Problems with Current U.S. Policy.

Despite the legality of compulsory licensing and parallel importing, and despite the public health emergency enveloping much of the developing world, the U.S. until mid-1999 actively opposed developing country efforts to implement compulsory licensing, parallel imports, or other measures to make HIV/AIDS drugs more affordable and available in their countries.

The U.S. position suddenly changed, however, beginning in June 1999. Although the growing evidence of the scale of the unfolding horror of the HIV/AIDS pandemic in Africa contributed to the shift, what actually changed U.S. policy was protests by AIDS activists. When Al Gore formally announced that he was running for president, his speech was interrupted by activists chanting, "Gore's Greed Kills." Two of his next three speeches were similarly disrupted. Immediately thereafter, the White House began reaching out to activists, indicating it was looking at changing its position.

In June 2000, Gore told the Congressional Black Caucus that policy on access to medicines was shifting. In September, the administration announced it would cease pressuring South Africa to repeal its Medicines Act, which would permit compulsory licensing and parallel imports (and which remains on hold, while an industry lawsuit in South African courts proceeds). During the November-December WTO meetings in Seattle, the Clinton administration announced it would offer special treatment for health-related intellectual property disputes, taking into account health issues as well as commercial concerns. When efforts to make the policy into law as part of the Africa Growth and Opportunity Act floundered--and threatened to impede passage of the Act--the Clinton administration issued an executive order, which stipulated that the U.S. would not challenge TRIPS-compliant policy measures to make AIDS medicines available anywhere in Africa.

In February 2001, with ever-heightening attention on the AIDS crisis and growing interest in what posture the Bush administration would adopt on controversial intellectual property issues, the Bush administration indicated it would continue the Clinton administration's policy regarding not challenging initiatives making AIDS medicines more available, as long as they are TRIPS-compliant.

Even with the revised position, however, significant problems remain with various U.S. policies related to access to essential medicines.

The executive order itself is limited by application only to sub-Saharan Africa and only to AIDS medicines. A pervasive problem in U.S. policy, even after the 1999 policy shift, is the treatment of compulsory licensing as an exceptional policy tool to be used only in emergency circumstances. In fact, the WTO's TRIPS agreement considers compulsory licensing a standard part of the intellectual property regime.

In diverse international trade negotiating fora, the U.S. is seeking to increase the monopoly protections afforded by patents, and diminish the ability of countries to do compulsory licensing and parallel importing. The U.S.-Jordan Free Trade Agreement, completed in fall 2000 and expected to be considered by Congress in 2001, sharply limits the grounds for compulsory licensing. The published summary of the U.S. negotiating position for the intellectual property portion of the proposed Free Trade Agreement of the Americas (FTAA) contains a variety of measures that would effectively extend patent terms, interfere with compulsory licensing, and otherwise undermine efforts by poor countries to make medicines more accessible.

Generally, the inclusion of intellectual property provisions in multiple trade agreements makes it much harder to ratchet down international patent protection obligations. Even if changes were made so that the WTO TRIPS became less restrictive, for example, this would have little impact on countries that had separate TRIPS or TRIPS-plus obligations in the FTAA or other international trade agreements.

The U.S. is also continuing with challenges to countries' intellectual property laws within the WTO. Arguing that it maintains the right to demand TRIPS compliance, the U.S. has challenged a Brazil law (known as a "local working requirement") that permits local manufacturers to produce products if the patent holder does not produce them locally. Brazil has, by far, the most successful developing country program of delivering AIDS treatment drugs to people with HIV/AIDS. While the U.S. claims its case against Brazil concerns a narrow technical issue and would not inhibit Brazil's ability to continue its program or issue compulsory licenses, the act of bringing the high-profile case has sent the wrong message.

Throughout the world, many countries continue to believe that issuing a compulsory license will invite U.S. sanctions or WTO litigation. The U.S. has also commenced WTO action against Argentina, disputing a number of technical issues that may significantly impact the country's ability to carry out access-to-medicines policies.

The U.S. has also offered an effective bribe to countries not to undertake compulsory licensing: the U.S. Export-Import Bank announced in July 2000 that it would make $500 million in loans available to African countries each year, for the purpose of buying HIV/AIDS medicines. Those loans--which of course would have to be repaid--could only be used to by drugs from U.S. companies, not the far lower-priced drugs available from generic makers in India and other countries.

Key Problems

* The inclusion of intellectual property provisions in multiple trade agreements makes it much harder to ratchet down international patent protection obligations.

* Washington continues to restrict the space available to developing countries to adopt intellectual property policies that could make HIV/AIDS drugs more affordable.

* U.S. government positions on intellectual property questions remain too responsive to corporate profits, not public health needs.