Senator Hatch Says Global Fund Advocating For Generic Drugs To Solve Healthcare Crises Is Abusing Funds

from the also-he's-lying dept

We’ve written a few times about governments around the globe seeking to make use of lower-priced (and often more widely available) generic medicines for responding to serious diseases, rather than sticking with the more expensive name brand. Current international agreements, like TRIPs, allow countries to effectively “opt-out” of promises to respect other country’s patent laws for the sake of supplying such medicine and, you know, saving lives. It’s pretty clear that breaking the patent on these drugs is quite effective, driving costs down on a massive scale, making this part of healthcare much more cost-effective.

Of course, the pharma companies don’t like this at all. So it should hardly be that big of a surprise that Senator Orrin Hatch directly tried to put pressure on Hillary Clinton and the Obama administration to stop efforts to promote more widespread use of generics in the developing world using these methods. The link above highlights that Hatch sent then Secretary of State Hillary Clinton a letter that suggested he’s quite upset that the US-funded “Global Fund to Fight AIDS, Tuberculosis and Malaria” was training people in different countries to explore compulsory licenses of drugs or other ways to make use of generics.

Of course, if you just read Hatch’s letter (embedded below), you’d be forgiven for being confused. In it, he claims to be outraged that the Global Fund is encouraging various countries to buy more expensive generics of “cheaper” brand name drugs. Huh? In what environment do generic drugs cost more than the brand name? Also, he appears to just be wrong. Part of the data that he based his complaint on comes from a presentation (embedded with the letter) from the Global Fund, in which they have a few graphs showing that (as you would expect if you were anyone but Orrin Hatch) the generic versions are, in fact, cheaper, which is obviously why they were recommending making use of the option.

So, even as Hatch’s letter is full of bluster about misspending money, the details actually seem to suggest that they saved money.

In the letter, Hatch also claims that the presentation directly calls on countries to “disregard” the TRIPS Agreement. But, again, the attached presentation appears to tell the opposite story, with a specific call to seek solutions that comply with TRIPs.

Recipients must procure their products in accordance with national and international laws. The Global Fund encourages recipients to apply the flexibilities provided within national laws and in the World Trade Organization’s Agreement on Trade-related Aspects of Intellectual Property rights (TRIPS)…

In other words, directly contrasting Hatch’s claims, the Global Fund appeared to tell countries to comply with TRIPs, but (correctly) noted that there were some exceptions built within the law that allowed them to seek compulsory licensing and the use of much cheaper generics. Still, there may have been some behind-the-scenes maneuvering as well. As the IP-Watch report notes, soon after all of this, the executive director of the Global Fund, Michel Kazatchkine, resigned. The report suggests this was due to US pressure over Global Fund’s daring effort to tell developing countries what their international agreements actually allow. Also: the replacement, Mark Dybul, is a US official, likely to make sure that the Global Fund works in the same manner as Hatch would like — artificially keeping the big drug makers happily without competition and with artificially high profits, even as healthcare in the developing world might suffer.

Incredibly, Hatch actually seems to be arguing that by suggesting developing countries explore generics, it’s putting people at risk because… well, there’s a gap in the explanation, but it appears to be due to big pharma companies feeling they need such subsidies to make the drugs in the first place. From the letter:

By advocating for developing countries to disregard the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) through issuing compulsory licenses to gain access to Global Fund grants, we are abusing the system. Access to these products is vital to our success in fighting the war on HIV/AIDS and actions inconsistent with patent law such as these will only hinder our ability to work in partnership with the companies that have provided the intellectual property rights to develop generic versions of their products.

Got it? If you’re a developing nation seeking to stem the AIDS epidemic by making AIDS drugs actually available to those with the disease, you are are actually decreasing the success of the war on AIDS because [something, something, something] big pharma will take their ball and go home. Of course, there’s no actual evidence to support this, and tons of evidence that shows that developing countries who actually set a compulsory license on drugs related to critical diseases, actually do help deal with serious problems. There is no evidence that this suddenly scares companies into not making the drugs at all. They still make plenty of money in the developed world off of those drugs.

