At UVM  College Of Medicine Commencement:

Leahy Unveils Bill
To Foster Low-Cost Drugs
For World’s Poorest

BURLINGTON, Vt. (Sunday, May 21 – Embargoed Until 2:30 p.m.) – Sen. Patrick Leahy (D-Vt.) announced Sunday he will introduce legislation this week to foster production of low-cost versions of life-saving medicines for millions in the poorest nations who now cannot afford them.

In his commencement address at the UVM College of Medicine, Leahy said his Life-Saving Medicines Export Act, which he will introduce in the Senate on Thursday, would allow U.S. generic drug firms to manufacture low-cost generic versions of patented medicines for export to nations in need when a voluntary agreement between the generic and the brand-name U.S. company cannot be negotiated.  Those patent holders would get royalty payments, and the generic firms would then be required to sell those less-expensive drugs only to the poorest countries.

“Today 15 percent of the world’s people consume 91 percent of the world’s pharmaceuticals,” Leahy told the UVM medical graduates.  “The high price of many life-saving medicines – medicines that we take for granted – is beyond reach for millions of the world’s most vulnerable populations.  Imagine if you, or a loved one, were dying and you knew the medicine to cure the disease exists and costs only a few dollars, but you have no way to get it or to pay for it.  That is a reality for millions of people today.”

“The need for these medicines is clear and present, but the market to provide them is not,” said Leahy.  “The incentives in this bill would help change that.”

Leahy’s bill would amend U.S. patent law to allow implementation of the low-cost drug provisions of a 148-nation agreement completed last year.  The Bush Administration itself has not proposed any implementing legislation, even though former U.S. Trade Ambassador Rob Portman called the agreement “a landmark achievement that we hope will help developing countries devastated by HIV/AIDS and other public heath crises,” and his office said this approach will “allow countries to override patent rights when necessary to export life-saving drugs.”  Leahy is the Democratic leader of the Senate Judiciary Committee, which oversees patent laws.

The bill addresses the extremely low rate of treatment of a wide variety of diseases for which there are pharmaceutical cures and treatments.  Leahy said infectious and parasitic diseases remain the major killers of children in the developing world and communicable diseases still account for seven out of the top ten causes of childhood deaths.  Thirty-five percent of Africa’s children are at higher risk of death today than they were 10 years ago.  Reports by UNICEF, UNAIDS, WHO and Doctors Without Borders clearly show that the high prices of many life-saving medicines and diagnostics are a significant barrier to their availability in the poorest areas of the world.  

Leading causes of death in the developing world’s children include perinatal conditions; lower respiratory infections; diarrhea diseases; malaria; measles; congenital anomalies; HIV/AIDS; pertussis; tetanus; and protein-energy malnutrition.  Only about 12 percent of HIV-positive people worldwide have daily antiretroviral drugs available to them, Leahy said.

Leahy has worked for months with a wide range of foundations, humanitarian organizations, religious groups, generic drugmakers and others in developing the bill.

The Vermont senator said he is hopeful about the prospects of his bill eventually becoming law.  “The fact that deadly diseases today are just a plane ride away -- and the emergence of new threats like Avian Flu – have finally convinced us that global health is also an issue of national security.”

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Section-By-Section Summary
Of The Life-Saving Medicines Export Act of 2006
Chief Sponsor: Senator Patrick Leahy (D-Vt.)

Section 1 (Short Title): Sets forth the name of the Act as the “Life-Saving Medicines Export Act of 2006.”

Section 2 (Purposes and Congressional Findings):   Section 2 states that the purpose of the Act is to promote public health under World Trade Organization agreements by permitting the export of generic versions of life-saving patented pharmaceutical products and other medicines (including diagnostic tools and vaccines) needed to prevent or treat potentially life threatening diseases to residents of impoverished countries with insufficient or no manufacturing capacity to make the medicines.  The findings set forth determinations by the World Health Organization concerning the millions of low-income persons without regular access to medicines in lesser-developed or developing nations.

Section 3  (Exportation of Generic Medicines for Public Health Purposes):  This section requires the Director of the United States Patent and Trademark Office to issue a compulsory license (permission to make and sell a patented product under this new Act) to permit generic companies to make and export medicines under the terms of WTO international agreements under several conditions.

The recipient country must be a least-developed nation (as defined by the United Nations) or a developing nation without the ability to manufacture the medicine in question.

The recipient country (called an “eligible country” in the bill) must notify the WTO of its interest in participating in this program.

Efforts must have been made by the generic company to buy the right to make and sell the medicine under normal business arrangements with the patent holders.

The medical product exported under this Act can only be used in least-developed or developing nations (and is not for re-export except in identified circumstances relating to regional trade alliances).

Special labeling and packaging must be used to make clear that the product is sold under the authority of the WTO agreement only for use as allowed under agreement and this bill.

The permission to make and sell the product (the license) can not exceed seven years, except that the license may be extended once.

The holder of the compulsory license shall pay a royalty to the patent holder, as determined by the Director of the PTO within a limited range of possible rates set forth in the bill, taking into account such factors as humanitarian needs, the economic value to the importing nation, and the need for low-cost pharmaceutical products by persons in the importing nation.

The maximum royalty for any shipment shall not exceed 4 percent times the commercial value of the pharmaceutical products to be exported under this Act under that supply agreement. 

An alternative royalty payment approach, modeled after the approach enacted into law by Canada, would also be permitted with the same 4 percent maximum.  In addition, the Director may accept combined applications from multiple eligible countries.  Note that in emergency situations the Director may waive provisions of the bill in a manner consistent with the WTO agreements. 

Section 4 (Not a patent infringement):  This section makes clear that compulsory licenses issued under this Act shall not be considered an infringement of a patent.

Section 5 (National Advisory Board on Implementation of the General Council Decision):  This section creates a diverse advisory board (of academic, patent, trade, medical, international aid, and industry experts) to advise the Director, and to report to the Congress, on ways to improve implementation of the bill to achieve its purposes.  Mandatory funding for the board is provided out of the general fund of the U.S. at $1.5 million in fiscal years 2007 and 2008, with declining amounts provided in subsequent years through 2011.

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