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FTAA.soc/civ/108/Add.1
October 24, 2003

Original: Spanish
Translation: FTAA Secretariat
 

FTAA - COMMITTEE OF GOVERNMENT REPRESENTATIVES ON THE PARTICIPATION OF CIVIL SOCIETY

CONTRIBUTION IN RESPONSE TO THE OPEN AND ONGOING INVITATION – EXECUTIVE SUMMARY


Name(s) Intellectual property in the FTAA. Impact on health in Latin America
Organization(s) Alianza de ONG para la Defensa del Derecho a la Salud (Colombia) - Fundación Misión Salud, Acción Internacional para la Salud-A.I.S- Fundación IFARMA [NGO Alliance for the Defense of Health Rights (Colombia)-Health Mission Foundation-International Action for Health -IFARMA Foundation]
Country Colombia

EXECUTIVE SUMMARY
INTELLECTUAL PROPERTY IN THE FTAA:
IMPACT ON HEALTH IN LATIN AMERICA

>Lack of access to medicines is a serious social problem. Over 80% of the medicines produced worldwide are consumed in the rich countries. In the meantime, nearly one third of the world’s population has no access to even essential medicines, and over 30,000 people in the world die each day of curable diseases as a result. Over 90% of these deaths occur in the developing world.

Latin America is no exception, given that over 121 million people in the region have no access to adequate health care. Between 50% and 90% of medicines are, in fact, paid for out of the consumer’s pocket, in contrast to the situation in high-income countries, where two thirds of medicines are provided by the government and social security programs.

>Important studies show that the most effective way to bring down the prices of medicines and improve access to them is to boost competition in the sector. For every competitor that enters the market, prices drop at least 10%. That is why the prices of competing medicines (sold as national and generic brands) are at least one-third or even less of the price of innovative medicines.

>To boost competition in the medicines sector, the implementation of standards-related barriers that prevent the distribution of national products that are of good quality and low in price must not be allowed to continue in international scenarios, such as the FTAA. Of the new barriers contemplated in the FTAA agenda, the following are the most notable:

1. Recognition of second use patents
2. Recognition of “spurious patents”
3. Extension of the term of patents beyond 20 years
4. Protection of health registry data with exclusive rights for no less than 5 years
5. Restrictions on the application of obligatory licenses
6. Restrictions on parallel imports

The establishment of any of these barriers would have the following social and economic effects:

1. Low-price competing medicines blocked;
2. Steep increase in the price of medicines. Estimated increase in Colombia: 61%;
3. Decline in the population’s welfare due to their having to spend a greater proportion of their income on medicine instead of on other necessary items. Calculated loss in Colombia: USD 777 million per annum (almost 1% of the country’s GDP);
4. Inconvenient strategic reorganization of the pharmaceutical sector, with multinationals being ceded the whole production field;
5. Higher unemployment as a result of the national industry losing its market. This loss will not be compensated by jobs in multinational pharmaceutical companies because the number of plants they have in Latin America is declining daily;
6. Loss of export potential as the new barriers decimate national medicine production for export;
7. The sector’s trade balance would be adversely affected as the multinationals replace their portfolio of national products with imported ones;
8. A growing market for fake medicines; and
9. A high fiscal cost.

The humanitarian organization Doctors Without Borders concludes: “If the FTAA creates a system that blocks the use of equivalent but cheaper drugs, it will be a catastrophe for all people in the Americas, because the difference in price can be the difference between life and death.”

>Does it make sense to recover R&D in poor countries to encourage the invention of new molecules? No, because these markets, apart from their being of little significance from a global viewpoint, lack the capacity to pay monopoly-based prices, which dramatically affects the population’s welfare. Also, only 10% of R&D is devoted to third world diseases. According to OXFAM, this constitutes "one of the main causes of poverty and suffering in the world.”

RECOMMENDATIONS:

1. Transfer the chapter on intellectual property rights to the WTO.
2. Otherwise, do not establish norms that could restrict access to medicines even further.
3. Strengthen the negotiating teams of Latin American countries by adopting three measures: a) Include those responsible for social protection in the process; b) Boost the participation of civil society; and c) Exclude the representatives and attorneys of multinationals.

In Latin America medicines should stop being a luxury. Health is not negotiable!

 
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