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A new high-profile effort to distribute AIDS pharmaceuticals to needy nations gives no privileged role to brand-name drug companies: proof that Canada's cheap-drugs-for-poor countries initiative doesn't have to either, UN envoy Stephen Lewis says.

The United Nations, World Bank, former U.S. president Bill Clinton and the Global Fund announced yesterday that they have hammered out a joint plan to purchase and dole out cheap generic copies of AIDS drugs to poor victims of the disease.

The announcement came as Canada struggles to pass legislation meant to open the door for generic drug makers to export inexpensive duplicates of patented medicines to developing countries.

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Canada has come under fire for a controversial "right of first refusal" clause in its bill, C-9. The legislation, unless amended, would give brand-name patent holders first crack at filling proposed orders for cheap drugs, instead of allowing the contract to be automatically filled by generic pharmaceutical companies that take the trouble to arrange deals.

Prime Minister Paul Martin's government has pledged to rewrite the legislation but still wants brand-name companies, who hold drug patents, to be notified of coming contracts -- and be allowed to bid on them. Senior federal officials have argued they must insert this notification requirement into Canadian law in order to comply with World Trade Organization rules.

But Mr. Lewis says that the Clinton-World Bank-United Nations initiative to buy generic drugs does not spell out a similar "notification" right for brand names to insert themselves in transactions. He says Mr. Martin should take heed of this.

"This is a clear signal to the government of Canada that a consortium as impressive as the World Bank, the Clinton Foundation, the Global Fund and Unicef have collectively agreed that notification is not a requirement," said Mr. Lewis, the United Nations special envoy for AIDS/HIV in Africa.

"These aren't innocents. This is the World Bank and Clinton for heaven's sake. You're not getting legal advice from people who are monarchs without clothes."

He said Mr. Martin's government should drop its insistence on a notification clause. There will be tremendous incentive for brand-name companies to underbid whatever prices generic companies are offering in transactions in order to deny them a toehold in the business, Mr. Lewis said.

This would ultimately discourage drug makers from drumming up supply contracts and providing a competitive counterweight to brand-name companies. "What has bewildered everyone is why the government of Canada is willing to jeopardize its own legislation by giving the brand-name companies a special privilege that no one else requires," Mr. Lewis said.

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Last August the WTO agreed that generic companies and their poor-nation customers should be protected from prosecution if they skirt patents to copy life-saving medicines for needy victims of crises such as AIDS.

A spokesman for Canada's Research-Based Pharmaceutical Companies (Rx&D), which represents patent holders, said allowing brand-name companies to be notified of pending contracts -- and to bid on the deals -- would give needy nations more options.

"We believe the importing countries should have options as to who can supply at the best possible price in the most timely fashion, Jacques Lefebvre said.

A senior federal official sounded a conciliatory note on C-9, conceding that international law did not "technically" require brand-name companies be notified of transactions. The official's comments represent a significant departure from previous Liberal government statements on the matter, but he could not say whether this meant Ottawa would reverse its position.

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