to ensure access to medicines at affordable prices and to  make use of TRIPS provisions whenever the scope or exercise of IP  regulations results in barriers to access to medicine. These members  believe that TRIPS objectives and principles (referred to in the last phrase  in paragraph five (a) of the declaration) support the view that TRIPS  protections are and should be contingent on IP rights contributing to  social goals, such as nutrition and social and economic welfare. (TRIPS  objectives and principles are found in articles 7 and 8 respectively, shown  below).
TRIPS Article 7 – Objectives  The protection and enforcement of intellectual property rights should contribute to the  promotion of technological innovation and to the transfer and dissemination of technology,  to the mutual advantage of producers and users of technology knowledge and in a manner  conducive to social and economic welfare, and to a balance of rights and obligations.
TRIPS Article 8 – Principles  1.  Members may, in formulating or amending their laws and regulations, adopt  measures necessary to protect public health and nutrition, and to promote the  public interest in sectors of vital importance to their socio-economic and  technological development, provided that such measures are consistent with the  provisions of this Agreement.  2.  Appropriate measures, provided that they are consistent with the provisions of  this Agreement, may be needed to prevent the abuse of intellectual property rights  by right holders or the resort to practices which unreasonably restrain trade or  adversely affect the international transfer of technology.
The United States has maintained that, rather than impeding access to  medicines, patent regimes meet the objectives of article 7 by contributing  to the promotion of technological innovation and dissemination of  technology. Furthermore, the United States has argued that the final  clause in article 8–”provided that such measures are consistent with the  provisions of Agreement”–precluded article 8 from providing  such a broad exception to the obligations of TRIPS. The European Union  (EU), Switzerland, and Japan were concerned that the countries were  suggesting the ability to make significant exceptions to patent protection  under TRIPS.
The interpretation of paragraph five (b) on compulsory licensing has  sparked the most controversy among WTO members. The WTO fact sheet  on TRIPS and pharmaceuticals describes the declaration as affirming  compulsory licensing  as part of its overall attempt  to strike a balance between promoting access to existing drugs and  promoting research and development into new drugs.  Significantly, the  declaration clarifies that WTO members can determine the grounds for  issuing a compulsory license. This is because TRIPS does not specifically  list the reasons that might be used to justify compulsory licensing, but  rather enumerates a number of conditions for doing so.
During the debate over the declaration, the United States stressed that,  while it considered compulsory licensing to sometimes be appropriate, it  believed its widespread use for any purpose could have negative  implications for the patent system and, more importantly, for the  availability and development of new drugs. Moreover, the United States  argued using compulsory licensing as a mechanism for directing industrial  policy or protecting domestic industries against foreign competition would  be contrary to the letter and purpose of TRIPS.
In addition, USTR emphasizes that while the declaration is clear that  members can determine the grounds for compulsory licensing, they still  must meet certain conditions articulated in TRIPS article 31. These are  aimed at protecting the legitimate interests of the patent holder when  circumstances allow compulsory licensing and government use of a patent  without the authorization of the patent holder. Summarized below are  some relevant excerpts from selected article 31—”Other use without  authorization of the patent holder”—provisions, including important  exceptions in recognition of the fact that time can be of the essence in  some situations, such as national emergencies. Basically, with some  exceptions, whoever issues a compulsory license must first inform the  patent holder and seek to obtain authorization (voluntary license) from  the patent holder. In all cases, they must remunerate the patent holder.
Summaries of article 31(b) (h) (k) provisions:    Prior to use, user makes effort to obtain authorization from the patent  holder on reasonable commercial terms and conditions within a  reasonable period of time.
Above authorization requirement may be waived in cases of    national emergency or other circumstances of extreme urgency to correct anticompetitive practices as determined by judicial or  administrative processes.    notified as soon as reasonably practicable in case of national  informed promptly in case of noncommercial use    Patent holder shall receive adequate remuneration.
Some developing countries, including the African Group, Brazil, India, and  Thailand, expressed the view that the TRIPS agreement in no way stands  in the way of public health protection, and therefore that it should provide  the broadest flexibility for the use of compulsory licensing to obtain lower  cost medicines. Differences over compulsory licensing have continued to  reemerge, including later during the later debate over how to resolve the  paragraph six problem.
Finally, the United States and some WTO members have different  interpretations of paragraph five (d), which says that TRIPS leaves each  member free from challenge to establish its own exhaustion regime, based  on TRIPS article 6 (shown below).
TRIPS Article 6 – Exhaustion  For the purposes of dispute settlement under this Agreement, subject to the provisions of  Articles 3 and 4, nothing in this Agreement shall be used to address the issue of the  exhaustion of intellectual property rights.
The United States stated during the debate leading up to the declaration  that it did not interpret this to mean that TRIPS permits parallel imports,  and expressed misgivings about their use. To be specific, USTR pointed  out that permitting parallel imports inhibits the patent holder’s willingness  to offer prices differentiated according to countries’ ability to pay. This is  because, when prices are higher in one country than in others, there is a  tendency for diversion to higher income countries. These are precisely the  markets where patent owners want to maintain high prices in order to  recoup costs and earn the profits that fund future research. This  differential pricing has been a key feature of pharmaceutical industry  efforts to promote improved access to medicine since the Doha  Declaration.
In contrast to the U.S. position, some developing countries, including the  African Group, Brazil, India, and Thailand, called parallel importation a  significant way of increasing access to medicines, particularly for  developing countries, and a relevant tool when compulsory licenses may  be ineffective.
section_title: Differences over a Narrower Versus a Broader Approach Continued in Debating the 2003 and 2005 Council Decisions
paragraphs: Differences over whether the use of compulsory licensing should be  restricted or widespread continued during the subsequent debate leading  up to the 2003 Council Decision on the Implementation of Paragraph Six.  The United States believed that situations requiring a compulsory license  for export (sometimes referred to as the “paragraph six solution”) would  likely be somewhat limited but emphasized that the grave health problems  faced by certain developing and least developed countries made a solution  imperative. The United States called for restricting compulsory licensing  for export to a narrower set of scenarios to ensure that only countries  facing genuine crises and with no effective manufacturing capacity could  use it. WTO members disagreed about the legal means to address  paragraph six and its scope and coverage, including which members  should participate in the solution and for what diseases.
subsections: section_title: USTR Maintained Paragraph Six Would Be Less Applicable in the Near Term
paragraphs: During deliberations in 2001 leading up to the Declaration, the United  States maintained that situations requiring a paragraph six solution would  likely remain somewhat limited in the near term, but recognized that the  grave health problems faced by certain developing and least developed  countries foreshadowed serious consequences should they occur. First,  difficulties falling under paragraph six would only be expected to arise  when pharmaceuticals were not provided by the patent holder through  normal commercial arrangements or through discount, donation, or other  aid programs. In addition, a paragraph six solution would only apply if a  patent existed in the WTO member country or territory that was exporting  the pharmaceutical. However, some developing countries at the time were  not obligated to provide patents until January 2005, most notably India.
section_title: WTO Members Differed on the Legal Means to Address Paragraph Six
paragraphs: The legal mechanism by which to address paragraph six could also affect  the widespread use of compulsory licensing and the effective force of  TRIPS obligations. WTO members had to decide whether to craft the  paragraph six solution on the basis of TRIPS article 30 or on a waiver of  article 31. The United States and the EU supported article 31. The United  States argued that a targeted moratorium or waiver of obligations of  TRIPS article 31(f) (see below) was the most expeditious, workable,  transparent, sustainable, and legal solution. Essentially, the TRIPS  requirement that compulsory licensing should be primarily for domestic  use would be waived. “Other use without authorization of the patent holder”
The African Group also supported the article 31 approach and had laid out  several options for doing so. Above all, however, they said that they  wanted an expeditious solution. According to WTO officials, there was a  tacit agreement among the WTO members that the African Group “had the  moral high ground” on this issue because the HIV/AIDS pandemic was so  acute in Africa.
Alternatively, countries such as Brazil, India, and Thailand argued that the  best solution was to interpret TRIPS article 30 (see below) so as to  recognize the right of WTO members to authorize third parties to make,  sell, and export patented public-health-related products, without the  consent of the patent holder to address the public health needs in another  country. These acts would be considered “limited exceptions to the  exclusive rights” conferred by patents. The countries argued that an  authoritative interpretation of article 30 would also have the advantage of  avoiding the potentially cumbersome requirement under a waiver of article  31(f) that the exporting country must also grant a compulsory license as  well as change its own laws to allow compulsory licensing for exporting.
Members may provide limited exceptions to the exclusive rights conferred by a patent,  provided that such exceptions do not unreasonably conflict with a normal exploitation of  the patent and do not unreasonably prejudice the legitimate interests of the patent owner,  taking account of the legitimate interests of third parties.
USTR contended that such a broad reinterpretation of article 30 allowing  members to amend their patent laws to permit compulsory licenses would  unreasonably conflict with patent owners’ normal exploitation of patents  and with their legitimate interests. Furthermore, unlike article 31, article  30 contains no procedural safeguards, such as requirements for notifying a  patent owner of use, establishing terms and conditions, or remuneration to  the patent holder. USTR stated that creating an exception through article  30 was hard to defend legally as being consistent with TRIPS. Moreover, it  contended that there was too much danger that such an exception would  be misused and thus subject to dispute settlement challenge.
section_title: WTO Members Disagreed on Countries Covered under Paragraph Six
paragraphs: The question of which countries should be able to take advantage of a  paragraph six solution also provoked controversy. Basically, the United  States and other WTO members with large name-brand pharmaceutical  industries, including the EU and Switzerland, wanted the paragraph six  solution to focus on developing and least developed countries lacking  pharmaceutical manufacturing capacity as importing beneficiaries. The  United States wanted to establish specific procedures to clarify which  developing country members could be considered to have insufficient or  no manufacturing ability, and thought it inappropriate to extend the  solution to developed countries or to countries that had manufacturing  capacity but chose not to manufacture certain drugs based on policy,  economic, or other reasons. WTO officials told us they tried to collect data  on manufacturing capability, but could find none. Ultimately, the 2003  Council Decision required importing countries to explain how they had no  or insufficient manufacturing capacity for the product in question.
