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Memoranda/Appeal Letters:


MTAAG+ Memorandum to Human Rights Commission of Malaysia

Online Publication Date: 09 February 2012

Submission to SUHAKAM on the Impact of FTAs on the Right to Health

3 February 2012

Introduction

The Positive Malaysian Treatment Access & Advocacy Group (MTAAG+) is a group of people living with HIV/AIDS (PLHIV) doing HIV/AIDS treatment literacy and advocacy and networking. The Ministry of Health has reported a total number of 91,362 PLHIV in Malaysia.[1] As we represent many Malaysians living with HIV/AIDS, we are very concerned that the life-saving medicines we need may become unaffordable if Malaysia signs the free trade agreements (FTAs) it is currently negotiating with the United States via the Trans Pacific Partnership Agreement (TPPA), and with the European Union.

The price of patented medicines in Malaysia are already high enough to be of concern. For example a 2005 study using WHO methodology found that for a family of three receiving the lowest level of Malaysian civil servant salary, it would take two-months’ salary to pay for one month of patented medicines.[2] Similarly, an article by Azmi and Alavi found that patented medicines can be 1,044% more expensive than their generic equivalents in Malaysia.[3] The Malaysian government is already struggling to provide all the HIV/AIDS medicines required for free.

Since the negotiating texts have not been disclosed, we have been unable to determine the obligations in the TPPA and EU-Malaysia FTA that could affect our right to health, including our access to affordable medicines. However, based on past US free trade agreements (FTAs) we are worried that the TPPA will contain stronger intellectual property and other provisions that will negatively impact our health.

Prior to May 2007,[4] the intellectual property chapters of USFTAs alone contained many obligations which, if imposed on Malaysia, would harm our health. A table listing some of these provisions, their impact on medicine prices and the UN Special Rapporteur on the Right to Health’s recommendation on them is below.

Table 1: TRIPS+ provisions and UN Special Rapporteur’s specific recommendations

USFTA provision

Impact on medicine price

UN Special Rapporteur’s recommendation to developing countries[5]

Join the Patent Cooperation Treaty (PCT)

More medicines will be patented (based on the experience of other countries which joined the PCT[6]). Patented medicines have cost US$15000 per patient per year instead of US$80 per patient per year for generics.[7]

Establish high patentability standards (which would not be possible under current proposals at the PCT)

Requiring patents on new uses of existing medicines

Would cause an 8% increase in medicine prices in Colombia by 2020[8]

Exclude patents on new uses

Prohibiting pre-grant patent oppositions

Likely to mean that more medicines are patented for longer and patented medicines have cost US$15000 per patient per year instead of US$80 per patient per year for generics.[9]

Allow pre (and post) grant opposition

Requiring longer patent terms

Korean National Health Insurance Corporation estimates it will cost US$757 million if it has to agree to a four year extension in its USFTA negotiations.[10]

The extension of patent life in developing countries can significantly impact the ability of patients to access medicines, and may pose a burden for national health budgets

Limiting the grounds on which compulsory licences could be issued

World Bank estimated that if Thailand uses compulsory licensing to reduce the cost of second-line antiretroviral therapy to treat people living with HIV/AIDS by 90%, the government would reduce its future budgetary obligations by US$3.2 billion discounted to 2025.[11]

Allow all possible grounds for compulsory licences

Prohibiting parallel importation

Depends on the price at which it is available elsewhere

Allow parallel importation

Requiring data exclusivity (DE)

·The prices of medicines which received data exclusivity in Guatemala are much more expensive than non-protected drugs in the same therapeutic class. For example, the insulin Lantus costs 846% more than non-data protected isophane insulin.[12]

·8 years of data exclusivity alone in Canada would have added $600 million to prescription medicine costs alone in the last five years.[13]

·DE would require Colombia to spend an additional US$675million per year by 2020 and US$989million per year by 2030.[14] If this is not spent, Colombians will have to reduce their medicine consumption by 30% by 2020.[15]

DE raises ethical concerns of replicating trials on human populations and it deters and considerably delays the entry of generic medicines and can lead to the maintenance of high prices of medicines

Linkage of medicine registration to patent status

Linkage would require increased spending by Colombia of US$53million per year by 2030.[16]

Developed countries should not encourage developing countries to enter into TRIPS-plus FTAs. (And the WHO recommends avoiding linkage).[17]

Additional studies on the impact of TRIPS+ provisions on medicine prices

The World Health Organization (WHO) has an economic model of the impact of provisions which provide stronger intellectual property protection than the World Trade Organization’s Agreement on Trade-Related aspects of Intellectual Property Rights (TRIPS) requires (known as ‘TRIPS+’) on medicine consumption. The model predicts that the full impact of medicine price rises will not be felt until about 15 years after the USFTA begins because the stronger IP protection only applies to each new medicine after the FTA starts so it will not affect all medicines in a country and the overall medicine price until about 15 years has passed.

