The USA has added Thailand to its ‘priority watch list,’ a ranking of serial violators of intellectual property, and has also expressed its concerns about regulatory barriers and price controls for drugs in some European countries.

The United States Trade Representative (USTR) has issued its annual ‘Special 301’ report on “the adequacy and effectiveness of intellectual property rights” protection by the country’s trading partners. The centrepiece of the report is the priority watch list of the worst offenders and the only new addition this year is Thailand. The other 11 are Argentina, China, Chile, Egypt, India, Israel, Lebanon, Russia, Turkey, Ukraine and Venezuela.

The USTR’s decision has much to do with piracy of CDs and DVDs,as well as counterfeited consumer and industrial goods, but specifically noted that “trade in counterfeit pharmaceuticals is a particularly grave concern”. With this in mind, it is not surprising that Thailand makes the list, given its recent decision to issue compulsory licenses for Abbott Laboratories' AIDS drug Kaletra (opinavir/ritonavir) and Plavix (clopidogrel), the anti-clotting agent sold by Sanofi-Aventis and Bristol-Myers Squibb, allowing the use of patented material to produce cheaper local versions. However, this reason was not given by the USTR.

The move brought criticism from a number of groups, notably Knowledge Ecology International, whose executive director James Love, noted that "the sanctioning of countries for using legitimate and important flexibilities…brings shame to all US citizens who are increasingly seen in Thailand and elsewhere as bullies and hypocrites." He claimed that “what the Bush administration has done is to sanction Thailand for doing what it is supposed to do: ‘promote access to medicines for all’,” and concluded by saying that “we should not be giving the impression to the world that US pharmaceutical industry lobbyists can use USTR to settle commercial disputes, entirely outside of the framework of global trade rules.”

US worried about price controls elsewhere

The USTR report also noted that even where a country’s intellectual property rights regime is adequate, “price controls and regulatory and other market access barriers can discourage the development of new drugs.” To address these issues, the USTR and the Departments of Health and Human Services, Commerce and State formed a task force and has begun dialogue with some countries whose ideas on prices and regulatory affairs may not tally with those of the USA.

This has taken the form of pursuing free trade agreements with Australia and most recently South Korea which include commitments to improve access to innovative products “and to ensure the transparent, predictable, and non-discriminatory pricing and reimbursement of innovative and generic pharmaceutical products, medical devices and biologics.”

The USA has also “established a constructive dialogue with Germany on policy goals and concerns related to health care,” said the USTR, after it raised specific concerns related to Germany’s reference pricing system for determining product reimbursement “and the transparency of the government’s decision-making process regarding pharmaceutical pricing.”

The Americans are also less than pleased about moves in Poland “which appear to reduce the official maximum wholesale and retail prices for imported drugs by 13% while generally leaving unchanged the prices for drugs of Polish origin.” Talks with the Poles, as well as with Italy and France are planned in the coming year, in a bid to promote “expanded dialogues.”