USA for Innovation Ad Campaign Highlights Thailand’s Theft of American Assets

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(http://www.usaforinnovation.org) today announced an advertising campaign to
highlight Thailand’s new military regime and its recent threats to seize
patents owned by American companies. The advertisement, a full-page ad in the
Wall Street Journal, highlights a recent movement by the new Thai military
regime, which assumed power by coup last September, to steal American medical
innovations.

Additionally, supporters of USA for Innovation delivered over 35,000
letters to

President Bush, Administration officials and Congressional
leadership urging the United States to “take retaliatory action in the form of
trade or economic sanctions or the removal of military aid.”

    Complete Text of the Advertisement

    "Slouching Towards Burma
    Thailand's Radical New Regime

    When military dictators take over by coup, the people lose. Right now,
    General Surayud Chulanont is steering Thailand the way of Burma.

    First, he lined military pockets with pay increases of $9 million and new
    military spending of $1.1 billion.

    Then the opposition started disappearing. Human Rights Watch last month
    released a report detailing 22 cases of targeted 'disappearances' by the
    Thai military in the southern provinces.

    Then the Ministry of Health threatened to kidnap American tourists. The
    military-appointed representative at the 
World Health Organization
, Dr. Suwit Wibulpolprasert, proposed in January holding Western tourists hostage to bargain for flu vaccines. Then coup leaders hastily imposed draconian measures on foreign-owned companies -- like capital controls, restrictions on business advertising and surveillance of Americans working in Thailand. And now they are stealing American assets for military benefit. The new military-appointed Minister of Health, Mongkol Na Songkhla, has begun to override the patents on American medical innovations to strengthen manufacturing for the military-controlled Government Pharmaceutical Organization. The U.S. Patent and Trademark website claims that such theft costs America $250 billion and 750,000 jobs per year. In a global economy American innovation is our comparative advantage. A study by USA for Innovation estimates that U.S. intellectual property today is worth between $5 trillion and $5.5 trillion, equivalent to about 45 percent of the U.S.
GDP
and greater than the GDP of any other nation in the world. We urge President Bush and the Congress to Protect America's Interest and the People of Thailand." The image “https://i1.wp.com/washtimes.com/images/washingtontimes-logo-small.gif” cannot be displayed, because it contains errors.

Troubles from Thailand

By Ken Adelman

April 27, 2007

America’s
critical efforts to promote good governance around the world face
several obstacles. At the World Bank, for example, the lavishly paid
globocrats seem incapable of stopping payment to Third World
kleptoptocracies. And its president, Paul Wolfowitz, has had his good
governance reform agenda stalled as he is embroiled in a scandal over
payments to his Bank-employed lady friend.

But the importance of good governance has never been clearer.
Let’s take as a “case study” something relevant this week when
yesterday saw the celebration of World Intellectual Property Day, and
the United States Trade Representative (USTR) is expected to release
its “Special 301 Report” on Monday — an annual listing of IP violators
around the world. Numerous organizations, including USA For Innovation,
believe Thailand should be elevated to the Priority Watch List, a
special section reserved for the worst offenders.

What happened to Thailand? We’ve long regarded Thailand as a
fine little country, friendly to America, nice rulers — the stuff of
“The King and I.”

Thailand has for years been one of the rising Asian tigers,
growing rapidly as it harnesses the global trading system to its
benefit. And since World War II, when Thailand became an ally of the
United States and deepened its business and commercial ties with the
West, it has grown at an average of almost 8 percent annually. It rose
to become the second largest economy in Southeast Asia. But it’s no
longer your grandfather’s Siam.

In September 2006, Thailand’s democratically elected
government was toppled in a military coup, while Prime Minister Thaksin
Shinawatra was deposed while addressing the U.N. General Assembly. When
Daniel Patrick Moynihan titled his memoirs on serving as our ambassador
to the U.N. “A Dangerous Place,” he didn’t know the half of it. The
ruling junta has since initiated a series of policy measures that
jeopardize Thailand’s economic prospects as well as American jobs and
technological innovation.

Shortly after taking power, the coup leaders hastily and
shortsightedly announced new foreign capital controls. In a fit of
economic nationalism, the government is spooking outside investment in
the country by increasing surveillance of economic transactions,
restricting business advertising and pushing foreign investors to sell
Thai holdings.