After facing strong resistance from other WTO members, the United States  did not insist on a specific list of eligible countries. However, the United  States maintained that not every member country should be able to use a  paragraph six solution, and suggested that some members, such as OECD  countries and certain developing countries opt out. WTO officials told us  that the United States put pressure on many countries to opt out. In the  end, 23 developed countries agreed to opt out, and the 10 countries soon  to join the EU partially opted out, with agreement to opt out completely  after they joined the EU. Finally, some other WTO members agreed that  they would only use the system as importers in situations of national  emergency or other circumstances of extreme urgency.
section_title: United States Had Difficulty Joining Consensus on Paragraph Six concerning Diseases
paragraphs: The other controversial issue was the scope of diseases to be covered  under paragraph six of the declaration. In November and December 2002,  the United States said that it was willing to join the consensus on all of a  paragraph six solution draft except for language on the scope of diseases.  The United States, the EU, and Japan wanted coverage limited to the  diseases mentioned in paragraph one of the declaration, namely  “HIV/AIDS, TB, malaria and other epidemics” of potentially pandemic  proportions. Others, including Brazil and Argentina, disagreed and wanted  no restrictions on diseases. According to WTO officials, some WTO  members discussed using either paragraph one or paragraph four–“access  to medicine for all”–of the declaration to address the scope of diseases,  and settled on the former after being reassured that the declaration did not  restrict itself to specific diseases. According to WTO officials, in April  2003, the new TRIPS Council Chair, Singapore, conferred with the United  States and the U.S. pharmaceutical industry, drafted a new paragraph six  text, and led negotiations among a few members—namely, South Africa,  Kenya, Brazil, India, and the United States. USTR officials noted that this  group of countries represented the spectrum of views on this debate. The  final text contained no specifics on diseases, but relied on paragraph one  of the declaration.
section_title: The Chairman’s Statement Was a Key Condition to U.S. Support of the Paragraph Six Solution
paragraphs: USTR officials emphasized that the United States ultimately conditioned  its consensus with a paragraph six solution on a statement by the  chairman of the General Council that signaled that diversion was a key  issue. WTO members generally agreed diversion should be prevented to  ensure that drugs provided under the paragraph six solution went where  intended. The separate statement by the General Council chairman was  designed to alleviate fears that the decision might be abused and  undermine patent protection or not effectively prevent drugs from being  diverted. The General Council chairman stated that, before adopting the  decision, he wanted to place on the record “this Statement which  represents several key shared understandings of Members regarding the  Decision to be taken and the way in which it will be interpreted and  implemented.” He went on to state that members recognize that the  purpose of the decision would be defeated if products were diverted from  the markets for which they were intended, and that all reasonable  measures should be taken to prevent such diversion. In addition, the  chairman listed the WTO members that had agreed to opt out of using the  system as importers.
section_title: USTR Believes the 2003 Council Decision Was a Positive One, but Some WTO Members Have Expressed Concerns since the Decision
paragraphs: Ultimately, the outcome of the nearly 2-year debate over a paragraph six  solution was the adoption of the 2003 General Council Decision in light of  the General Council chairman’s statement. The decision waived the  prohibition in TRIPS article 31(f) against exporting under a compulsory  license to countries that cannot manufacture the pharmaceuticals  themselves. USTR officials told us they considered it a positive outcome in  that it provided a solution to the problem identified in paragraph six of the  Doha Declaration, while preserving TRIPS rules and obligations.
Other WTO members initially supported the outcome, but expressed some  concern later. For example, the African Group suggested at a March 2005  meeting of the WTO TRIPS Council that the burden of using the decision  was the reason why, up to that point, the 2003 Council Decision had not  been used by a country to waive TRIPS rules and import generic versions  of patented drugs under a compulsory license. One WTO representative  told us more recently that he considered the waiver too complicated,  calling the packaging and labeling requirements costly and draconian  because of the need to change production lines.
Under the waiver, countries can produce generic copies of patented  products under compulsory licenses to export to eligible importing  countries, subject to certain requirements and safeguards. The terms of  the waiver are summarized below:    Notify TRIPS Council: names, expected quantities, of drug.
Other than least developed countries, establish insufficient or no  manufacturing capacities for the product in question.
Take reasonable measures within their means, with possible assistance  from developed country members, to prevent exportation elsewhere  (diversion).
If product is patented in its territory, must grant or intend to grant a  compulsory license in compliance with TRIPS Article 31.
Remuneration waived if product is provided by exporting country.
Make a determination of a national emergency, other circumstances  of extreme urgency, or a case of public noncommercial use.
Export only amount necessary to meet needs of eligible importing  member.
Export entirety of product produced under compulsory license to the  eligible importing member(s) that has notified the TRIPS Council.
Label product to identify it as being produced under the system  established by the decision.
Package and color uniquely, provided such distinction is feasible  and does not significantly affect price.
Publicize on a designated Web site distinguishing features and  quantities of medicine exporting.
Notify TRIPS Council: name of licensee, products, country to be  supplied, and duration of license.
Adequately remunerate patent holder in the exporting member.
Ensure the availability of effective legal means to prevent the  importation of products produced under the system established by the  decision and diverted to their markets.
According to USTR, in July 2004, the United States and Canada agreed to  suspend applications, as between themselves, of a provision of the North  American Free Trade Agreement (NAFTA) that parallels Article 31 (f) of  the TRIPS agreement in order to ensure that Canada could export drugs  under the terms of the 2003 Council Decision without violating NAFTA.   The first and only WTO member to date to notify the WTO TRIPS Council  of its intent to use a paragraph six solution was Rwanda, in July 2007.
section_title: General Council Issued 2005 Decision to Consider Amending the TRIPS Agreement, after Some Difficulties
paragraphs: Debate at the WTO over the 2003 Council Decision still continued for  another 2 years. In response to a call by some WTO members, principally  driven by the African Group, to express the 2003 Council Decision in an  amendment to TRIPS as a more permanent solution, the 2003 Decision  also called for WTO members to prepare an amendment to replace the  decision. As a result, the General Council issued a decision on December  6, 2005, adopting a protocol amendment that is open for members to  accept. It will become effective once the amendment is accepted by two  thirds of the WTO membership. Thus far, eight WTO members have  accepted the amendment, including the United States, Switzerland, El  Salvador, the Republic of Korea, Norway, India, the Philippines, and Israel.
The drafting of the amendment turned into another 2-year struggle.  According to USTR, the United States wanted to ensure that agreements  made under the 2003 Council Decision were not changed in the  amendment. To do this, USTR proposed to include the chairman’s  statement as a footnote to the amendment. WTO members discussed the  possible legal weight of a footnote. According to USTR, some members  felt attaching the chairman’s statement as a footnote might give it too  much legal weight. In addition, some members wanted to make changes to  the original 2003 Decision in the amendment. Eventually, the footnote was  dropped and the members agreed to have the chairman’s statement read  orally, similar to the scenario followed in adopting the 2003 Council  Decision. Despite losing the footnote, the United States believed it had  achieved the delicate balance of preserving the solution agreed to under  the 2003 Council Decision while promoting access to medicine with  safeguards against diversion.
section_title: USTR Has Maintained Its Pursuit of High IP Standards and Made Some Allowances for Doha Flexibilities in Negotiating FTAs
paragraphs: In negotiating FTAs, USTR said it balances respect for the Doha  Declaration with its other two IP negotiating objectives in TPA by  consistently promoting high standards of IP protection similar to U.S. law,  while making allowances for the two specific flexibilities mentioned in the  declaration. For example, USTR makes concessions to developing  countries on compulsory licensing and parallel importing provisions  specifically cited in the declaration. However, USTR has continued to  pursue other pharmaceutical-related IP provisions that it does not see as  relevant or contrary to the Doha Declaration in all of its FTAs, such as  data exclusivity, patent term extensions, and patent linkage. Reactions to  USTR’s approach have been mixed. The pharmaceutical industry supports  the inclusion of these protections in FTAs because it believes they are  central to maintaining incentives for investment in research and  development of new drugs.  Some experts and public health advocates  have raised concerns that USTR’s approach hinders generic competition,  reducing access to medicines and thus violating the principles of the  declaration.  Finally, certain Members of Congress have expressed  concern over the pharmaceutical-related IP provisions in FTAs with  developing countries, and this concern was recently addressed through a  bipartisan compromise between Congress and the administration.
subsections: section_title: USTR Believes That Strong IP Protection and Increased Market Access Promotes Public Health, and Thus Respect for the Doha Declaration
paragraphs: USTR has three principal negotiating objectives related to IP rights when  negotiating FTAs with other countries. The Trade Act of 2002, which  granted the President Trade Promotion Authority (TPA), contains  guidance from Congress on U.S. negotiating objectives for trade  agreements, including three goals on IP rights:1.  to further promote adequate and effective protection of IP rights,  including through ensuring that the provisions of any multilateral or  bilateral trade agreement governing IP rights that is entered into by the  United States reflect a standard of protection similar to that found in  United States law;  2.  to secure fair, equitable, and nondiscriminatory market access  opportunities for United States persons that rely upon IP protection;  and  3.  to respect the Doha Declaration on the TRIPS Agreement and Public  Health, adopted by the World Trade Organization (WTO).
