PEPFAR: LOBBYING OUT THE PROMISE

In 2003 President Bush and the congress passed an initiative to curtail and eventually

stop the spread of HIV/AIDs around the world. The President’s Emergency Plan for AIDs Relief,

better known by its acronym PEPFAR, is not only the largest mechanism in the world attempting

to bring relief to people affected by HIV/AIDs, but also the largest offensive in the history of

mankind against a disease. In light of America’s recent decrease in global popularity, PEPFAR is

received by the world as one of the few shining examples of American’s determined compassion,

a lingering shadow of what America once offered to the world. This paper will shed light on

what lurks in the shadows today: the pharmaceutical lobby’s manipulated mutations of US trade

and foreign aid policy and how dangerous the idea of intellectual property as property has

become.

In order to understand what is wrong we need to understand the problems and how the

US is broadly attempting to solve them. Due to the exponentially growing spread of HIV/AIDs

around the world President Bush, the Evangelical community, the Congress, and many other

Americans fought hard to formulate and pass a HIV/AIDs treatment program and appropriate

$15 billion dollars over five years to carry out America’s part in the reaching the newly agreed to

Millennium Development Goals (MDGs).

Basic understanding of several key issues is also necessary. Intellectual property rights in

this frame of reference refers to the rights of a pharmaceutical company to have drug(s), and any

chemical entity it comes up with protected by law from being reproduced for copied for 20 years.

Meaning that the company has sole rights over any newly discovered medication, its distribution,

profits, and data concerning the drug and that US and world law will take action against any

violators. Any country that is bidding to join, or joins the WTO must abide by these rules. Any

generic manufacturer that unlawfully reproduces these drugs, as well as the country that harbors
that company and the country that receives those drugs may have legal action taken against them

by the country and company in which that patent is based. IT may seem strange to TRIPS is

It is US policy to deny the use of generic HIV/AIDs medication in countries that need

them. US trade policy does have routinely blocked trade negotiations in the World Trade

organization (WTO) attempting to create exceptions for life saving drug provision in countries

that cannot afford them.

US trade negotiators blocked a WTO agreement at the second round of Doha talks that

would’ve increased access to generic medicines in poor countries. The US did compromise on

several symbolically significant principles, but intermittently the US added extra measures which

made the symbolic concessions an incomplete and thus completely ineffective solution to the

problem. One concession allowed application for registration of a generic medication during by a

generic manufacturer possible before a patents term of protection ended, but at the same time

precluded registration for marketing until after expiration of the patent and required notification

of the application to the patent holder. Together these two details effectively deny the possibility

of the much smaller generic manufacturer going into production because of the extensive cost,

loss of margins, and mounting legal troubles they will face (Baker 2004).

In recognition of the debate between less than developed countries’ needs for essential

medicines and protection for developed countries’ and large businesses’ investments in

pharmaceutical research all WTO nations came together to compromise between access and

investment protection in the Doha Declaration. Compulsory licensing was created to allow

domestic production and distribution of medication in countries where there was a essential need.

Essential need was loosely defined as having a large percentage of the population afflicted by the

disease and a majority of those individuals being unable to afford treatment. While compulsory

licensing was a good first step towards reaching an all encompassing legal precedence for world
trade issues experiencing similar debates, the compromise failed because of its complicatedness.

The legal mechanisms for integrating compulsory license into national law are so costly and

cumbersome both bureaucratically and legally that attempts at implementation were shown to be

substantially difficult enough as to become a barrier (Mullen 02).

In addition to these complications, the US and the European nations were acting to

undermine any gains that could be made by the declaration by signing bilateral trade agreements.

This was an intentional carve up of the world in times when a holistic approach was known to be

the best method of success. “At the same time… [the US and Europe] were independently

engaging in negotiations to bind several developing countries to even higher levels of protection

of intellectual property rights (IPRs) via bilateral agreements.” What came to be known by critics

as the TRIPS plus agreement effects 23 developing countries with the ability to produce generics

and as an effect up to 150 developing countries in need of affordable essential medication for

anything from AIDs to Tuberculosis (Bagley 2003).

Another important policy block strategically added by the US and European countries

under the influence of Big Pharma dealt with parallel importation. Parallel importation

effectively became illegal as it became legal to subject exporting countries to sanctions within

the WTO for violating TRIPS. This policy directly effects PEPFARs efforts because PEPFAR’s

reliance on a distribution system similar to parallel importation. Parallel importation is when one

WTO member country produces the generic medication themselves and then exports to a country

that lacks the ability to produce the drugs themselves. Previously a country could act under

compulsory licensing to provide affordable medication to a country where those drugs were

unavailable and essential to national health. This loophole was closed, and so PEPFAR could not

purchase generic medication, though the US’s lack of utilization of this loophole previously

suggests it would not have attempted parallel importation in the future. What this change in
WTO trade policy did do, however, was shut down any possible alternative country from

working towards this goal under parallel importation. This means untold foreign national

assistance programs and private based humanitarian programs were deterred (Bagley 2003).

There is significant evidence to support the theory that there is a causal alignment

between Big Pharma and US policy. The first is President Bush’s selection of Randall Tobias,

recently the president and CEO of Eli Lilly, one of the largest pharmaceutical companies in the

US, to head PEPFAR. Keeping in mind that PEPFAR has many more facets to it that are non-

pharmaceutical than are pharmaceutical, this is suggestive to say the least. Perhaps greater

evidence is the no less than coincidental aggressiveness of the US to maintain global trade

policies that favor Big Pharma. A prominent example is when the South African government

attempted to utilize an article of TRIPS and legally allow compulsory licensing of AIDs drugs

and it was not only sued by 42 pharmaceutical companies, but lost its “most favored nation”

trade status with the US and was put under immense pressure on all trade fronts by US trade

representatives (Bagley 2003).

These policies, if continued, have dire consequences for the future of HIV/AIDs victims.
Institute of Medicine of the National Academies. Implementation, Committee For The

Evaluation Of The President's Emergency Plan For Aids Relief (Pepfar). PEPFAR

Implementation: Progress and Promise. Washington, D.C.: National Academies Press,

2007. http://books.nap.edu/openbook.php?record_id=11905&page=R1