When the WHO model was applied to Colombia, it found that the effect of most of these TRIPS-plus provisions (prior to May 2007) is that Colombia would require an extra US$1.5billion to be spent on medicines every year by 2030.[18] If this were not spent, Colombians will have to reduce their medicine consumption by 44% by 2030.[19]

A study of the impact thus far of the TRIPS-plus provisions of the Jordan-USFTA found that: one hospital alone has increased its medicine spending six-fold, medicine prices in Jordan have already increased 20% since 2001 when the FTA began, over 25% of the Ministry of Health’s budget is now spent on buying medicines, data exclusivity has delayed the introduction of cheaper generic versions of 79% of medicines launched by 21 multinational companies between 2002 and mid-2006 and ultimately the higher medicine prices are threatening the financial sustainability of government public health programs.[20] However, other countries could expect worse outcomes because recent USFTAs can have twice as many provisions that are likely to delay the introduction of cheaper generic versions of medicines as the Jordanian one and the Jordan-USFTA has not yet been in force for the approximately 15 years the WHO’s model predicts it will take for the full effects to be felt of these provisions on medicine prices.

We were very encouraged when the Malaysian Government issued a compulsory license in 2003 to import some generic antiretrovirals (ARVs) to treat HIV/AIDS from India for use by the Ministry of Health (MOH). The average monthly treatment cost by government hospitals and clinics fell by 81% from US$315 to US$58 and more than doubled the number of patients who could be treated.[21] The MOH has achieved 9,962 people to be on ARV therapy. But this is still below the targeted 26,700 patients that needed urgent treatment with new WHO treatment guideline with CD4 350 and below.

The Thai Government (amongst others) recently issued compulsory licences for three types of medicines and estimates that it could save it up to US$24million each year.[22] However a number of provisions in a TPPA could prevent the use of compulsory licences, including data exclusivity and linkage.

Human rights obligations

According to the UN Special Rapporteur,[23] access to medicines forms an indispensable part of the right to health and States have an obligation under the right to health to ensure that medicines are available and financially affordable. Developed States also have a responsibility to take steps towards the full realization of the right to health through international assistance and cooperation.Moreover, all States parties to the International Covenant on Economic, Social and Cultural Rights have a legal obligation not to interfere with the rights conferred under the Universal Declaration of Human Rights and the Covenant, including the right to health.

The UN Special Rapporteurs on the Right to Health have repeatedly expressed concerns about these provisions. For example, Anand Grover said that ‘TRIPS and FTAs have had an adverse impact on prices and availability of medicines, making it difficult for countries to comply with their obligations to respect, protect, and fulfil the right to health’. [24]

His predecessor, Paul Hunt, said he was ‘deeply concerned that the US-Peru trade agreement will water-down internationally agreed health safeguards, leading to higher prices for essential drugs that millions of Peruvians will find unaffordable’. He stated that ‘The US-Peru trade agreement must not restrict Peru's ability to use the public health safeguards enshrined in TRIPS and the Doha Declaration . . . Both the US and Peru must honour these binding obligations during their negotiations. If the final agreement has the effect of restricting access to essential drugs it will be inconsistent with Peru's national and international human rights obligations’. Mr Hunt concluded that ‘in accordance with its human rights responsibility of international cooperation, the US must not apply any pressure on Peru to enter into commitments that are either ‘TRIPS-plus’ or inconsistent with Peru's constitutional and international human rights obligations’.[25]

Many others have expressed their concerns about the way the intellectual property provisions found in USFTAs make medicines more expensive, including the World Health Assembly,[26] the WHO’s Commission on Intellectual Property Rights, Innovation and Public Health,[27] Ministers of Health from ten Latin American countries,[28] the Ministers of Health[29] of the African Union, the African Union’s Ministers of Trade[30], the UK Government’s Commission on Intellectual Property Rights[31] and Nobel Peace Prize winning Doctors Without Borders[32].

As a Party to the Convention the Rights of the Child (CRC), Malaysia is bound by Article 24 of the Convention which sets out the right of the child to the highest attainable standard of health and includes an obligation on the Malaysian Government to ensure the provision of health care to all children[33]. Furthermore, according to the Committee on the Rights of the Child, States Parties have an obligation to provide antiretroviral medicines to HIV+ mothers and children.[34] Malaysia currently provides free antiretroviral therapy to HIV+ pregnant women and HIV+ children.[35] However the sustainability of this assistance is already proving difficult and the permanently lower government revenue as tariffs are reduced under the TPPA[36] and TRIPS+ provisions are likely to further threaten Malaysia’s ability to fulfill this human rights obligation.

