REGIONAL COMMITTEE Fifty-ninth Session Dhaka, Bangladesh
Provisional Agenda item 15 SEA/RC59/17 20 July 2006
22-25 August 2006
INTERNATIONAL TRADE AND HEALTH
Contents Background..................................................................................................... 1 Relevance to the South-East Asia (SEA) Region.................................................... 2 Planned Activities ............................................................................................ 5
Background 1. by trade rules and agreements and by international treaties. These rules are developed and these agreements are usually negotiated without or with little involvement or input from the health sector; in fact, the health sector often several factors, which include a lack of awareness on the part of trade negotiators that some of their actions may have important repercussions for public health, as well as lack of knowledge on the part of health officials about issues at the intersection of trade and health. In addition, mechanisms for consultation and coordination between the two sectors may be non-existent, or are not used effectively where they do exist. 2. In order to address this issue, in May 2005, a resolution was proposed to the becomes aware of them only when they have already been finalized. This is due to Health policies, and thus indirectly health outcomes, are increasingly affected
Executive Board of the World Health Organization, by a group of 14 Member States due to opposition by some developed countries, the disagreement between the
including Bhutan, Nepal and Thailand from this Region. While initially controversial developed and developing Member States was subsequently resolved. As a result,
resolution EB117.R5 was adopted by the 117th Executive Board in January 2006, and subsequently resolution WHA59.26 by the 59th World Health Assembly in May 2006. 3. The resolution addresses the need to promote a constructive dialogue between trade and health at national level and to put the necessary mechanisms for that in place. But while intersectoral dialogue within the government may be the main focus, other parties and partners should also be consulted. This includes the organizations. Academics could especially play a valuable role, since they can be private sector, the academics with relevant expertise, and the consumers encouraged to undertake research that can feed into these discussions. This would help countries to base policies on sound evidence, to identify opportunities and risks and ultimately to maximize the positive effects of trade liberalization and minimize the negative impact on health. 4. Trade in health services can contribute to domestic revenue, and may help to
improve the quality of health services. But it may also cause or aggravate shortages
of health personnel or lead to a two-tier health care system. Developing countries’
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minimal participation in meetings of the Codex Alimentarius remains a cause for concern, since it could result in standards being adopted that do not take into account sufficiently their realities and interests. 5. At the same time, while developing countries are still in the process of
implementing the TRIPS Agreement and of analysing and managing its implications on the prices of pharmaceuticals, they are increasingly being faced with demands set by TRIPS. Such demands, which will further delay generic market entry, are to provide protection for intellectual property rights that surpasses the standards among others made in the context of bilateral free trade negotiations. “TRIPS-plus” provisions have also appeared in recent World Trade Organization (WTO) accession negotiations. These developments are worrisome, since generics play a key role in making medicines more affordable. 6. The World Health Assembly resolution, importantly, does not stop at urging
Member States to promote intersectoral dialogue and create coordination mechanisms. It also urges Member States to then put coherent policies, regulations and laws in place to address the issues that have been identified. Such tangible outcomes ultimately are the real objective of the resolution. 7. The resolution also urges countries to continue to build capacity to understand the implications of trade agreements, and requests WHO to support these efforts at the request of member states 8. working on trade and health. Finally, the resolution provides WHO with an explicit mandate to continue
Relevance to the South-East Asia (SEA) Region 9. The SEA Region is actively involved in international trade. Eight countries in the Region are Members of the WTO, and are therefore participating in the WTO’s ongoing trade negotiations. Bhutan is in the process of acceding to the WTO. There also is an increasing trend of negotiating more regional and bilateral trade agreements, which can present threats as well as opportunities to the health sector. Thus, trade liberalization is taking place in the context of regional Trading System (SAPTA) in place. ASEAN is expanding the scope of the ASEAN Free Trade Agreement (AFTA) and the ASEAN Framework Agreement on Services (AFAS), economic groupings such as SAARC, which is putting the SAARC Preferential
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and is developing economic cooperation agreements with, among others, India, China and Japan. Other regional arrangements, such as the Bangladesh-IndiaMyanmar-Sri Lanka-Thailand Economic Cooperation (BIMST -EC) have been created more recently. Meanwhile, Thailand is the first country in the SEA Region to have started negotiating a bilateral free trade agreement with the United States of America. 10. The issues addressed in the World Health Assemby resolution are very relevant for most countries in the R egion, since effective coordination between the health and trade sectors, as well as with other sectors, is often what is lacking. Thus, for the health sector, trade policies and decisions de facto become a ‘fait accompli’, and the sector is deprived of real possibilities to influence the decisions. 11. However, several countries in the Region have already learned this lesson. Some countries have already conducted intersectoral discussions on an ad hoc basis, while a few others have put more permanent consultation and coordination mechanisms in place. In India a WTO Cell is operating in the Ministry of Health. In Thailand coordination committees that include academics and professional and civil society organizations have been established. Thailand and Sri Lanka have established an Advisory Committee on Impacts of TRIPS, GATS, Globalization and would add value and enrich the learning. Trade on Health. Exchange of experience among Member States in the Region 12. While quantitative data are still relatively scarce, both globally and in the Region, some studies have been conducted towards filling this information gap. Thus, data from India, Indonesia and Thailand show that anticipated foreign investment in the hospital sector may be desirable but does not always materialize - and when it does, it tends not to be in the (rural) areas where domestic need is the greatest. Furthermore, one study has estimated that the emigration of physicians from the Region varies from 4% (Nepal) to 27% (Sri Lanka) 1. In Thailand, the policy of promoting the provision of health care services to foreign patients has the internal brain drain of physicians, who are leaving posts in rural, public sector health facilities to work in urban, private hospitals and clinics2. And while trade in Mullan F. The metrics of the physician brain drain. NEJM 2005; 353:1810-1818. Note that Bhutan, DPRK, Indonesia, Maldives and East Timor were not included in this study. 2 Pachanee C, Wibulpolprasert S. Incoherent policies on universal coverage of health insurance and 1
been successful, but may in the period 2005-2007 contribute an estimated 20% to
promotion of international trade in health services in Thailand. Health Policy and Planning, 2006.
