Generic Drugs Seen Limited in WikiLeaks Trade Document

Access to cheaper drugs in other countries may be limited by a provision sought by the U.S. in a Pacific trade deal, according to patent specialists who reviewed a document exposed by the WikiLeaks anti-secrecy group.

The proposal would boost patent protections for brand-name medicines in some participating countries and curtail access to low-cost generic drugs, the specialists said after reading a 94-page document WikiLeaks said is a draft of the intellectual-property chapter of the Trans-Pacific Partnership being negotiated by 12 nations, including the U.S. and Japan.

Patent safeguards give pharmaceutical makers such as Pfizer Inc. (PFE) and Merck & Co. (MRK) the right to block competition from generic drugs for a set period to protect their research investments. U.S. negotiators are trying to balance preserving those barriers against the desire to make drugs more affordable and accessible in developing countries.

“Pharmaceutical companies are extremely important for job creation in the United States but we also have more important issues sometimes,” Robert Stoll, a former commissioner of the U.S. Patent and Trademark Office, said in an interview. “This is something that needs to be more transparent.”

European Union

The trade agreement, covering an area with $28 trillion in economic output, would be the largest accord in U.S. history, though it may be eclipsed by a separate pact that President Barack Obama’s administration is negotiating with the European Union. Other nations drafting the partnership are Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The document also shows U.S. positions favoring a broad definition of copyright infringement and more liability for Internet-service providers to police the Web for such violations, according to Susan Sell, a professor of political science and international affairs at George Washington University. These measures have been controversial when debated by lawmakers, she said.

“It’s a way to end-run Congress,” Sell said in a phone interview. “It’s going to really undermine trust in the administration” and may derail efforts to give the president fast-track approval to negotiate trade deals, she said.

Patent Guidelines

U.S. Trade Representative Michael Froman has said negotiators are seeking a deal by year’s end. “We’re now in the endgame,” he said yesterday at a conference in Washington.

The document released on the WikiLeaks.org website seeks to set guidelines for protection of patents, copyrights and trademarks on consumer products, drugs, music and software.

“This document does seem to be proposing broader, stronger patent rights,” Christian Mammen, a lawyer with Hogan Lovells in San Francisco, said in an interview. “It looks like the U.S. is a proponent of much of that. It’s going to provoke a lot of discussion.”

Froman’s office declined to confirm the authenticity of the document, saying it doesn’t do so for items said to be leaked from continuing trade talks, agency spokesman Carol Guthrie said yesterday by e-mail.

“The intellectual property negotiation in the Trans-Pacific Partnership discussions has not been completed and a final text has not been agreed to,” she said, citing a need for balanced copyright protections and access to medicines.

1984 Law

Provisions in the document, dated Aug. 30, mimic a 1984 U.S. law known as Hatch-Waxman that gives makers of branded drugs exclusive rights to their new medicines for a set period. It also creates incentives for generic-drug makers to challenge the patents on the treatments.

Such a proposal could result in a delay in access to low-cost medicines in countries that don’t have strong patent protections in place or that need drugs quickly on humanitarian grounds, said Stoll, now a lawyer with Drinker Biddle & Reath LLP in Washington.

Pharmaceutical companies would get marketing exclusivity for their new medicines and could delay the entry of generics during patent disputes. Generic-drug makers could piggy-back on safety tests conducted by the producers of the branded treatments without fear of infringement claims and would be rewarded for successful patent challenges, according to the WikiLeaks document.

The 1984 law is widely credited with helping to create the generic-drug industry in the U.S., while at the same time ensuring that drugmakers can profit from their research.

World ‘Envy’

The proposal in the WikiLeaks document “ought to at least contribute to making branded companies with patent rights more comfortable with investing in foreign locales,” said Jon Singer, a patent lawyer with Fish & Richardson P.C. in Minneapolis who often represents drugmakers.

“The U.S. pharmaceutical industry is the envy of the world and part of the reason for that is the Hatch-Waxman framework,” he said by telephone.

Mark Grayson, a spokesman for the Pharmaceutical Research and Manufacturers of America, a Washington-based industry group for drugmakers, said the organization didn’t have a comment on what WikiLeaks presented.

The document shows where each of the nations stand on particular issues related to intellectual property, with the U.S. -- which accounts for about 60 percent of the output of the 12 nations -- at times in the minority.

‘Limit’ Freedom

Protecting the patents of drugmakers including AbbVie Inc., (ABBV) which was spun off from Abbott Laboratories (ABT) in January, and GlaxoSmithKline Plc (GSK) as part of the accord has drawn criticism from groups such as Doctors Without Borders and advocates of providing cheaper drugs to treat HIV and AIDS.

The document shows that the agreement would “trample over individual rights,” according to a statement released yesterday by Melbourne, Australia-based WikiLeaks.

“One of the things you really see from this is how isolated the U.S. is,” Peter Maybarduk, director of Public Citizen’s Global Access to Medicines program, said in an interview.

The Washington-based consumer-activist group, which was a partner to WikiLeaks in the document’s release, said in a statement yesterday that the U.S. is “demanding terms that would limit Internet freedom and access to life-saving medicines throughout the Asia-Pacific region.”

‘Positive Change’

While critical of U.S. proposals in the document, Public Citizen cited a few examples from the text in which the U.S. softened its stance to benefit consumers, including dropping protections for new versions of existing products. “This is a positive change,” the group said in a separate statement.

The posting of the document prompted a call on Capitol Hill for more transparency in the partnership talks.

“This chapter of the trade deal will have broad implications on the Internet economy, innovation and public health and should be considered as transparently and deliberately as possible,” Tom Caiazza, a spokesman for Senator Ron Wyden, an Oregon Democrat, said by e-mail.

To contact the reporters on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net; Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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