USTR officials explained that USTR believes it can simultaneously pursue  policies that advance the first two objectives of promoting IP rights and  securing market access, while fulfilling the third objective to respect the  Doha Declaration. Specifically, the officials noted that in order to pursue  the first two objectives in FTAs, USTR officials have negotiated high levels  of IP protection in FTAs that reflect standards of protection similar to U.S.  law, and build on the minimum standards in TRIPS. USTR officials stated  that they pursue the second objective of securing market access for  persons who rely on IP protection by ensuring that products benefit from  the increased protection and market access in the FTAs. For example,  USTR officials noted that FTAs with more developed countries have  regulatory provisions for pharmaceuticals and medical devices on market  approval, price controls, and reimbursement policies. USTR sees no  inherent conflict between active pursuit of TPA’s first two objectives of  promoting IP protection similar to U.S. law and market access  opportunities, and the third objective of respecting the Doha Declaration,  but rather considers these objectives complementary. USTR officials  stated that USTR’s view is that IP rights ultimately enhance public health  by promoting innovation for new medicines and that therefore this  approach is consistent with the Doha Declaration.
section_title: USTR Pursues a Menu of Pharmaceutical-Related IP Provisions in FTA Negotiations
paragraphs: In response to the objectives laid out in TPA, USTR officials noted that  they have pursued a menu of pharmaceutical-related IP provisions in its  FTAs, including restrictions on compulsory licensing and parallel imports,  and requirements to provide data exclusivity, patent term extensions, and  patent linkage. Some of these pharmaceutical-related IP provisions go  beyond the minimum levels of protection outlined in TRIPS, provoking  complaints from some that they violate the principles and spirit of the  Doha Declaration. However, USTR considers them consistent with its  interpretation of the declaration’s intent and meaning and with TPA  guidance.
The FTA pharmaceutical-related IP provisions, to the extent that they are  similar across the FTAs, have been summarized below. However, it is  important to note that variations across the provisions exist and have not  been presented in these summaries. Moreover, not every FTA reviewed  contained every provision summarized below.
Compulsory Licensing: Generally, provisions on compulsory licensing  limit the ability of a country to issue a compulsory license to a few specific  scenarios: to remedy anticompetitive practices in cases of public  noncommercial use, in cases of national emergency, or other  circumstances of extreme urgency.
Parallel Imports: Generally, provisions on parallel importation require the  country to preserve the patent owner’s exclusive right to sell or import its  product in the country in a variety of contexts.
Data Exclusivity: Generally, data exclusivity provisions state that a  generic company cannot obtain marketing approval based on the safety  and efficacy data of the innovator company for a period of at least 5 years  from the date marketing approval was granted to the innovator. Thus, this  provision provides the innovator 5 years of effective marketing exclusivity,  unless the generic firm produces its own safety and efficacy data with new  drug trials.
Patent Term Extensions: Generally, patent term extension provisions  require the country to provide a patent term extension to the patent owner  to compensate for unreasonable delays in granting the patent, or for  unreasonable curtailment of the effective patent term as a result of the  marketing approval process.
Patent Linkage: Generally, provisions on patent linkage establish a  relationship between the market approval process of generic drugs and  the patent status of the originator product. Under this relationship, the  governmental body responsible for granting market approval prevents  third parties from making or selling copies of patented products without  the authorization of the patent holder by withholding marketing approval  until either the expiration of the patent or a determination by a  governmental body, either executive or judicial, that the patents are either  not infringed, invalid or unenforceable. In addition, the identity of the  generic company requesting marketing approval must be made available to  the patent owner.
Patent term extensions and patent linkage are two examples of  pharmaceutical-related IP provisions the United States negotiates for in  FTAs that go beyond the minimum obligations in the TRIPS agreement.  TRIPS article 33, which lays out the term of protection for a patented  product, states that “the term of protection available shall not end before  the expiration of a period of twenty years counted from the filing date.”  There is no mention of patent term extensions to make up for delays in the  patent or marketing approval process in the TRIPS agreement.  Nevertheless, these patent term extension provisions exist in U.S. law  and according to USTR officials are negotiated by USTR in FTAs. In  addition, there is no mention of coordination between the health  regulatory authority and the patent granting office, known as patent  linkage, in the TRIPS agreement. However, U.S. law does establish linkage  between the FDA drug approval process of generics and the patent status  of the originator product, and USTR believes that such linkage is  important to restrict marketing of infringing copies of patented drug  products.
Whether FTA provisions on data exclusivity go beyond TRIPS is less clear.  TRIPS article 39(3) states that members who require the submission of  undisclosed test data as a condition of marketing approval for a  pharmaceutical or agricultural chemical product shall protect the data  from unfair commercial use and disclosure.
TRIPS Article 39(3)
Members, when requiring, as a condition of approving the marketing of pharmaceutical or  of agricultural chemical products which utilize new chemical entities, the submission of  undisclosed test or other data, the origination of which involves a considerable effort, shall  protect such data against unfair commercial use.  In addition, Members shall protect such  data against disclosure, except where necessary to protect the public, or unless steps are  taken to ensure that the data are protected against unfair commercial use.
There are different interpretations of the obligations under TRIPS 39(3),  and exactly what practices can be considered a fulfillment of this  obligation. One interpretation of TRIPS 39(3) requires members to grant  the originator of the data a period of exclusive use similar to that provided  by data exclusivity laws in the United States. Under this interpretation,  FTA provisions do not go beyond TRIPS. Others do not believe that Article  39(3) of TRIPS confers exclusive rights, but instead simply requires  countries to prevent third parties from using the originators’ data for  unfair commercial purposes. This interpretation suggests that the FTA  provision goes beyond the TRIPS requirement.
section_title: USTR Has Made Limited Concessions on Doha Declaration Flexibilities
paragraphs: USTR officials stated that they did not change the initial demands USTR  makes in FTA negotiations as a result of the Doha Declaration. However,  they argued that USTR follows TPA guidance to respect the Doha  Declaration by making concessions during negotiations with what it  considers to be developing countries on the two TRIPS flexibilities  specifically mentioned in the declaration. USTR officials told us that when  developing country trading partners raise concerns during FTA  negotiations about provisions that would restrict the use of parallel  imports or compulsory licensing, USTR ultimately backs off and removes  them from the proposed text; however, they stated that no such  concessions were made for countries that USTR considered developed  countries. A USTR official said that developed countries have more tools  and resources with which to deal with public health situations and that  they should not have to revert to such extraordinary measures outside of  the cases specified in FTA provisions, such as national emergencies.  Restricting these concessions to developing countries is in line with  USTR’s belief that the Doha Declaration is intended to apply primarily to  developing countries with limited resources.
USTR also attaches side letters on public health to FTAs with developing  countries. Our analysis in figure 2 shows that 7 of the 11 agreements  include a side letter or understandings on public health. USTR officials  noted that they use the side letters to further clarify that the provisions of  the agreement leave intact a series of methods a country can use to  respond to public health emergencies. However, according to a USTR  official, these side letters do not create exceptions to the provisions in the  FTA.
USTR told us that some differences in the IP provisions among FTAs  represented accommodations made to countries raising specific concerns  during negotiations. For instance, USTR officials stated that, in the Central  America-Dominican Republic-United States Free Trade Agreement  (CAFTA-DR), a transition period was included for the implementation of  patent term extensions. In the CAFTA-DR agreement, USTR dropped a  proposal for data exclusivity protection on new uses of previously  discovered chemical entities, and instead left data exclusivity in place only  for new chemical entities. In addition, USTR revised the proposed  provision on patentable subject matter in the Oman agreement in order to  exclude plants and animals from patent protection in response to Oman’s  concerns. USTR officials said that most concerns raised during  negotiations regarding data exclusivity and patent linkage were not  couched as health concerns, but rather as unease related to administrative  burden or implementation concerns. When these types of implementation  concerns are raised during negotiations, USTR said it consults with the  U.S. agencies responsible for implementing those provisions in the United  States, PTO, and FDA.
USTR officials stated that USTR considers the remaining pharmaceutical  IP provisions on data exclusivity, patent linkage, and patent term  extension a central part of its strategy of pursuing the first two IP  negotiating objectives, while it does not see these provisions as being  specifically addressed by the Doha Declaration. Therefore, USTR officials  noted that these three provisions are pursued universally by USTR in all of  its FTAs. USTR officials noted that these provisions are very important for  providing protection similar to that found in U.S. law and for maintaining  incentives for the pharmaceutical industry. USTR officials explained that  USTR does not believe that these three provisions are considered  flexibilities under the Doha Declaration, and therefore sees no conflict  between pursuing them and respecting the Doha Declaration. USTR  officials noted that USTR maintains that these provisions do not restrict a  country’s ability to protect public health.
The pattern of IP provisions negotiated in the 11 FTAs completed to date  confirms USTR’s stated negotiating strategy. Figure 2 demonstrates that  data exclusivity, patent term extension, and patent linkage provisions are  found in all 11 of the FTAs concluded under TPA, regardless of the  development level in the country. Pursuing these provisions also confirms  USTR’s stated strategy of seeking high IP standards related to  pharmaceuticals in trade negotiations. On the other hand, figure 2  indicates that IP provisions on compulsory licensing are found in only 2 of  11 completed FTAs, those with Singapore and Australia, both of which  USTR considered developed countries. Only 3 of 11 FTAs—Singapore,  Australia, and Morocco—contain provisions on parallel imports. Although  Morocco is considered a developing country, USTR officials explained that  Morocco decided in 2000, well before the onset of negotiations, not to  permit parallel imports. Therefore, USTR officials stated that the parallel  importation provision reflected what was already provided in Moroccan  law.
section_title: The Pharmaceutical Industry Supports USTR’s Insistence on Data Exclusivity, Patent Linkage, and Patent Term Extensions, but Others Contend These Provisions Contradict the Principles of the Declaration
paragraphs: Reactions to USTR’s approach to pursuing its TPA objectives in  negotiating FTAs have been mixed, with controversy centered on the three  key provisions of data exclusivity, patent linkage, and patent term  extensions. The pharmaceutical industry stated that it supports the  inclusion of these provisions in FTAs because it believes they maintain  incentives for research and development. However, some experts and  public health advocates have raised concerns that USTR’s approach delays  generic competition and reduces access to medicines. Therefore, they  believe that USTR’s strategy violates the principles and goal of the Doha  Declaration.
subsections: section_title: The Pharmaceutical Industry Considers Data Exclusivity, Patent Linkage, and Patent Term Extensions Key Provisions
paragraphs: Pharmaceutical industry representatives stated that data exclusivity is a  very important IP protection that provides incentives to innovate and  invest in certain markets. Data exclusivity grants a company the exclusive  use of its safety and efficacy test data, necessary to obtain marketing  approval, for a fixed period after the marketing launch. Data exclusivity is  one method by which the innovator company can recoup the costs  involved with conducting clinical tests necessary for marketing approval,  as well as the considerable costs associated with developing a new drug.  Industry representatives explained that they consider patent protection  and data exclusivity to be separate but complementary protections. Both  can generally provide a period of exclusivity. Consequently, data  exclusivity may effectively grant another layer of market exclusivity for  the new product. Figure 3 contains three scenarios of how the periods of  data exclusivity and patent protection can interact to create market  exclusivity under U.S. law.