This political and economic recklessness is already taking a
punishing toll. Foreign direct investment is understandably being
scared off. Several estimates project Thai growth at less than 4
percent this year, far below the 7.3 percent that the World Bank
forecasts for the economies of East Asia.

And now the military has set its sights on stealing U.S.
innovation, the cornerstone of the American economy. A 2005 USA for
Innovation bipartisan study by economists Rob Shapiro and Kevin Hasset
estimates U.S. intellectual property is worth between $5 trillion and
$5.5 trillion, equivalent to about 45 percent of U.S. GDP and greater
than the GDP of any other nation in the world.

The new attack on American IP takes many forms. The
International Intellectual Property Alliance noted in its annual
recommendations to the USTR that piracy rates increased for every U.S.
copyright-based product in 2006, at record-setting losses for American
innovators. In addition to copyright concerns, piracy of consumer
goods, satellite, cable and telecommunications signals thrive largely
unchecked by the Thai government.

Most recently, the government brazenly announced it was
breaking patents on drugs produced by Western corporations. And while
this action is in line with the rampant theft of U.S. innovation in
Thailand, it is also glaringly self-serving. An official Thai spokesman
admitted busting patents “will be good for local pharmaceutical
companies to improve their capacity.” Perhaps unsurprising, one local
pharmaceutical supplier happens to be owned by the Thai government, the
Government Pharmaceutical Organization.

Surely Thai officials in D.C. will offer some lame excuses.
When making the rounds this week, its health minister will claim that
his government must break U.S. patents since it cannot afford to pay
for patented pharmaceuticals and other medicines.

This doesn’t fly. For his government somehow could afford a
pay raise for the regime’s military buddies of $9 million, and to boost
its overall military budget by a whopping $1 billion.

USA for Innovation’s 8 Deadly Lies About Thailand’s Theft of American Innovation
 
 

