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No Deal On Cheap Third-World Drugs

Disappointed World Trade Organization diplomats headed home early Friday after failing to agree on a deal to allow poor countries to import cheap copies of patented drugs for killer diseases like AIDS, malaria and tuberculosis.

The failure was a surprise, since the same officials had earlier accepted the agreement after the United States ended an eight-month holdout.

The collapse came after the United States and four other nations — Brazil, India, Kenya and South Africa — hammered out a hard-fought compromise. Brazil and India are large producers of generic drugs, while Kenya and South Africa represent poor countries that want to import them. The United States is trying to protect the patents of U.S. drug companies.

Just as the agreement was to be approved, other countries said they had differing interpretations of the pact.

"Following many hours of intensive consultation, there is a problem with respect to the interpretation," said WTO spokesman Keith Rockwell following the adjournment of the meeting at 1 a.m.

The WTO called another meeting for later Friday, but Rockwell said it was now "very unlikely" that a decision could be taken before a meeting of trade ministers from the WTO's 146 member countries in Cancun, Mexico, opening Sept. 10.

Some developing countries said they would only accept the pact on the understanding that measures to prevent smuggling would not add to the price of the drugs or make it more difficult for needy countries to get them.

The countries also noted that the agreement is supposed to be a short-term fix for a few years. They said they wanted to see work begin quickly to include the deal in the WTO's treaty on intellectual property rights.

The WTO's intellectual property panel earlier adopted a document first proposed last December that will let developing countries ignore some patent rules in importing drugs from cheaper generic manufacturers, along with a statement that aimed to calm the fears of U.S. drug companies.

Under WTO rules, countries facing public health crises have the right to override patents on vital drugs and order copies from cheaper, generic suppliers. However, until now they could only order from domestic producers — useless for the huge majority of developing countries that have no domestic pharmaceutical industry.

U.S. pharmaceutical research companies were concerned that a deal to allow countries to import generic drugs would be abused by generics manufacturers and could also lead to drugs being smuggled back into rich countries.

To satisfy those concerns, the document was accompanied by the new statement setting out conditions for the use of the measure.

The statement says that rules allowing countries to override patents "should be used in good faith to protect public health ... not be an instrument to pursue industrial or commercial policy objectives."

It calls for special measures to prevent drugs being smuggled back to rich country markets, including special packaging or different colored tablets. Developed countries would agree not to make use of the provision. Some of the wealthiest developing nations would only use the measure in "situations of national emergency or other circumstances of extreme urgency," it added.

Diplomats earlier had congratulated themselves on what they believed was a deal.

"This decision is extremely important for many African countries who need to be able to import generic drugs which are affordable and who don't have the capacity to produce them," said South Africa negotiator Faizel Ismail.

"This decision will contribute to creating the conditions for that to happen, and will certainly have an impact on the ability of governments to save many more lives.

Friday's failure likely will throw a huge cloud over the Cancun meeting and could jeopardize the chance of delegates reaching agreement on other issues as part of the current "round" of trade liberalization negotiations.

"Obviously this is deeply disappointing," Rockwell said. "This is an issue on which all of us wanted to see agreement.

"But in a consensus-based organization, making decisions is a difficult undertaking. All of the members have said they will continue to work on this."

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