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US, India, reach deal on cheap drugs

Geneva, Aug. 27 (Reuters): The US and a key group of developing countries have reached a deal on how to ensure poor states have access to cheaper medicines, potentially ending a row undermining free trade talks, an envoy said today.

“The five are agreed,” the chief mediator on the drugs issue, Singapore’s ambassador Vanu Gopala Menon, said.

Ensuring poorer states unable to manufacture medicines can import cheap generic drugs when they need to is seen as vital to beating major killers such as AIDS and malaria. But it also means setting aside patent laws protecting multinational firms.

The five — the US, generic drug producers Brazil and India, and African representatives South Africa and Kenya — are not a formal group but are seen as standing for all sides of the argument and are at the heart of the negotiations.

Kenya and South Africa had already indicated that they could accept a deal even as Menon was preparing to issue a three-page draft to the World Trade Organisation (WTO) 146 member states.

WTO states had been close to an accord at the end of last year when all but Washington backed a plan put forward by the then chief mediator, Mexican ambassador Eduardo Perez Motta.

But US drugmakers feared the agreement could let generic companies in developing countries, such as Brazil and India, start copying non-essential life-style drugs like Viagra.

A copy of Menon’s draft leaked to non-governmental organisations said US opposition to the so-called “Motta” text would fall away if WTO states pledged not to abuse the system and only waive patents “in good faith”, not for commercial gain.

Under Menon’s draft, all “reasonable” steps would also be taken to ensure drugs and drug ingredients sold to poor countries did not turn up on rich country’s markets.

South Africa’s top trade envoy Faizel Ismail said the plan was “reasonably balanced” and “close to an acceptable solution”.

“It provides some comfort to the US pharmaceutical companies that were worried about abuse,” he said.

Agreement on drugs would give a needed boost to the WTO’s troubled Doha Round of free trade talks ahead of a crucial summit next month in the Mexican city of Cancun.

However a formal decision is unlikely to be reached before Thursday as all delegations must get the green light from their governments and all WTO decisions are taken by consensus.

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