Some time after the initial drug development takes place, the company  applies for a patent and the 20-year patent term begins. During the patent  term, the company completes all of the drug trials necessary to obtain the  safety and efficacy data needed for marketing approval by the FDA. After  approval is granted, the company can begin marketing its drug, and the set  period of data exclusivity period begins. Industry representatives noted  that the data exclusivity period generally is concurrent with the patent  period and therefore does not add any additional period of effective  market exclusivity, as shown in the first scenario in figure 3. However, as  shown in the second scenario, if marketing approval is obtained further  into the patent term, the 5-year data exclusivity period, which begins when  marketing approval is granted, can extend beyond the term of the patent.  As shown in the third scenario, when no patent protection exists, data  exclusivity effectively provides the entire market exclusivity period.
Pharmaceutical industry representatives stated that the first scenario is  the most typical, with the data exclusivity running concurrently with  patent protection. However, they noted that there are many instances in  which companies do not obtain patents on their products (particularly for  small markets), or patent protection is inadequate or poorly enforced. In  these situations, data exclusivity ensures the innovator company a 5-year  period of market exclusivity. The pharmaceutical industry believes that, in  cases in which there is no patent or very little patent life remains when the  drug first enters the market, data exclusivity is critical because without an  effective market exclusivity period, incentives to research and develop  new drugs are diminished.
Pharmaceutical industry representatives have also advocated for patent  term extensions in FTAs. It is common for a substantial portion of the  patent life to be spent running drug trials. Therefore, the industry argues  that patent term extensions ensure that innovators get enough time to  recoup their costs and maintain the incentives for future innovation. In  addition, industry representatives noted that, in many developing  countries, the delays associated with getting a patent or obtaining  marketing approval for a new drug can be far more extensive than in the  United States. They argue that, under these circumstances, it is even more  critical that a safeguard mechanism exists to ensure that these delays do  not undermine the intentions of patent protection.
Patent linkage is also considered important by the pharmaceutical  industry. Patent linkage provisions in the FTAs provide for delay of  marketing approval if a generic drug product is covered by an unexpired  patent. Pharmaceutical companies claim that generic companies routinely  launch patent-infringing products during the life of a patent in many  developing countries and that patent linkage would help to minimize this  problem.
section_title: Some Experts and NGOs Believe USTR’s Continued Promotion of Data Exclusivity, Patent Term Extensions, and Patent Linkage Conflicts with the Principles of the Doha Declaration
paragraphs: Some experts and NGOs believe that these provisions impair access to  medicines and therefore are contrary to the “spirit” of the Doha  Declaration and TPA guidance. These NGOs, academics, and generic  pharmaceutical producers believe that these provisions limit generic  competition, thereby maintaining high prices for pharmaceutical products,  ultimately impairing access to medicines. These concerns have been  extensively discussed and documented by academics, international  organizations, think tanks, NGOs, and public health groups. Since many  FTA partners implemented these pharmaceutical-related IP provisions for  the first time very recently, it is difficult to identify the tangible effect of  these provisions. However, these groups believe that the inclusion of these  provisions has the potential to decrease public health and therefore is  contrary to the spirit and principles and goal of the Doha Declaration.
Many NGOs argue that the data exclusivity provisions included in U.S.  FTAs will damage access to medicines and public health and worry that  there might be instances where the data exclusivity period could extend  beyond the length of the patent term, as in figure 3, scenario 2. This data  exclusivity period effectively delays entry of generics onto the market,  thereby maintaining monopoly prices for a longer period of time. While  some NGOs recognize that it would be rare for the data exclusivity period  to extend beyond the patent term, they are worried that if this situation  occurs, generic competition will be delayed because of the presence of  data exclusivity. In addition, where the innovator of a new drug did not  obtain a patent in that country, either because it did not apply or because  the new drug was not patentable, data exclusivity will effectively give the  innovator a patent-like period of marketing exclusivity for the entire  period of data exclusivity, from the time marketing approval is granted  (see figure 3, scenario 3). NGOs are also concerned that data exclusivity  provisions might prevent the marketing of generic drugs produced under a  compulsory license. For instance, if a compulsory license is granted to a  generic producer, but that producer is not able to rely on the data  generated by the innovator company to obtain needed marketing approval,  it will not be possible to distribute the drugs under a compulsory license.
Some experts and NGOs are also concerned that variations in the data  exclusivity periods across countries could further delay generic entry. An  FTA partner country must normally provide 5 years of data exclusivity to  the innovator once the product receives marketing approval. If the  innovator waited to apply for marketing approval in the FTA partner  country, thereby delaying the start date of its market exclusivity period, it  would effectively extend the overall market exclusivity period beyond the  intended 5 years. Some FTAs have addressed this issue by specifying that  a country may require the innovator to apply for marketing approval in its  country within a specified period of time. For instance, in the CAFTA-DR  agreement, at their request, a Party may require that the innovator seek  marketing approval in that Party within 5 years after obtaining marketing  approval in any other territory in order to receive data exclusivity. This  way, the innovator company can only delay the start date of its data  exclusivity period by a fixed period of time.
Patent term extension provisions in FTAs have also led to questions about  their effect on access to medicines. Many NGOs and generic  pharmaceutical producers believe that the 20-year patent term in TRIPS  creates a balance between access and innovation and that extending the  patent period would have a detrimental effect on generic competition.  They are also concerned that the patent term extension provisions in U.S.  FTAs do not contain the same limits present in U.S. law. For instance,  under U.S. law, innovators cannot receive more than 14 years of patent  protection through a patent term extension after they have received  market approval, and in any case, the maximum period of extension  determined on the basis of the regulatory review period cannot exceed 5  years. This limit on patent term extensions is not present in FTAs.
Some also assert that patent linkage might negatively affect access to  medicines. The patent linkage process in the United States involves  numerous steps and actors, designed to enable resolution of patent  disputes before marketing approval is granted for a generic drug product.  As shown in figure 4, this linkage system places the burden on the private  companies, not the regulatory authority, to monitor the patent system.
Specifically, the U.S. patent linkage system puts the onus on the generic  company producer to provide information on the applicability of an  existing patent to the drug product for which it is seeking marketing  approval. If the generic company decides to challenge the patent, it must  notify the patent holder within a specified period of time in order to give  the patent holder the chance to sue and defend the patent in the courts.  When the patent litigation is resolved, the FDA can grant marketing  approval to the generic company if the patent is overturned, and may be  obliged to wait until the patent expires if the generic drug product is found  to infringe the patent and the patent is not found to be invalid. NGOs and  generic pharmaceutical producers are concerned that developing  countries do not have the same set of protocols laid out in the FTA  agreement or in their laws, and that this will ultimately affect access to  medicines. Generic pharmaceutical representatives argue that countries  might experience regular abuses and delays in the introduction of generic  drugs if they are unable to institute an effective linkage process.
section_title: Congressional Concern over IP Provisions and Access to Medicines Addressed in Bipartisan Trade Deal
paragraphs: Certain Members of Congress have expressed concern over the  pharmaceutical-related IP provisions in FTAs with developing countries,  and this concern was recently addressed through a bipartisan compromise  between Congress and the administration. Through letters and  correspondence with USTR, certain Members emphasized the need to  better balance IP protection for pharmaceuticals with the promotion of  access to affordable medicines, including through robust generic  competition. These Members expressed unease over the balance achieved  in the FTAs negotiated by USTR to date—specifically, the impact of the  pharmaceutical-related IP provisions in FTAs on developing countries.  These Members urged USTR to ensure that the FTA provisions do not  restrict the availability of generic competition and put affordable health  care at risk. In response to these concerns, in May 2007, Members of the  congressional leadership agreed on a bipartisan compromise with the  administration to revise four of the recently negotiated FTAs, in order to  alter provisions pertaining to a variety of areas, including IP provisions  and access to medicines.
The bipartisan trade deal reached between Congress and the  administration in May 2007 stipulated that certain disputed IP provisions  in FTAs with Peru, Colombia, Panama, and Korea be revised prior to  submission of the agreements for congressional approval, by USTR and  the trading partners. According to USTR officials, the agreement  preserves a strong overall level of IP protection in the FTAs, while  incorporating flexibilities aimed at ensuring that trading partners are able  to achieve the appropriate balance between innovation and promoting  access to medicines. Specifically, USTR revised the FTAs with Peru,  Colombia, Panama, and Korea to include a reference to the Doha  Declaration and the ability of each country to protect public health in the  body of the agreement, instead of in a side letter. In addition, the data  exclusivity provision in each of these agreements was revised to provide  an exception for public health.
The agreements with Peru, Colombia, and Panama were revised further to  alter the language of provisions on patent term extensions, patent linkage,  and data exclusivity. A USTR official stated that USTR and Congress  decided that these additional changes would not be applied to the Korea  FTA in view of Korea’s relatively higher level of economic development.  These additional changes to the Peru, Colombia, and Panama agreements  revised the provisions on patent term extensions and patent linkage in  order to provide more flexibility for trading partners in implementing  these provisions. In addition, the data exclusivity provision was revised  further to ensure that, in some circumstances, the data exclusivity period  in those countries would not extend beyond the period of data exclusivity  provided in the United States. These changes were renegotiated and  finalized by USTR in June 2007.
section_title: USTR Is Implementing and Overseeing Trade Agreements in a Manner Consistent with Its Overall Approach of Promoting High Standards concerning IP Rights
paragraphs: USTR’s approach to implementing and overseeing pharmaceutical-related  IP provisions is consistent with its overall negotiating strategy pursued in  FTAs. Before a signed FTA can go into force, the President determines,  with USTR’s advice, whether the FTA partner has met all obligations,  including, when appropriate, changes in laws and regulations. As part of  this process of advising the President on the determination that he is  required to make under U.S. implementation legislation for FTAs, USTR  has vigorously pursued FTA partners’ implementation of pharmaceutical  provisions related to data exclusivity, patent term extension, and patent  linkage. In fact, in some cases, USTR has continued to work with countries  after the agreement has entered in force. For example, USTR is still  working with Chile to ensure that its data exclusivity provisions are  implemented in a manner consistent with the Chile FTA.