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health services is not caused by trade agreements, those agreements may result in certain policies being ‘locked in’. 13. Meanwhile, in the area of pharmaceuticals, Thailand found that, in 2003, generic versions were available for 42 (56.8%) of the 74 medicines that represented 50% in value of all imported medicines. If generics would not have been available, expenditure on these medicines would have been twice as high (representing additional expenditures of US$ 264 million); alternatively, consumption would have been 35% lower. The same study showed that an additional five years of exclusivity for patented medicines (in line with ‘typical’ provisions in recent US bilateral free trade agreements) could increase drug expenditures by US$ 146 million to 696 million. This is equivalent to 10-45% of the total drug expenditure of the previous year (2002) in Thailand 3 [3]. 14. In SEA Region, WHO’s work in the area of Trade and Health has benefited from the support of the Health Ministers; virtually every Health Ministers Meeting, since 2000, has recommended that WHO should (continue to) work on all or some aspects of globalization, trade and health, and should assist countries in this regard. Regional Director. However, the WHA resolution does strengthen WHO’s mandate to continue supporting countries in this area. 15. In October 2004, the Regional Office hosted an inter-regional workshop on Developing National Policy Coherence and Capacities in Trade and Health for Countries in WTO Accession Negotiations. In line with the recommendations made by the Health Ministers, the Regional Office recently conducted an intercountry seminar on Intellectual Property Rights and Access to Medicines in Dhaka, Bangladesh, in March 2006. This seminar provided participants with an update on recent developments, such as demands for the protection of intellectual property rights that go beyond the requirements of the TRIPS Agreement, which are encountered in the context of bilateral trade negotiations. The seminar also discussed how these demands may further complicate countries’ efforts to ensure access to affordable medicines. A second workshop was held in April 2006 in Colombo, Sri Lanka to build capacity of Member States on the public health impacts of trade in health services. This workshop, while originally conceived to Work in this area has also received support and guidance from the
3
Akaleephan C, et al. Extension of market exclusivity and its impact on the accessibility to essential
medicine and drug expenses in Thailand: analysis of the effect of TRIPS plus proposal.
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build participants’ capacity for undertaking research on health and trade, ended up divert ing somewhat from its original objective since the majority of participants were policy-makers rather than researchers. Yet the workshop was highly effective in impressing upon participants the need for dialogue and coordination and appeared to have accelerated the creation of a committee for coordination on trade and health in the Ministry of Health of Sri Lanka.
Planned Activities 16. The Regional Office has supported studies on selected aspects of health and trade in several countries. Building on those earlier studies, and i n addition to continuing to provide technical support to Member States, it intends, in collaboration with WHO headquarters and the Regional Office for the Western analysis and assessment in the following months. 17. Furthermore , in collaboration with the International Health Policy Programme (IHPP), Ministry of Public Health of Thailand, the Regional Office, in its response to the demands from Member States for technical support to build up regional and country capacity in the area of Trade and Health, is planning to conduct an intercountry workshop on “Regional capacity building on the implications of TRIPSplus provisions on the expenses and access to ARVs and other essential new medicines” later this year. The workshop will assist countries to make quantitative standards of intellectual property protection on expenditures and consumption of pharmaceuticals. estimates of the possible impact of the introduction of TRIPS or “TRIPS-plus” Pacific, to develop a “tool kit” for a comprehensive Trade and Health national