US Department of State cables released to Wikileaks, the whistle-blowing website, provide insights into how ambassadors and embassy staff aid the pharmaceutical industry in negotiations with foreign governments regarding drug pricing and market protection.
Between 2001 and 2010, U.S. embassies and consulates published more than 20 cables a week that mentioned pharmaceuticals.
While some cables show diplomats acting in an advisory capacity, in some cases, ambassadors and staff pressured foreign governments to change local laws to make them more favorable for pharmaceutical companies in return for continued US aid and investments. In still others, embassy staff appear to cede their official role to drug company representatives.
The State Department's policy regarding US pharmas doing business in foreign markets are summarized in a 2008 article ( "Intellectual Property Rights and the Pharmaceutical Industry") by a former director of the State Department's Office of International Health Affairs. The article rigorously defends the industry's interests in protecting profits and extending long-term market protections in countries rich and poor.
Exerpts from a small sampling of the cables are below.
Fair' is a Political, Not an Economic Term'
A February 2, 2010, cable issued by the embassy in Ankara, Turkey, describes a meeting between US Ambassador James Jeffrey and Turkey's deputy prime minister Ali Babacan concerning US pharmaceutical interest in Turkey.
"The Ambassador also noted continuing interest by US pharmaceutical companies in using Turkey as a base for regional manufacture and export to third countries. The US economic role in Turkey is much larger than bilateral trade data shows, the Ambassador argued, noting major investments by US companies like Ford that result in millions of dollars in exports to third countries. This helps both countries and there remains interest in building a pharmaceutical manufacturing hub in Turkey if the right policies are in place. He raised concern about the effects of a new Health Ministry decree that severely limits the approval process for new pharmaceutical drugs.
"On a related matter, Babacan defended the GOT's [government of Turkey] imposition of a three-year pricing cap on pharmaceuticals, arguing that all other sectors had taken some cuts during the economic downturn, and the drug companies had to "pay their fair share."
Ambassador Jeffrey responded that '"fair" was a political, not an economic term, and that pharmaceuticals require long term, expensive research and development."
Just three days earlier, Jeffrey had sent a cable to the Office of the US Trade Representative and the Department of Commerce containing the following observations:
January 28, 2010: "At this point, the industry is still hoping to arrive at a negotiated compromise with MOH, [Ministry of Health] although they have asked us to raise the issue with our GOT interlocutors as appropriate. As the GOT appears to be emboldened by its recent "success" in forcing an onerous compromise pricing deal on the industry, however, there is reason to be pessimistic that it will back down on this issue. From the GOT perspective, it gets the best of both worlds -- access to drugs that they truly want and a powerful bargaining tool to lower prices....The pharmaceutical industry has been remarkably willing to accept abuse from the GOT over the past year (suggesting that their profits are still healthy enough to make Turkey interesting), but at some point their tolerance will dry up and Turkey will find itself cut off from the most innovative and effective drugs."
Doing Business With Repressive Regimes
To what extent do US business interests influence foreign policy? This continues to be an important consideration today given the explosion of popular revolts across the Middle East, in China, Russia and across Europe.
Riyadh, Saudi Arabia
In a January 30, 2010 cable from the embassy in Riyadh, Saudi Arabia, staff described a meeting hosted by the Saudi Council of Chambers and attended by Holly Vineyard, deputy assistant secretary of commerce for Africa, the Middle East, and South Asia in the International Trade Administration.
The Chairman of the Council, Dr. Fahad Al-Sultan, told the US diplomat that the Saudi government (SAG) "was working to revolutionize Saudi industry by restructuring and downsizing the public sector, and by privatizing state-owned businesses.... Later in the discussion, participants raised a number of topics these discussions should address, including investment in pharmaceuticals in the Kingdom, investment in the further development of downstream petrochemicals, and investment in the aerospace industry."
In each cable, diplomats discuss benefits and risks to US companies but rarely, if ever, broach the topic of human rights. While it may have been discussed in meetings, none of the cables pertaining to US pharmaceutical company interests mention a firms' - or the United States' - expressed desire to abide by international human rights conventions while conducting business in the host country.
Despite a government ban on public protests since March 5, thousands of Saudis have demonstrated for political reform. Hundreds have been arrested and several have been killed for taking part in protests.
Santo Domingo, Dominican Republic
In a December 17, 2009, cable with the subject line "PHARMA Industry Laments Lack of Patent Protection" embassy staff appear to cede their lead diplomatic role to a pharmaceutical company.
Following a meeting attended by embassy staff, representatives of PhRMA, the industry trade group, Novartis, Merck, and Government of the Dominican Republic (GoDR) officials, a cable relayed that "the Novartis representative observed that the DR was a critical market for the pharmaceutical industry, not necessarily in proportion to its market share but due to its important role as a Free Trade Agreement (FTA) partner of the United States. The industry would like to use successful cooperation with the DR as an example to encourage other countries throughout Latin America to follow its lead (and not the lead of the "Venezuelas and Bolivias")."