In its broader role of annually identifying countries that deny adequate and  effective protection of IP rights, USTR has frequently raised data  protection and patent linkage, in keeping with its strategy of gaining high  levels of IP protection for pharmaceutical products, similar to U.S. law.  With regard to the Doha Declaration flexibilities, USTR has not generally  pressed for restrictions on compulsory licensing and parallel imports in its  Special 301 reports. Furthermore, USTR has had a measured response to  cases to date of countries actually issuing compulsory licenses. For  example, when Thailand recently issued a compulsory license, USTR  acknowledged its right to do so and thus far is restricting its criticism to a  lack of transparency in the process.
subsections: section_title: USTR Reviews Compliance with FTA Obligations before Agreements Enter into Force
paragraphs: One USTR official noted that USTR oversees FTA partners’  implementation of the pharmaceutical-related IP provisions agreed to in  the FTA in order to ensure that the negotiated standards are implemented  as intended. In order for an agreement to enter into force, the President  determines with the advice of USTR whether the FTA partner has met all  obligations. A USTR official explained that USTR works with the trading  partner to ensure that its IP laws are aligned with the provisions agreed to  in the FTA. The USTR official further explained that, at the start of the  implementation process, the trading partner provides USTR a  comprehensive list of its laws related to each provision in the IP chapter of  the FTA. The trading partner also provides USTR a list detailing the  intended legal changes necessary to bring its laws into compliance with  the agreement. USTR reviews the laws and proposed changes and  provides the trading partner with comments regarding their degree of  compliance. USTR monitors the changes in the other country, and has  numerous exchanges with the trading partner on any legal changes  necessary. One USTR official stated that they are careful to ensure that the  agreement is implemented exactly as it was negotiated. For example, in  response to Guatemala’s proposal to have an exception to data exclusivity  written into its laws, USTR insisted that this exception undercut the  original obligations, and it was therefore unwilling to accept the change.
A USTR official explained that when the legal changes are complete and  USTR is comfortable with the new legislation, USTR makes a  recommendation to the President for the agreement to enter into force.  The administration then makes a determination about the legal  compliance before the agreement can officially enter into force. USTR and  other agencies also provide technical assistance on implementing related  IP provisions to FTA partner and nonpartner governments. (See appendix  II.)
section_title: USTR Vigorously Pursues Implementation of Data Exclusivity, Patent Term Extension, and Patent Linkage
paragraphs: USTR focuses on a wide range of IP provisions including data exclusivity,  patent term extensions, and patent linkage during the FTA implementation  phase to ensure that U.S. trading partners are properly implementing and  enforcing pharmaceutical-related IP provisions. In 2005, Chile reformed its  data protection regime; however, a USTR official stated that USTR has  continued to monitor Chile’s implementation of data exclusivity in  response to concerns raised by the pharmaceutical industry. Specifically,  USTR officials noted that Chile had added a requirement that, in order to  receive data exclusivity, companies must apply for marketing approval  within a year of doing so in other countries. USTR is also monitoring Chile  on specific issues with regard to the implementation of patent linkage and  patent term extensions. In particular, USTR is responding to concerns that  the Chilean health authorities issued a number of marketing approvals of  generic versions of drugs still under patent. Chile appears to have no  provision that would prevent such an approval from being issued during  the patent term. In addition, USTR noted that Chile has yet to implement a  law that would enact patent term extensions to compensate for delays in  marketing approval.
section_title: USTR Has Focused Attention on Data Protection and Patent Linkage in Its Special 301 Report
paragraphs: USTR officials noted that USTR regards the Special 301 report, which is  subject to different statutory requirements distinct from TPA, as an  important tool for overseeing and evaluating the implementation and  adequacy of IP protection worldwide. USTR officials explained that USTR  considers all items that are related to the effectiveness and adequacy of IP  protection in its Special 301 report. They noted that in the Special 301  report there are considerations relevant to adequacy and effectiveness that  sometimes go beyond the minimum standards laid out in TRIPS. In fact,  there are many examples of situations discussed in the Special 301 reports  that are not specifically part of TRIPS. Thus, the Special 301 report tracks  progress of WTO member implementation of TRIPS and trading partner  implementation of FTAs, as well as how adequately countries are  protecting IP rights overall. While the Special 301 report focuses on a wide  range of IP protection issues related to copyrights, patents, and  trademarks, including piracy, counterfeiting, and enforcement, our  analysis focuses only on the pharmaceutical-related issues discussed in  this report. Thus, this analysis focuses only on the countries listed on the  Special 301 report for which pharmaceutical-related issues were  mentioned as a concern, which represent only a subset of the issues  discussed and the total number of countries listed in the Special 301  reports over the years 2000-2007. (See table 1.)
Consistent with its emphasis in FTAs, our analysis of the Special 301  reports indicates that USTR focuses heavily on data protection in its  annual Special 301 reports. For countries listed in the Special 301 reports  over the period 2000 through 2007 for whom pharmaceuticals was cited as  an issue of concern, data protection was mentioned in almost every case.  In fact, data protection is the most frequently mentioned of all  pharmaceutical issues in the Special 301 reports over that 8-year period,  appearing a total of 173 times. (See figure 5.)
USTR’s focus on patent linkage is also similar to its negotiating strategy in  FTAs. The second most frequently mentioned pharmaceutical provision in  Special 301 reports from 2000 through 2007 is patent linkage, which is  mentioned 56 times. Pharmaceutical counterfeiting is also discussed  somewhat regularly in the Special 301 reports over this period, but not as  frequently as data protection or patent linkage.
section_title: USTR Has Only Infrequently Mentioned Compulsory Licensing or Parallel Imports in Special 301 Reports
paragraphs: There is limited mention of compulsory licensing or parallel imports in the  Special 301 reports. In the Special 301 reports from 2000 through 2007,  compulsory licensing regarding pharmaceuticals is only mentioned nine  times, while parallel importing related to pharmaceuticals is mentioned  only three times. While the IP objectives in TPA do not control the  coverage of the Special 301 reports, USTR’s approach to these two  provisions referenced in the Doha Declaration seems similar. USTR  officials explained that USTR recognizes that the TRIPS agreement allows  countries some flexibility regarding the use of compulsory licenses and  parallel imports when protecting public health. By not mentioning these  provisions frequently in the Special 301 report, USTR acknowledges the  existence of these flexibilities, as highlighted in the Doha Declaration.  However, USTR officials also noted that the infrequency with which these  provisions are mentioned is due to the fact that the trading partners rarely  make use of these flexibilities.
section_title: USTR Has Acknowledged Thailand’s Right to Issue a Compulsory License, but Criticized Its Lack of Transparency
paragraphs: Thailand recently issued a compulsory license on a pharmaceutical  product, citing a public health need. In November 2006, Thailand issued a  compulsory license on a drug for treating HIV/AIDS, followed by two more  compulsory licenses issued in early 2007 for another HIV/AIDS drug and a  heart disease medication. These compulsory licenses are government-use  licenses issued under Thai law. The government of Thailand announced  that these decisions were aimed at improving access to essential  medicines and public health in Thailand. In addition, Brazil issued a  compulsory license for one of the same HIV/AIDS drugs in May 2007.
Public reaction to Thailand’s and Brazil’s actions has been mixed, with  some defending their right to issue a compulsory license and others  criticizing their actions as irresponsible. For instance, the pharmaceutical  industry believes that the compulsory licenses were unnecessary and will  ultimately negatively affect drug innovation, and is concerned the licenses  will set a precedent for similar actions. However, many NGOs stated that  they support countries like Thailand and Brazil using their right to issue  compulsory licenses in order to improve access to medicines in their  countries.
USTR’s response to Thailand’s and Brazil’s issuance of compulsory  licenses has been more measured. USTR officials told us that in all  speeches, letters, and private conversations, USTR tried to recognize and  convey that Thailand has the ability to issue compulsory licenses.  However, they noted that, when issuing a compulsory license, it is  important that the issuer engage with all of the affected stakeholders,  including patient groups and patent holders, about the best way to meet  public health needs. In both the Brazil and Thailand cases, USTR has tried  to focus on the procedures and processes followed by the governments,  rather than on the validity of the licenses. USTR officials noted that, in  general, they are reluctant to insert themselves into price negotiations  between governments and the pharmaceutical industry, but that they will  advocate for transparency.
Although USTR mentioned both the Thai and possible Brazil cases of  compulsory licensing in the 2007 Special 301 report, the report limited its  criticism to issues of good governance. USTR officials noted that, at the  time the report was issued, all three compulsory licenses had already been  issued by Thailand, and that they believed the Brazilian compulsory  license was imminent. For example, in the Thai case, USTR was careful in  its report to recognize a country’s ability to issue compulsory licenses  subject to WTO rules and the country’s domestic laws. However, it  expressed concern about what it considered to be the lack of transparency  exhibited in Thailand, and emphasized the need for such transparency in  discussions with all relevant stakeholders in Brazil.