Just to summarize, though, an actual US Senator, Orrin Hatch argued that, by having the Global Fund advocate for better, cheaper generic medicines, as clearly allowed under international agreements, that the Global Fund is somehow paying more for medicines (they’re not) and convincing big pharma to fail in the war against these diseases (they’re not). It’s no secret that politicians aren’t always in sync with the truth, but this is significantly more blatant a misrepresentation than is normal.

Filed Under: , , , , , , , ,

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Senator Hatch Says Global Fund Advocating For Generic Drugs To Solve Healthcare Crises Is Abusing Funds”

Subscribe: RSS Leave a comment
34 Comments
Anonymous Coward says:

Re: Re:

USTR is encouraging US copyright restrictions, WITHOUT US copyright exemptions. That is why it is a problem. US copyright law is not as bad as its rep., but remove the exemptions and we are talking a completely different animal.

This article is about patent law where US law is very open (The structures for granting it is screwed up so much that not even politicians can ignore it!). What Hatch seems to completely ignore was the amendment to TRIPS from the DOHA rounds where national epidemics of a treatment demanding ailment is making granting broad exeptions to patents an option.

That One Guy (profile) says:

Ah, gotta love it when people present ‘evidence’ for their argument that directly contradicts what they are trying to say.

I can only assume he either:
A) Read the report he attached but didn’t move on to the second step, that being ‘comprehend’, and instead moved straight on to ‘comment’.
or
B) Didn’t read the report at all, due to someone else telling him (incorrectly) that it presented evidence to back up the claims he’d be making.

Anonymous Coward says:

“They still make plenty of money in the developed world off of those drugs.”

That should read “The US”, since the rest of the developed world has socialized health care that dictates the (much lower ) price they will pay for medicine. If not for the lucrative US market we either wouldn’t have most of these drugs or we’d have to publicly fund their development.

anonymouse says:

Re: No

You would still have those drugs and probably a lot more drugs that actually solve medical problems if you had a healthcare system like the rest of the world, i do not see any country with socialized healthcare not having developments in drugs and medical procedures, in fact the UK which has a socialized healthcare system has some of the brightest doctors working for them, and some of the biggest breakthroughs in medication. Yes it could be better but so could the American system.

I think back to the first heart transplant and although many will be under the impression that the almighty American healthcare system with all its money and profit for advancement was the ones who did it first, it was not, it was South Africa , during the time they were suffering from sanctions during the apartheid years. And that was done under the socialised healthcare system there.

All that this is about is corruption of the politicians who realsie the laws they have passed for their friends in the pharmaceutical industry have just come back to bite them, as will patent laws in the future when the East starts demanding payment for their patents en mass.

Anonymous Coward says:

Re: Re:

Wow, talk about idiocy.

the vast majority of known drugs today were invented by either government agencies or by universities, which pharmaceutical companies at most tweaked before putting it on the market. There’s a reason why pharmacists use generics over branded where possible, and it’s not because the generics are inferior.

Josef Anvil (profile) says:

Re: It's no secret that politicians aren't always in sync with the truth, but this is significantly more blatant a misrepresentation than is normal.

“By advocating for developing countries to disregard the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) through issuing compulsory licenses to gain access to Global Fund grants, we are abusing the system.”
– Sen. Orrin Hatch

It’s abuse because that is not using the system how it was intended and its just plain wrong.

Now ask the good senator how he feels about tax loopholes for the wealthy and see if he responds the same.

Mr. Applegate says:

Re: Re: It's no secret that politicians aren't always in sync with the truth, but this is significantly more blatant a misrepresentation than is normal.

“It’s abuse because that is not using the system how it was intended and its just plain wrong.

Now ask the good senator how he feels about tax loopholes for the wealthy and see if he responds the same.”

What audience is he speaking to?

If he is speaking to the ubber rich: “Here have another loop hole and pass me the check”

If he is speaking to the people he is supposed to serve: “You know I am going to try to do something about these loopholes, they aren’t being abused as much;…. I mean used as we intended.”