April 25, 2007

Washington, DC – USA for Innovation (www.usaforinnovation.org) today
announced a special report highlighting the 8 lies about Thailand’s
theft of American innovation by the new military regime and Health
Minister Mongkol na Songkhla. Lie #1: Thailand is a poor country and
cannot afford Western medicines.
Thailand has the 21st largest economy in the world. Thailand is in the
top 10% of the richest countries in the world, richer than 206 other
countries included on the list of the 2006 CIA World Factbook. The
World Bank and International Monetary Fund confirm Thailand’s strong
position in the global economy, respectively ranking Thailand 20th and
21st.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
Lie #2: Thailand is just doing everything it can to address its AIDS problem.
According to the United Nations, Thailand’s government spent $93
million on AIDS in 2004, the last year publicly available. The World
Health Organization notes that Thailand spends far less on health care
(3.3% of GDP) than peers such as Argentina (8.9%) or poorer countries
like Cambodia (10.9%) or Lebanon (10.2%).
While it is encouraging to see Thailand increased its spending on AIDS
from $70 million in 2003, the truth is that the government spends much
more money to support its state-owned telecommunications company, media
empire, bank and airline. After the military took control of Thailand’s
government in a coup last September, the new government raised military
spending by $1.1 billion, an almost 50% increase from the previous
year. In other words, Thailand is stealing American technology to
finance 2.4% of its radical remilitarization. What are they going to
steal to fund the rest of it?
http://data.unaids.org/pub/GlobalReport/2006/2006_GR_ANN3_en.pdf
http://www.who.int/whr/2006/en/
http://www.nationmultimedia.com/2006/12/08/opinion/opinion_30021038.php
Lie #3: Thailand is just trying to lower the cost of Western medicines.
A good place to start would be Thailand’s self-imposed tax and tariffs
on these medicines. Thailand applies a 7% value-added tax (VAT), which
the Bangkok Post reported on April 23 may rise to 10% to make up for
other spending priorities. The government also adds another 10% tariff
on drug imports.
http://www.bangkokpost.com/Business/23Apr2007_biz26.php http://www.aei.org/publications/pubID.25890/pub_detail.asp
Lie #4: Thailand’s Government Pharmaceutical Organization issues drugs that are safe and effective.
The GPO’s distribution of dangerous medicine like GPO-vir is
contributing to the unusually high resistance levels of Thai patients.
As American Enterprise Institute scholar and noted HIV/AIDS expert
Roger Bate recently stated:
There is no decent “bioequivalence data” on the quality of
GPO-manufactured drugs, meaning that they are at best approximate
copies and should not be labeled generics&As to fostering drug
resistance, a 2005 study by Thailand’s Mahidol University’s faculty of
medicine found that GPO-vir, a copy HIV treatment GPO makes, had
between 39.6% and 58% resistance in the 300 patients investigated. This
result is perhaps the worst case of HIV drug resistance in the world.
http://www.aei.org/publications/pubID.25585/pub_detail.asp
Lie #5: Thailand’s public health system is lowering costs for medicines
In addition to the taxes and tariffs, Thailand’s Government
Pharmaceutical Organization builds in its own profit margins before
distributing drugs to the people of Thailand. In 2002 Thailand’s
then-Auditor-General Jaruvan Maintaka issued a report saying that the
GPO sold about 60% of its medical products to government agencies at
above market prices. In some cases, prices were marked up 1,000
percent. Investigative journalist Daniel Ten Kate notes in the Asia
Sentinel earlier this year:
In 2003, the GPO made a net profit of 624.2 million baht [$19.2
million] on revenues of 3.7 billion baht [$114 million]. A year later,
revenues topped 4 billion baht [$123.3 million], and rose to five
billion [$154.1 million] in 2005. Profits for the GPO topped one
billion baht [$30.8 million] in 2005, according to Anuthin
Charnveerakul, the deputy public health minister under Thaksin, who
also scolded the state enterprise for spending a mere 19 million baht
[$585,541]  just two percent of net profit  on research and
development. Now the GPO plans to double revenue to 10 billion baht
[$308.2 million] by 2010.
http://www.asiasentinel.com/index.php?option=com_content&task=view&id=351&Itemid=34
Lie #6: Thailand is in the middle of an AIDS crisis.
The world is in the middle of an AIDS crisis. According to the 2006
United Nations Report on the Global AIDS epidemic, Thailand’s HIV
prevalence rate is less than 1 percent. It is insulting to claim
crisis when it is really a matter of spending priorities. In fact,
every penny Thailand refuses to pay for medicine is one less penny
available to develop the medical innovation necessary to help countries
such as Swaziland (20% of the total population is HIV+), Zimbabwe (14%)
and Botswana (17%) who are struggling to find public health solutions
to this horrible disease.
http://data.unaids.org/pub/GlobalReport/2006/Annex2_Data_en.xls
Lie #7: The drug companies started this fight.
Thailand’s new Minister of Health did not make a single effort to
negotiate with drug companies before issuing compulsories licenses. He
opted instead to launch an illegal first strike. Former U.S. Secretary
of Health and Human Services Tommy Thompson, in calling for companies
and government to negotiate a solution, described the Ministry of
Health’s actions in the press:
Unfortunately there was no diplomacy in this process: there was
virtually no effort to reach out to the U.S. government or the
companies that developed the drugs to arrive at a solution before the
licenses were issued. Thailand’s aggressive first step has now created
an escalating battle between government and industry.
http://www.marketwatch.com/news/story/commentary-need-medical-diplomacy-growing/story.aspx?guid=%7B310AEA38-3BF5-4676-B7B2-529B847E84DF%7D
Lie #8: Thailand’s recent use of compulsory licenses is legal.

Thailand’s
interpretation of compulsory licenses, as outlined in their February
2007 whitepaper wishes to remove all limits on use of the compulsory
license for medical products. Thailand’s recent movement to issue
compulsory licenses for three medical products is not consistent with
the rules outlined in the WTO’s Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS). For a detailed discussion, please
see Ambassador Ken Adelman’s April 23, 2007 letter to Ambassador Rice,
Secretary Gutierrez, Secretary Leavitt and Ambassador Schwab.
http://usaforinnovation.org/images/2007_adelmanletter.pdf
About USA for Innovation
USA For Innovation is a non-profit organization dedicated to the
protection of intellectual property and continued innovation around the
globe. USA For Innovation educates decision makers, the media and
general public about threats to innovation. For additional information,
please contact us at 866-646-8668 or maura@usaforinnovation.org.

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