USTR officials stated that the decision to elevate Thailand from the watch  list in its 2006 Special 301 report to the priority watch list in 2007 was  based on broad IP concerns, not solely on its compulsory license decision.  They explained that there were many major IP concerns in Thailand and  many complaints that fueled their decision. In addition, they noted that,  while Thailand was raised to the priority watch list, Brazil, which was also  about to issue a compulsory license at the time, was lowered from the  priority watch list to the watch list. They said that Brazil’s standing  improved due to impressive work in other areas of IP enforcement, and  that the imminent compulsory license did not alter USTR’s decision to  improve Brazil’s standing. Nevertheless, in its 2007 Special 301 report,  USTR noted that it will conduct an out-of-cycle review to evaluate Brazil’s  progress in other areas and encourage additional progress in areas of  outstanding concern.
section_title: Public Health Input on IP Rights Has Been Limited in U.S. Trade Negotiations
paragraphs: Since TPA, public health input into U.S. trade negotiations has been  limited. In negotiating trade agreements under TPA, the President must  seek advice and information from executive departments and the public  and private sectors. Although U.S. agencies generally support USTR’s  negotiations approach, interagency input on U.S. trade negotiations has  not addressed the public health implications of IP pharmaceutical  provisions negotiated under TPA and has been primarily technical in  nature. For instance, HHS, the lead U.S. agency on global public health and  social welfare issues, endorses USTR’s negotiating approach that strong IP  protection promotes public health and access to medicines. However, HHS  advice during trade negotiations has generally concentrated on technical  advice from one of its subagencies, the Food and Drug Administration  (FDA), to ensure that FTA provisions related to pharmaceuticals do not  violate U.S. law and are consistent with U.S. health regulations. HHS has  not addressed policy questions related to whether FTA provisions might  affect public health in FTA partner countries. Within the formal private  sector advisory system, two public health representatives were recently  added to two private sector Industry Trade Advisory Committees (ITACs)  after USTR had concluded nine trade agreements. These two committees  are respectively composed of 20 and 33 private sector representatives  from the pharmaceutical and other industry sectors. USTR has obtained  some public health perspectives from stakeholders through other formal  and informal means, including public hearings, Federal Register  comments, and written correspondence.
subsections: section_title: The Departments of Health and Human Services and State Endorse the View that IP Protection Supports Access to Medicine
paragraphs: HHS officials told us they support the USTR position concerning the Doha  Declaration and agree with USTR’s view that strong IP protection  promotes innovation and access to medicines. The agency supports the  administration’s vision for both global health and overall U.S. foreign  policy, and HHS’s Office of Global Health Affairs (OGHA) is the U.S. focal  point for policy coordination across multilateral health and science  organizations. According to OGHA officials, the FDA’s generic drug  preapproval process is a key example of HHS efforts to balance high IP  standards and access to medicines. Officials stated that the FDA generic  drug preapproval process exhibits HHS support for creating a market for  high quality generics that meet international standards. The agency has  also supported USTR’s interpretation of TRIPS flexibilities in multilateral  discussions about IP and public health, such as those held at WHO.  According to officials, HHS’s OGHA coordinates U.S. policy inputs and  interests as they pertain to IP rights and public health in WHO, ensures  that the U.S. policy position at WHO meetings reflects administration  priorities, and works with USTR and other U.S. agencies to advance U.S.  IP and public health interests internationally. Most recently, HHS hosted  the newly formed WHO Commission on Intellectual Property Rights,  Innovation, and Public Health, and has been the lead federal agency in  coordinating the U.S. response across agencies, including USTR, to a 2006  WHO report on IP rights and public health.
State Department officials also support the USTR’s view that IP protection  is important for promoting access to medicines. However, State  Department officials said they principally demonstrate the U.S. strategy to  balance IP rights and public health through various programs and  initiatives. For example, State’s Office of the Global AIDS Coordinator  (OGAC) works with several other agencies, including HHS, to implement  the President’s Emergency Plan for AIDS Relief (PEPFAR), which has  programs in over 120 countries and a special focus on 15 countries that are  primarily located in sub-Saharan Africa. OGAC and USAID also worked  with the FDA to develop the generic drug preapproval process to support  the purchase of low priced, high quality drugs for the PEPFAR program.  This effort resulted in the preapproval of over 50 generic antiretrovirals  (ARV) to date and almost $2 million in savings on generic drug purchases  in 2006. In addition, USAID developed a centrally managed contract, the  Partnership for Supply Chain Management, in order to work with generic  companies to address drug supply chain challenges and increase research  and development for a steady supply of ARVs in developing countries.
section_title: Interagency IP Rights and Public Health Perspective Is Limited to Technical Advice
paragraphs: USTR has obtained some input on IP rights and public health in trade  negotiations through the formal interagency trade policy process, but  public health perspectives on USTR’s negotiating approach to  pharmaceutical issues in FTA negotiations are primarily technical in  nature and have not included an examination of the public health impacts  of FTA provisions. USTR coordinated with HHS when it first began to  formulate its basic policy goals for negotiating FTAs, and HHS has had the  opportunity to review draft FTA texts through the interagency advisory  system. However, HHS has had limited involvement in the actual trade  negotiations. According to USTR, most public health issues are worked  out in advance of the negotiations. HHS and USTR occasionally convene  an interagency working group to discuss IP rights and public health issues  that arise at WHO or in other multilateral fora.
Although USTR routinely briefs HHS after each round of FTA negotiations,  OGHA officials stated that the health agency’s role in trade, IP rights, and  the negotiation of pharmaceutical-related IP provisions in FTAs has  primarily involved providing technical expertise through its subagencies  when requested by USTR. For example, FDA officials stated that their  overall mission is generally not related to trade, but instead focuses on  regulatory matters as they affect public health. The agency offers technical  advice to USTR during negotiations to ensure that FTA provisions related  to pharmaceuticals do not violate U.S. law and are consistent with U.S.  health regulations. For instance, the FDA has provided a perspective on  regulatory issues in FTAs to ensure that provisions do not have  implications for U.S. regulatory programs. HHS officials also stated that  they have no role in assisting countries in pursuing objectives of the Doha  Declaration. Although they have good working relationships with the  health ministries of many countries, conversations generally focus on  technical advice with regard to regulatory issues. For example,  subagencies such as the FDA may provide regulatory advice and guidance  to FTA partners, during negotiations or FTA implementation, on the  regulatory responsibilities associated with various IP provisions, the  manner in which provisions function in the United States, and how U.S.  regulatory systems operate.
OGHA officials told us they are satisfied with HHS’s role and input in the  interagency advisory process and the public health considerations  provided in U.S. trade negotiations and policy, and the office does not  believe IP provisions in FTAs restrict access to medicines. However, there  is little evidence that USTR consulted with HHS or OGHA regarding FTA  partner countries’ concerns about the potential impact on public health of  specific pharmaceutical provisions in FTAs since the Doha Declaration  and the Trade Promotion Authority Act of 2002 were agreed upon,  although the HHS OGHA’s mission includes promoting the health of the  world’s population. OGHA officials noted that USTR has never approached  them to discuss such country concerns about public health. According to  USTR officials, USTR does not generally talk to HHS about countries’  concerns about the public health impact of FTA provisions, but instead  relies on the countries themselves to raise concerns, since developing  countries know their own public health systems and needs better than any  U.S. agency would. Similarly, HHS has not been asked by USTR to conduct  analyses of the impacts of FTA provisions on regulatory institutions in  partner countries, and HHS has not provided such an assessment. There is  also little evidence that the agencies have determined whether the FTAs  affect public health, either positively or negatively, and HHS officials  stated they do not have the technical capacity to do so.
Similarly, the PTO Office of International Affairs is involved in the FTA  negotiations process as a technical advisor under its statutory authority  regarding IP issues. The office advises USTR on WTO issues and FTAs,  meets with USTR to discuss strategy before each round of FTA  negotiations, and participates in the negotiations. For example, USTR may  ask PTO’s opinion about the use of a particular technical term. PTO also  provides technical advice and training to FTA partner countries on  pharmaceutical IP provisions during FTA negotiations, and provides  clarification on the interpretation of negotiated provisions. For instance, in  the CAFTA-DR negotiations, partner countries asked PTO to explain data  exclusivity in further detail and how the provision functions in the United  States. According to officials, PTO never states that the U.S. method of  implementing a particular provision is the only way to implement or fulfill  a particular FTA obligation, but instead simply provides U.S. examples.
The State Department is also involved in interagency coordination on  trade and public health through the interagency advisory system as well as  during FTA negotiations, but agency officials stated that trade and IP  efforts are only one small part of the larger U.S. government effort to  increase access to medicines. USTR consults with State through the  formal interagency advisory review process, and State officials are  included in all discussions of IP chapters in the FTAs. However, the  agency primarily makes an effort to balance IP rights and access to  medicines through public health initiatives it coordinates with other  agencies or administers itself, such as PEPFAR. USAID has extensive  global health programs and had some involvement in policy discussions at  the time of the Doha Declaration. The development agency has had little  or no involvement in such discussions since, however.
section_title: Public Health Representatives Were Recently Added to the Industry Trade Advisory Committees
paragraphs: In January 2007, public health representatives were added to the two  technical ITACs most relevant to pharmaceuticals and IP rights—the  chemicals committee (ITAC-3) and the IP committee (ITAC-15)—where  multiple brand-name pharmaceutical companies serve. However, by the  time that USTR and the Department of Commerce had appointed one  public health representative to each of these two committees, USTR had  concluded nine FTAs.
According to Commerce officials, the appointments were prompted by an  April 2005 request by an NGO for public health perspectives in several of  the industry trade advisory committees. Within 3 months, Commerce and  USTR agreed to consider adding public health representatives to the  industry advisory system, but the appointments were delayed until 2007.  Although USTR and Commerce indicated at least one public health  representative would be appointed to both the IP committee and the  chemicals committee in December 2005, a coalition of NGOs filed a  lawsuit against USTR during the same month for public health  representation on six other ITACs in the trade advisory committee system  as initially requested in 2005. The lawsuit is pending an appeal, after an  initial ruling dismissing the case on the grounds that the court could not  find any meaningful standards in the Trade Act of 1974 under which it  could judge the balance of the membership of the trade advisory  committees. Due to the ongoing litigation relating to the composition of  the trade advisory system, we do not make any judgments about the  appropriateness of a particular committee’s composition.