Clearly frustrated by the Dominican Republic's lack of resources for a streamlined patent approval process, the industry representatives laid out their demands, as related by the embassy:
"In order for the patent and registration process to work the way the industry would like, the GoDR will need to take several steps. First, ONAPI's [Oficina Nacional de la Propriedad Industrial] technical staff will need to receive training in order to assess the technical and scientific merits of patent application (and its members will need to remain in the office). Second, ONAPI will need to move through the backlog of cases and ensure that patents -- both issued and pending -- are included in a patent registry that it shares with SESPAS. Then, SESPAS will have to use this information in deciding which products to place on the sanitary registry. Finally, the GoDR will need to establish an enforcement mechanism - perhaps through the criminalization of patent violation - that will allow patent holders to file suit against patent violators.
"However, barring significant diplomatic pressure from DR-CAFTA partners, it is unlikely that the patent-issuing process will improve in the near future."
In a cable summarizing a strategy meeting with members of the Local American Working Group (LAWG) of the Pharmaceutical Association in Portugal, diplomats at the US embassy in Lisbon and European colleagues advised industry representatives to tone down their tough talk when dealing with Portugal's government officials.
"The LAWG session was productive, and a coordinated pharmaceutical industry approach to relevant GOP ministries has a better chance of succeeding than the uncoordinated overtures used before. It is ironic, however, that one of the major LAWG complaints is about the slow, uncoordinated, and non-responsive regulatory regime, given that we have been urging LAWG to change their lobbying approach for over eighteen months."
LAWG members including Abbott Labs, Amgen, Bristol-Myers Squibb, Janssen-Cilag, Pfizer, Merck Sharp & Dohme, Schering-Plough, AstraZeneca, GlaxoSmithKline, Bayer, Novartis, Roche and Aventis were advised to "accentuate the positive" when lobbying Portugal officials.
"All diplomatic representatives agreed that future dialogue with the GOP would be more effective if conducted jointly by industry representatives....U.K. Ambassador Ellis emphasized the need for LAWG members to link their recommendations to Portugal's innovation and technology goals when speaking with public officials and to stress the advantages of proposed reforms (e.g., increased industry investment in Portugal, job creation) rather than dwelling on corporate financial losses.
"Charge d'Affaires pointed out that, despite the purported transparency and predictability problems with Portugal's regulatory system, none of the LAWG members had left the market, which puts them in a precarious position when arguing to GOP officials that the current business climate is untenable. Charge d'Affaires recommended that dialogue with the GOP avoid an overemphasis on the intolerability of the status quo and instead, as Ambassador Ellis had said, focus on potential benefits to the Portuguese economy from policy and regulatory improvements."
Industry Versus Populist Concerns
A cable from the embassy in Quito, Ecuador, titled "Pharmaceutical Companies Seek USG Help On GOE Proposal To Limit Profits" requests guidance from Washington on how to respond to the Ecuadoran government's proposed price controls decree after the staff received complaints from Bristol Meyers and Pfizer.
"The pharmaceutical representatives complained that the GOE [Government of Ecuador] is trying to exert further control over drug prices and company profits.
"This latest salvo from the GOE [Government of Ecuador] is another attempt to address populist concerns about the price of drugs in Ecuador. The fact that the proposed decree would adversely impact both major pharmaceutical companies and local producers of generic drugs means both will probably lobby against the proposal, making issuance of the decree less likely. Still, any GOE effort to lower drug prices would be viewed favorably by many and the Gutierrez administration could use all the popular support it can get. Thus, populist concerns could win the day."
A May 4, 2006, cable summarized a meeting attended by then-U.S. Ambassador to Lebanon Jeffrey Feltman, currently Assistant Secretary of State for Near Eastern Affairs, French Ambassador Emie, European Commission Head of Delegation Renauld, members of the pharmaceutical industry and Lebanon Prime Minister Siniora, Health Minister Khalifeh, and Economy and Trade Minister Haddad.
"The Ambassador and Ambassador Emie emphasized the need to implement existing legislation on drug registration and amend legislation concerning data protection and patent protection in order to improve the existing IPR [ Intellectual Property Rights] climate in the pharmaceutical industry," according to the cable.
"Pharmaceutical industry representatives emphasized that the lack of data protection for their products was serving as a significant impediment towards future investment in the Lebanese market. They stressed to GOL officials that Lebanon needed the quick implementation of law 530 to enable Lebanese patients to have better access to innovative and quality pharmaceutical products. They responded to Minister Khalifeh's concerns about ethics by stressing the existence of the Code of Pharmaceutical Promotional Practices for the Middle East. The industry representatives stressed their view that Lebanese regulatory authorities should recognize both the non-disclosure of data submitted by pharmaceutical companies and the non-reliance of such data from generic producers and importers for a minimum period of time.
"Ghassan Hamadeh, an advisor to Minister Khalifeh, told the gathering that the Ministry of Health was working diligently on an action plan to improve the IPR climate with regards to the pharmaceutical industry, although results were slower than desired."