The Committee on the Rights of the Child has already asked pointed questions as to how Malaysia will ensure that FTAs do not affect the provision of generic medicines, especially for HIV/AIDS.[37] The Committee has expressed concern over the way in which TRIPS+ provisions in other USFTAs may harm access to affordable medicines and has repeatedly urged countries negotiating such agreements to ensure they do not negatively affect the right of children to access affordable medicines.[38]

The United States has reaffirmed its support for the full use of TRIPS flexibilities in the 2010 United Nations General Assembly resolution on the Millennium Development Goals.[39] (In 2006 the General Assembly’s resolution on HIV/AIDS also reaffirmed the right to use all the safeguards in TRIPS and assist developing countries to use these flexibilities).[40]

We were encouraged to read that ‘President-elect Barack Obama and Vice President-elect Joe Biden believe that people in developing countries living with HIV/AIDS should have access to safe, affordable generic drugs to treat HIV/AIDS. They will break the stranglehold that a few big drug and insurance companies have on these life-saving drugs. They support the rights of sovereign nations to access quality-assured, low-cost generic medication to meet their pressing public health needs under the WTO’s Declaration on Trade Related Aspects of Intellectual Property Rights (TRIPS).’ We look forward to seeing this implemented by President Obama ensuring that any TPPA only has TRIPS-level of intellectual property protection.

The European Union (EU) is also likely to ask Malaysia for similar TRIPS+ provisions. However the EU has given other developing countries (with gross national incomes/capita which are higher than Malaysia’s according to the World Bank) free trade agreements (FTAs) with no intellectual property (IP) chapter at all, ie no TRIPS+ provisions. We therefore do not see why Malaysia should agree to an IP chapter in any EUFTA at all.

No generic medicines means no access to affordable life-saving AIDS drugs. This will translate to more deaths for PLHIV. In Malaysia, figures in December 2010 show that there are 91,362 reported cases of HIV infection, and 16,352 AIDS cases in Malaysia. We have already lost 12,943 lives.

For PLHIV, the treatment that we need is lifelong treatment. For us, it is a matter of life and death. As such:

·We strongly appeal to SUHAKAM to safeguard our human rights to life, health, affordable medicines and treatment.

·We urge SUHAKAM to conduct a human rights impact assessment of the FTAs, including on the right to health.

·We call on SUHAKAM to also take this matter up with the government and to ensure that the latter does not include in any FTA an intellectual property chapter or any TRIPS+ or other provisions that will harm the health of Malaysians.

Without ARVs, more PLHIV will die.

Edward Low,
President,
Positive Malaysian Treatment Access & Advocacy Group (MTAAG+)


[1] http://www.unaids.org/en/CountryResponses/Countries/malaysia.asp

[2] Members of the hypothetical family suffered depression, peptic ulcers, a viral infection and asthma. ‘A Survey of Medicine Prices, Availability, Affordability and Price Components in Malaysia using the WHO/HAI methodology: Research Report’, Babar, Ibrahim, Singh, Bukhari, University College Sedaya Interntional and Universiti Sains Malaysia in collaboration with the World Health Organization and Health Action International, Malaysia, October 2005.

[3] ‘TRIPS, Patents, Technology Transfer, Foreign Direct Investment and the Pharmaceutical Industry in Malaysia’, Ida Madieha Azmi and Rokiah Alavi, Journal of World Intellectual Property, Vol 4 No. 6, November 2001.

[4]While the USFTAs after May 2007 have had fewer TRIPS+ provisions, they still contain many obligations that we believe would undermine our right to health.

[5] A/HRC/11/12

[6] http://www.wipo.int/ipstats/en/

[7] Untangling the web of price reductions: a pricing guide for the purchase of ARVs for developing countries, 10th Edition, July 2006, Médecins Sans Frontières and http://www.msf.org/msfinternational/invoke.cfm?objectid=63C0C1F1-E018-0C72-093AB3D906C4C469&component=toolkit.article&method=full_html.

[8] Intellectual Property In The FTA: Impacts On Pharmaceutical Spending And Access To Medicines In Colombia, Miguel Ernesto Cortes Gamba, Mision Salud, Fundacion Ifarma, Bogota 2006

[9] Untangling the web of price reductions: a pricing guide for the purchase of ARVs for developing countries, 10th Edition, July 2006, Médecins Sans Frontières and http://www.msf.org/msfinternational/invoke.cfm?objectid=63C0C1F1-E018-0C72-093AB3D906C4C469&component=toolkit.article&method=full_html.

[10] http://english.hani.co.kr/arti/english_edition/e_business/165065.html

[11] p169, ‘The Economics of Effective AIDS Treatment’, Conference Edition, World Bank, Washington, 2006.