USTR maintains that representatives in other trade advisory committees  provided public health input on FTAs. For instance, USTR noted that  Trade and Environment Policy Advisory Committee (TEPAC) members  had access to the secure private sector advisory Website, and that some  groups in that committee had expressed concern about provisions in  several FTAs. Specifically, some environmental and consumer group  NGOs on the committee have submitted concerns to USTR in committee  reports on the FTAs about the impacts certain FTA provisions have on  public health and access to medicines. In an alternative opinion attached  to several committee reports, the minority group of TEPAC  representatives maintained that U.S. FTAs are inconsistent with the Doha  Declaration on TRIPS and Public Health and that FTA provisions on data  exclusivity and patent linkage, as well as limitations on the use of  compulsory licensing, reduce access to medicines. They recommended  that Congress not approve some FTAs and requested Congress to take  their public health concerns into account when considering other FTAs.
There is little evidence that USTR discussed the concerns submitted about  the public health impact of FTAs with U.S. health agencies or other  members of the public health community. A member of the TEPAC  committee also noted that although the environmental advisory committee  reports provided to USTR include the committee members’  recommendations or concerns about public health in FTAs, there is little  dialogue between USTR and committee members on these issues. In the  member’s opinion, this is because the advisory consultations are not  integrated into the FTA negotiations process, which limits the ability of  members to advise USTR on the issues that arise during negotiations,  including public health concerns, as opposed to after a draft has been  developed. However, USTR notes that the concerns have been raised and  discussed by the USTR personally during TEPAC meetings.
section_title: The Committees on Which Public Health Representatives Participate Are Composed of a Majority of Other Private Sector Industry Stakeholders
paragraphs: The two individuals that were appointed as public health representatives  on the ITACs individually serve on committees that are respectively  composed of a total of 20 and 33 private sector representatives from the  pharmaceutical and other industry sectors. (See figure 6.) Commerce  officials explained that, in selecting among the 10 applicants who  responded to the Federal Register notice, they considered candidates’  backgrounds to determine if the candidates understood both relevant IP  issues and which public health concerns would be relevant to the  intersection of public health, international trade, and IP rights or  pharmaceuticals, respectively, as relevant to the work of the committees.  According to these officials, the selection committee also tried to ensure  that the representatives would make meaningful contributions to the  committees and have the weight necessary to challenge the committees  when necessary. Commerce officials did not believe it was necessary to  have two public health representatives on one committee representing the  same view, and they said that they did not find any other viable candidates  with additional perspectives beyond the individuals selected. However,  Commerce officials stated that the Federal Register notice announcing the  positions on the ITACs remains open. If additional qualified public health  candidates applied would contribute another perspective to either of these  two committees applied, they said the agency would consider adding  additional public health representation.
section_title: USTR Has Received Public Health Input through Other Formal and Informal Means
paragraphs: Our review showed that, although USTR has received limited input on  public health through formal advisory system communications channels, it  has received public health input through other formal and informal  processes, including input from the pharmaceutical industry and the  public health community. Pharmaceutical Research and Manufacturers of  America (PhRMA), the pharmaceutical industry trade group, has  submitted annual reports to USTR on industry concerns about IP rights  globally for the agency to consider in developing its Special 301 report.  Both pharmaceutical industry representatives and public health  community members have also provided input on IP rights and public  health concerns for several FTAs that have been concluded through  USTR’s formal public hearings and the Federal Register comments. In  addition, USTR has received and responded to congressional  correspondence regarding members’ public health concerns about the  impact of FTAs. According to USTR officials, while there are some minor  modifications to FTA texts during each negotiation, the public health  community is aware of the provisions the United States proposes to be  included in each agreement, given past FTAs implemented, and may also  provide public health input through more informal mechanisms. For  example, USTR has received and responded to some informal input on  public health in trade negotiations through correspondence with NGOs.  Moreover, USTR officials noted that they have an open door policy and  will meet with anyone who requests a meeting, including NGOs, public  health representatives, and generic industry representatives. Both USTR  and private sector representatives, including NGOs, have confirmed that  private sector representatives have provided informal input to USTR on  public health concerns, in particular FTAs, through phone calls or  requested meetings. However, input USTR receives through such channels  may lack the weight of formal private sector input on public health issues  in trade agreements, such as trade advisory committee reports on  proposed trade agreements that are transmitted to the administration and  Congress.
section_title: Conclusions
paragraphs: USTR has followed a consistent approach in negotiating, implementing,  and monitoring its trade agreements under TPA—namely, by protecting  the minimum standards of IP rights provided in TRIPS and promoting high  IP standards similar to U.S. law. Other than making concessions on  compulsory licensing and parallel importation provisions, and on side  letters that state that the IP chapter does not affect a country’s ability to  take necessary public health measures, USTR has not changed its  uniformly high demands with regard to IP protection in its FTAs. The  degree to which USTR’s policy has achieved the right balance of IP  protection and attention to public health, and more specifically whether it  has respected the Doha Declaration as called for under TPA, depends in  part on the stakeholder asking the question. This reflects a fundamental  tension between protecting IP rights in order to allow companies to  recoup investment and encourage innovation for the long term, and  allowing competitors to sell lower cost drugs for short term public health  needs. As Congress contemplates renewal of TPA, there are ongoing  questions about the overall balance of IP rights and public health.
section_title: Matter for Congressional Consideration
paragraphs: If Congress disagrees with USTR’s interpretation and implementation of  TPA guidance with regard to IP rights and public health, it should specify  more clearly its intentions for U.S. trade policy and public health policy  input related to balancing public health concerns and the negotiation of IP  rights in trade agreements.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided the U.S. Trade Representative; the Secretaries of the  Departments of Commerce, Health and Human Services, and State; the  Administrator of the U.S. Agency for International Development; and the  Under Secretary of Commerce for Intellectual Property and Director of the  United States Patent and Trademark Office with a draft of this report.  The  U.S. Trade Representative; the Secretaries of the Departments of  Commerce, Health and Human Services, and State; and the Administrator  of the U.S. Agency for International Development chose to provide  technical comments.  We modified the report where appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution of it until 30 days from  the date of this letter.  At that time, we will send copies of this report to  the U.S. Trade Representative; the Secretaries of the Departments of  Commerce, Health and Human Services, and State; the Administrator of  the U.S. Agency for International Development; and the Under Secretary of  Commerce for Intellectual Property and Director of the United States  Patent and Trademark Office.  We also will make copies available to  others upon request. In addition, the report will be available at no charge  on the GAO Web site at http://www.gao.gov.
If you or your staff has any questions concerning this report, please  contact me at (202) 512-4128 or at yagerl@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. GAO staff members who made major contributions  to this report are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: To evaluate how the U.S. has interpreted the intent and meaning of the  Doha Declaration, we performed document reviews on agency  documentation and correspondence as well as WTO documents, and  conducted interviews. We also reviewed academic studies, pharmaceutical  industry reports, position papers, and media reports. Specifically, we  examined relevant WTO legal documents, including the declaration on  TRIPS and Public Health; the 2003 General Council Chairperson’s  statement; the August 30, 2003, General Council Decision on the  Implementation of Paragraph 6 of the Doha Declaration on TRIPS and  Public Health; the December 6, 2005, General Council Decision on the  Amendment of TRIPS; and relevant articles of the TRIPS agreement. We  reviewed WTO TRIPS Council minutes and other official documents,  reviewed USTR official documents, interviewed USTR officials in  Washington and Geneva, and interviewed WTO officials and WTO country  representatives in Geneva.
To investigate how the United States negotiates and oversees  implementation of IP provisions related to pharmaceuticals in its trade  agreements, we interviewed USTR officials, reviewed agency documents,  and examined the text of the FTAs negotiated since the Trade Act of 2002.  We spoke to USTR officials about their views on the three IP negotiating  objectives in TPA and their overall approach for pursuing these objectives.  Specifically, we learned about the pharmaceutical provisions pursued by  USTR in the IP chapter of its FTAs, and how the pursuit of these  provisions relates to their negotiating approach. We also reviewed agency  documentation of negotiating policy, draft texts of FTAs, and other types  of documentation in order to further examine the IP negotiating policy  pursued by USTR. In order to analyze the patterns and results of USTR’s  stated approach, we reviewed the text of each of the 11 FTAs negotiated  under TPA. We evaluated the pharmaceutical-related IP provisions in each  agreement and catalogued which related provisions were present in the  final text of each agreement. Using this information, we were able to  identify patterns and thereby confirm USTR’s stated policy regarding the  pursuit of these provisions. We did not assess the reliability of the per  capita income data contained in figure 2 because we are providing them as  background information only.
In addition, we interviewed officials from Department of State,  Department of Health and Human Services (HHS), Department of  Commerce, the Patent and Trademark Office (PTO), and the U.S. Agency  for International Development (USAID) in order to obtain their  perspectives on the pharmaceutical provisions pursued in the FTAs. We  performed literature reviews of articles and studies documenting the  multiple opinions regarding these provisions pursued by USTR. From this  literature review and from agency meetings, we identified numerous  stakeholders and experts to speak with, including pharmaceutical industry  representatives, public health groups, NGOs, academics, and IP experts.  These groups include Pharmaceutical Research and Manufacturers of  America (PhRMA), Generic Pharmaceutical Association, (GPhA), The  International Federation of Pharmaceutical Manufacturers & Associations  (IFPMA), Oxfam, Doctors without Borders (MSF), Essential Information,  Consumer Project on Technology, Health Global Access Project (GAP),  Health Action International, Center for Policy Analysis on Trade and  Health (CPATH), Access to Drugs Initiative (ADI), Third World Network,  Center for International Environmental Law (CIEL), International Center  for Trade and Sustainable Development (ICTSD), Drugs for Neglected  Diseases Initiative (DNDI), as well as three academics, two intellectual  property lawyers, and three public health experts specializing in this area.  We interviewed these stakeholders and experts in order to gather a  complete perspective on USTR’s negotiating strategy and the  pharmaceutical-related IP provisions present in the FTAs. We also traveled  to Geneva, Switzerland, to meet with officials from the U.S. Mission in  Geneva; World Trade Organization (WTO); World Health Organization  (WHO); World Intellectual Property Organization; The Joint United  Nations Program on HIV/AIDS; United Nations Development Program; the  Global Fund to Fight AIDS, Tuberculosis and Malaria, as well as NGOs  from the pharmaceutical sector and public health community.