Mr. Applegate says:

Re: Re: Re:

Yes, 36 years in office. Want to know how he won office? He used the following:

“In 1976 in his first run for public office (which was the US Senate), Orrin Hatch was elected to the United States Senate, defeating Democrat Frank Moss, a three-term incumbent. Among other issues, Hatch criticized Moss’s 18-year tenure in the Senate, saying “What do you call a Senator who?s served in office for 18 years? You call him home.””

Never mind that he has served twice that term, and like Lugar has lost all touch with reality. Which is inevitable in politics, which is why I believe there should be term limits on all federal offices.

Anonymous Coward says:

Did you even bother...

Before you wrote this article, did you even bother comprehending the data from page 5?

You have Abbott labs, a large pharma company. Then you have Cipla Ltd and Hetero Drugs Ltd. as the two generic manufacturers. In only 1 case is the generic cheaper per unit than the brand name. So why is the Global Fund paying out for “cheaper generics” when the unit price is the same? Where is the benefit to supporting a generic manufacturer when the unit price is the same? If you had to choose between giving $1 to someone that could actually create a new and improved medicine or give $1 to someone that just makes a copy… which would you choose?

What’s the point of supplying compulsory licenses when the generic companies sell for the same unit price?

Mark says:

Re: Did you even bother...

What was the price of the drug in question before the generic was available? Did Abbot labs drop the price of the brand name drug before or after the generic was available?

If it was after the generic was available, then it’s possible that it was agreed that X amount of the generic offered by Cipla be purchased at such a price. At this point, Abbot could drop their price lower than Cipla and say hey, the brand name is cheaper, but there is already a sales contract locked in. Of course, in this case, after the contract is complete, the drug could be purchased through Abbot at the cheaper price thus reducing the costs even more.

John Fenderson (profile) says:

Re: Re: Did you even bother...

Did Abbot labs drop the price of the brand name drug before or after the generic was available?

Very, very likely. This is a common tactic the big drug companies use so they can argue there’s no reason to allow the use of generics. Then, once the generics aren’t possible anymore, the prices go right back up.

Anonymous Coward says:

Re: Did you even bother...

Try and look at the country of production…

The hell of getting any drugs through customs is widely known and accepted internationally. Look at the arguments against ACTA on account of generic drugs as an example. Unfortunately the background costs are not specified, so we cannot discuss the exact reasons why the products seem to be cheaper.

I do not think the numbers represent the factual situations with sufficient precission, just as extra transport would seem like an expense that is impossible to account for fairly. Just congestures, but the list is far too simplistic not to end up serving a political agenda!

Beech says:

It seems to me what happened here is a big pharma lobbyist met with Sen Hatch and laid out a lot of very convincing arguments about why whatever is going on is BAD. The Senator neglected to take notes, but decided he better do something to correct this situation because a big donor is mad. So he fired off a letter laying out the arguments the lobbyist used as best as he could recall them, but it ended up coming out all muddled and confused. His real misstep here was not just having the lobbyist write the damned thing for him and stamping his name on at the end like most all the other politicians do.

John Fenderson (profile) says:

Re: Re:

It seems to me what happened here is a big pharma lobbyist met with Sen Hatch and laid out a lot of very convincing arguments about why whatever is going on is BAD

Is there any indication at all that this is the case? Because ti seems more likely that this is just another instance of the standard procedure: the pharma lobbyist told Hatch to do what they say or he won’t get any more of that sweet, sweet pharma money.

anonymouse says:

No

Just more proof that America is just as corrupt as any third world country. Nothing new here , unless you were somehow under the impression that America was not as corrupt as it is.
The only difference with America and some of the most corrupt is that America is very open about what they are doing, they dont even try to hide it, and try to say that because it is not hidden that there is nothing wrong with it.

Androgynous Cowherd says:

Whose money, though?

So, even as Hatch’s letter is full of bluster about misspending money, the details actually seem to suggest that they saved money.

Ah, but they saved whose money? Not Hatch’s buddies in the IP industry.

In addition, I’d like to note the redundancy of putting “from the also-he’s-lying dept” directly after a title heading that starts “Senator X Says …”.

Add Your Comment

Your email address will not be published.

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...
Loading...