US Special Section 301
United States: An Obsolete Trade Practice Undermines Access to the Most Expensive Drugs at More Affordable Prices
By Maria Fabiana Jorge
Access to affordable drugs is a top policy priority for the United States with real bipartisan support but it increasingly seems to be an unreachable goal, in part, due to conflicting government policies. While the Administration’s Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs highlighted the importance of competition to ensure lower drug prices, U.S. trade policy in general, and the Special 301 Annual Review in particular, do exactly the opposite: broaden and lengthen the monopolies granted to pharmaceutical companies thus delaying or deterring the launch of generic and biosimilar drugs and with that, the chances of lowering drug prices. The pharmaceutical industry has changed a great deal in the past 30 years, among other things by developing complex biotechnology drugs that while critical for the treatment of illnesses such as cancer, are out of reach for many patients. While some parts of the government are trying to increase access to medicines through competition provided by generic and biosimilar drugs, their efforts are being undermined by a trade policy that was defined 30 years ago. It is time to adjust U.S. trade policy to the realities of 2020 and stop acting as if it was still 1989.
Special Section 301:US Interference with the Design and Implementation of National Patent Laws
By Dr. Carlos M. Correa
The continuous application of Special Section 301 by the Office of the United States Trade Representative (USTR) undermines the rule of law as a fundamental principle of a multilateral system based on the sovereign equality of states and the respect for international law. Interference with foreign countries’ national intellectual property (IP) policies—which have significant socio-economic effects—negates their right to determine independently the level and modalities of protection of such property within the framework and policy space allowed by the international law. This paper examines the patent-related claims made by the USTR in relation to the developing countries on the USTR Priority Watch List. It argues that the regulations and practices identified by the USTR show a legitimate use of the flexibilities provided for by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and that the ignorance of the public interests of the countries concerned (for instance, with regard to access to affordable medicines) has contributed to the discredit (and ineffectiveness) of the Special Section 301.
Inequality is one of the greatest challenges that the world needs to face. Inequality is intimately linked with poverty. Although there has been progress in reducing poverty, a large part of the global population (overwhelmingly living in developing countries) is still denied access to a dignified life. While no poverty and reduced inequality are two of the outstanding Sustainable Development Goals, these and other goals are unlikely to be achieved by 2030. In fact, inequality is on the rise. Changing this situation will certainly require significant efforts at the national and regional level. But it also requires an international architecture that supports those efforts by respecting the policy space that countries need and coordinating constructive actions within the multilateral system. The current initiatives to ‘reform’ this system will only be legitimate if they recognize the gaps in the levels of development and contribute to effectively address them under a fair, pro-development system of rules. Please see last month’s SouthViews on “Understanding global inequality in the 21st century” by Jayati Ghosh, development economist and Professor of Economics at Jawaharlal Nehru University.
Time for a Collective Response to the United States Special 301 Report on Intellectual Property
By Viviana Muñoz-Tellez, Nirmalya Syam and Thamara Romero
This policy brief discusses the annual Special 301 report issued by the Office of the United States Trade Representative (USTR). The report is a unilateral tool of the US to pursue its foreign intellectual property (IP) policy by exerting pressure on countries to reform their IP laws and practices. Developing countries are particularly susceptible to this threat. The report identifies countries that are considered by the US as not providing adequate and effective protection of IP of rights holders from the US. The selection of countries is biased to the concerns raised by segments of the US industry. The report targets balanced provisions in countries’ legislations to ensure that IP rights do not hinder the ability of the government to adopt measures for promoting development priorities, particularly in the area of public health. A uniform and collective international response by the affected countries is long overdue. The way forward is to continue dialogue in appropriate multilateral fora, recognizing the need for all countries to maintain policy space to use IP as a domestic policy tool.
This update provides a snapshot of the publications and social media activities of the South Centre during the month of September 2018.
US Claims under Special Section 301 against China Undermine the Credibility of the WTO
By Nirmalya Syam and Dr. Carlos M. Correa
The US action to place China in the Special 301 ‘Priority Watch List’ is unjustified and in contravention to the WTO rules. The claims made against China are based on standards self-determined by the Office of the United States Trade Representative (USTR), not on international standards. This is an example of a systemic problem that requires a concerted response. WTO members should unite to firmly oppose the imposition of unilateral measures that undermine the multilateral trading system and the credibility of WTO as a ruled-based institution.