In order to examine how USTR implements and oversees its trade  agreements, we interviewed USTR officials, reviewed agency  documentation, and analyzed USTR’s annual Special 301 reports. We  spoke to USTR officials and reviewed agency documentation about their  approach to implementing and overseeing its trade agreements. In  addition, we examined trends and patterns of citations found in USTR’s  annual Special 301 reports in order to analyze how USTR oversees its  trade agreements with respect to IP provisions related to pharmaceuticals.  We reviewed each Special 301 report from 2000 to 2007 in order to identify  every mention of a pharmaceutical-related issue for all countries listed on  the priority watch list, the watch list, and the Section 306 list. For each  country listed in the report in every given year, we noted whether the  report mentioned anything related to a pharmaceutical issue or concern.  We reviewed the reports using decision rules we developed to identify the  most frequently discussed pharmaceutical issues in Special 301 reports  over this period. To enhance the accuracy and soundness of our review,  two GAO staff members conducted independent reviews of the reports.  These staff members had a high degree of concurrence in the  pharmaceutical issues they identified and were able to reconcile the  instances where they differed initially. We also interviewed USTR officials  about some of the factors considered during the Special 301 process in  order to determine limitations to our analysis. Limitations to our analysis  include the inherent selection bias in the USTR reports, since the Special  301 report does not capture each IP concern in every country. Also, there  are numerous factors governing a country’s inclusion, but USTR generally  focuses on countries with relatively higher levels of development. The  analysis is also limited to only pharmaceutical-related issues raised in the  Special 301 report over this period and does not capture the weight of  each concern. In addition, pharmaceutical counterfeiting may be  undercounted in this analysis due to the fact that it may be subsumed into  more general references to trademark counterfeiting and inadequate  enforcement. We also obtained and compared the input provided to USTR  by U.S. embassies and the pharmaceutical industry. Additionally, we spoke  to USTR officials about the factors taken into account for the 2007 Special  301 report, specifically regarding the decision of Thailand and Brazil to  issue compulsory licenses on pharmaceutical products.
To investigate how USTR assists other countries in implementing FTAs  and TRIPS obligations, we interviewed agencies involved in providing  technical assistance to FTA partner and nonpartner countries, including  USTR, HHS, PTO, and USAID. We spoke with agency officials about the  type of technical assistance they provide on the FTAs, Doha Declaration  flexibilities, and public health and about the audience receiving the  assistance. We also reviewed technical assistance and training-related  documents and correspondence to corroborate the testimonial evidence.
In order to evaluate the extent of formal and informal IP and public health  input into USTR’s trade agreement negotiations, we examined the formal  interagency advisory process, the formal industry advisory committee  process, and several informal means for providing input to USTR. To  examine the level of interagency consultation on trade, IP, and public  health issues between USTR and the Department of State, HHS,  Department of Commerce, PTO, and USAID, we reviewed documentation  of interagency discussions related to the TRIPS Doha Declaration and  FTAs. Limited documentation was available.  We also interviewed USTR,  Commerce, HHS, State, PTO, and USAID officials about their roles in the  interagency advisory process and the public health input they provided or  received during WTO discussions on the TRIPS and Public Health  Declaration and during FTA negotiations.
To evaluate the type and extent of public health input USTR received  through the industry trade advisory process, we reviewed industry  advisory committee reports for the IP and chemicals committees, as well  as the trade and environment committee. We also evaluated the  membership of the IP and chemicals industry advisory committees to  determine the composition of industries and interests represented.  However, we did not make any judgments about the appropriateness of  any particular committee’s composition. In addition, to better understand  the selection and appointment process for the public health  representatives on the IP and chemicals industry advisory committees, we  interviewed USTR, Commerce, and HHS officials and reviewed  documentation related to the representatives’ appointments. We also  spoke with the primary NGO involved in the initial request for public  health representation on the industry advisory committees, as well as  several other NGO and academic members of the public health  community, about their views on the public health representative  appointments. Moreover, we interviewed selected members of the trade  and environment committee, to obtain perspectives on the advisory  process and public health input provided to USTR through it.  Furthermore, we reviewed records of USTR’s public hearings on FTAs,  Federal Register notice comments, and congressional and private sector  correspondence with USTR on the FTAs and the issues of IP rights and  public health. We also spoke with several NGOs about public health input  they provided to USTR through meetings and phone calls.
section_title: Appendix II: Technical Assistance on IP Rights and Public Health
paragraphs: Technical assistance on IP rights and public health to FTA partner and  nonpartner governments has been limited and provided mostly upon host  country request. According to USTR officials, U.S. negotiators review each  FTA provision in the text with the signatories, at which time they may also  ask for technical assistance. Also, FTA partner countries always have the  option of requesting trade-capacity building assistance from the United  States at the conclusion of negotiations. However, USTR has never had a  request for TCB on the Doha Declaration, and only on IP matters related to  enforcement. USTR does not initiate technical assistance on FTA  provisions and the use of TRIPS flexibilities, but responds to country  requests, which it forwards to the appropriate agency. U.S. agencies tend  to provide technical advice to FTA partner governments on regulatory  issues, rather than public health issues. For example, the FDA has  provided technical assistance to partner countries in developing  implementing regulatory measures. Similarly, technical assistance  activities conducted by USAID and PTO include conferences, workshops,  capacity-building cooperation agreements, and patent program certificate  programs on topics such as international IP standards in TRIPS, drafting  trade reform legislation, and enforcement of IP rights. Specific IP issues  discussed include data exclusivity, patent extensions, and implications of  FTA IP rights commitments.
According to USAID officials, USAID can provide technical assistance if  the host country has requested assistance in a particular area. Although  FTAs have helped promote training in the area of intellectual property and  public health, the agency has not done much work on those topics. USAID  officials said that most training occurs during FTA negotiations, but FTA  partner countries often receive the training from WTO or another third  party in order to gain a more objective training or perspective than they  believe they would receive from the United States. Similarly, according to  PTO officials, most requested PTO training is with respect to FTA  agreements and primarily focuses on the implementation and enforcement  of FTA provisions, and the audience is generally patent examiners  conducting enforcement activities. The PTO Global IP Academy,  established in 2005, is another example of PTO’s technical assistance on IP  matters to other countries, whereby PTO trains foreign officials on IP  enforcement. The agency also advises countries on drafting implementing  legislation and the development of compliance regulations.
Agencies also provide general technical assistance to countries on TRIPS  obligations. For example, Commerce’s Commercial Law Development  Program, which receives some funding from USAID, has provided training  to Pakistan on TRIPS and the role of U.S. agencies in domestic patent and  data protection. However, according to USTR, most requests related to  TRIPS IP issues fall in nonpharmaceutical IP areas, such as trademark  registration, enhancing patent processing, or enforcement capacity. PTO  officials stated that they offered a course on biotechnology that covered  all aspects of patent, copyright, and trademark WTO provisions. The State  Department has also provides a standard training on IP rights to U.S.  Foreign Service Officers through the Foreign Service Institute (FSI), which  includes basic information on patents, data protection, and other U.S. and  TRIPS IP provisions. The training also provides an overview of the Doha  Declaration and TRIPS flexibilities, including the use of compulsory  licenses, as well as a summary of the U.S. government’s objectives for  access to medicines.
While there has been no proactive agency effort to assist countries in using  the Doha Declaration TRIPS flexibilities, agencies have developed and  provided some information upon request. USAID has worked closely with  USTR to develop such U.S.-sponsored training that is TRIPS compliant and  has recently added discussion about the Doha Declaration and the  implementation of compulsory licensing into training on the use of TRIPS  flexibilities. For instance, USAID funded a presentation in Lebanon on  TRIPS implementation in response to requests for assistance with its WTO  accession. In addition, USAID technical assistance projects were  implemented in Egypt related to IP rights and public health, including a  conference on IP and pharmaceuticals that covered TRIPS, the Doha  Declaration, compulsory licensing, and data exclusivity, under the  auspices of the prime minister and minister of health. Similarly, USAID  presented in Uganda a workshop on Developments at Doha, including  TRIPS and public health, as part of assistance taking place in December  2001 and January - February 2002. USTR stated that Honduras also  conferred with the United States about how to use the paragraph six  waiver to issue a compulsory license, but the drug was not under patent  and training was ultimately not necessary. PTO has also conducted  training on relevant IP provisions, including on U.S. laws and regulations  related to data exclusivity and patent linkage, in response to country  requests. PTO officials emphasized, however, that it is not PTO’s role to  ensure that these countries implement the provisions in the same manner  as the United States. In fact, PTO makes an effort to understand the  country’s legal context and capacity so that its advice is appropriate to its  circumstances.
In addition, U.S. agencies offer some assistance related to technology  transfer, which is referred to in paragraph seven of the Doha Declaration  on TRIPS and Public Health.  For example, HHS provides significant  assistance to developing countries though its technology transfer  activities.  The National Institutes of Health (NIH) has developed  innovative programs to improve how technologies are transferred to  developing countries, particularly by identifying those biomedical research  companies and institutions that have the interest and capacity to receive  and develop new biomedical products.  According to HHS officials, NIH  has one of the largest biomedical technology transfer offices in the world.   NIH’s Office of Technology Transfer (OTT) has successfully transferred  technologies, mostly for infectious disease diagnosis, treatment and  prevention, to institutions in developing countries such as India, Mexico,  Brazil, China, Egypt, and South Africa and currently is working with  institutions in other developing countries.  NIH OTT has also initiated a  limited international technology transfer capacity building program to  train scientists and managers from institutions in developing countries  about intellectual property management and other technology transfer- related matters.  Similarly, USAID is involved in some technology transfer  assistance.  According to agency officials, USAID recently established a  technology transfer program in Columbia to assist the local generic  industry.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: Kim Frankena, Assistant Director; Nina Pfeiffer; Diana Blumenfeld;  Suneeti Shah; Yesook Merrill; and Grace Lui made significant  contributions to this report. Martin De Alteriis, Karen Deans, and Etana  Finkler also provided assistance.