[12]A Trade Agreement’s Impact On Access To Generic Drugs’, Ellen R. Shaffer and Joseph E. Brenner, Health Affairs 28, no. 5 (2009): w957–w968 (published online 25 August 2009

[13] http://www.canadiangenerics.ca/en/news/nov_14_06.shtml

[14] Intellectual Property In The FTA: Impacts On Pharmaceutical Spending And Access To Medicines In Colombia, Miguel Ernesto Cortes Gamba, Mision Salud, Fundacion Ifarma, Bogota 2006

[15] Intellectual Property In The FTA: Impacts On Pharmaceutical Spending And Access To Medicines In Colombia, Miguel Ernesto Cortes Gamba, Mision Salud, Fundacion Ifarma, Bogota 2006

[16] Intellectual Property In The FTA: Impacts On Pharmaceutical Spending And Access To Medicines In Colombia, Miguel Ernesto Cortes Gamba, Mision Salud, Fundacion Ifarma, Bogota 2006

[17]www.wpro.who.int/NR/.../BriefingNote2DataexclusivityMarch2006.doc

[18] ‘Intellectual property in the FTA: impacts on pharmaceutical spending and access to medicines in Colombia’, Mision Salud and Fundacion IFARMA, Miguel Ernesto Cortes Gamba, Bogota, 2006 available from http://www.ftamalaysia.org/article.php?aid=153.

[19] ‘Intellectual property in the FTA: impacts on pharmaceutical spending and access to medicines in Colombia’, Mision Salud and Fundacion IFARMA, Miguel Ernesto Cortes Gamba, Bogota, 2006 available from http://www.ftamalaysia.org/article.php?aid=153.

[20] http://www.oxfam.org/en/files/bp102_jordan_us_fta.pdf/download

[21] ‘Malaysia’s experience in increasing access to antiretroviral drugs: exercising the ‘government use’ option’, Chee Yoke Ling, Intellectual Property Rights Series No. 9, Third World Network, 2006. Earlier version available from http://www.twnside.org.sg/title2/FTAs/Intellectual_Property/IP_and_Access_to_Medicines/Malaysia'sExperienceInIncreasingAccessToAntiretroviralDrugs-CheeYokeLing%5BOct05%5D.docs

[22]http://www.bangkokpost.net/breaking_news/breakingnews.php?id=116803

[23] A/HRC/11/12

[24] A/HRC/11/12

[25] http://www.unhchr.ch/huricane/huricane.nsf/0/35C240E546171AC1C1256EC800308A37?opendocument

[27] ‘Public health, Innovation and Intellectual Property Rights’, World Health Organization, April 2006. For example recommendation 4.21.

[28] Declaration of Ministers of South America over Intellectual Property, Access to Medicines and Public Health, Geneva, 23 May 2006. The Ministers of Health were from Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay and Venezuela, http://lists.essential.org/pipermail/ip-health/2006-May/009594.html.

[29] Gaborone Declaration, 2nd Ordinary Session of the Conference of African Ministers of Health, Gaborone, Botswana, 10-14 October 2005, CAMH/Decl.1(II), http://lists.essential.org/pipermail/ip-health/2005-October/008440.html.

[30] AU’s Ministerial Declaration on EPA Negotiations, AU Conference of Ministers of Trade, 3rd Ordinary Session, 5-9 June 2005, Cairo, Egypt, AU/TI/MIN//DECL.(III), www.twnside.org.sg/title2/FTAs/General/AFRICAN_UNION.Cairo_Decl.doc.

[31] ‘Integrating Intellectual Property Rights and Development Policy: Report of the Commission on Intellectual Property Rights’, Commission on Intellectual Property Rights, London, 2002. For example, pages 39, 49, 113.

[32] ‘Access to Medicines at Risk Across the Globe’, Briefing Note, MSF Campaign for Access to Essential Medicines, May 2004, www.accessmed-msf.org/documents/ftabriefingenglish.pdf.

[33] Article 24.2(b) CRC.

[34] General Comment No.3 (2003), United Nations Committee on the Rights of the Child.

[35] Malaysian Government Report to the Committee, Document CRC/C/MYS/1, 22 December 2006.

[36]http://www.imf.org/external/pubs/ft/wp/2005/wp05112.pdf.

[37] http://www.3dthree.org/pdf_3D/3Dnote6_Malaysia2007.pdf

[38]See for example http://www.crin.org/resources/infoDetail.asp?ID=5749 and www.3dthree.org/pdf_3D/TreatyBodyIPrefs_en.pdf

[39] http://daccess-dds-ny.un.org/doc/UNDOC/GEN/N10/512/60/PDF/N1051260.pdf?OpenElement

[40] A/RES/60/262




 

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