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Press Briefing with Secretary Mike Leavitt Monday, May 19, 2008 SECRETARY LEAVITT: Good afternoon, everyone. Before I begin answering your questions I would like to preview some remarks that I’ll make today at the plenary session and share a couple of observations. The World Health Organization does important work in protecting lives all over the world. The United States has done its part. We will continue to. President Bush pledged $15 billion to fight AIDS around the world. It’s the largest commitment that’s ever been made by a single nation to combat disease outside its borders. We’ve also contributed $1.2 billion to fight malaria. We recently initiated a partnership with six Central American nations to found a new regional training center that is training health workers throughout the region. We’ll be providing medical and dental care directly to Central and South American countries through the medical ship Comfort and three similar naval missions that will take place this summer. The United States strongly supports this organization’s efforts to meet the global need of influenza vaccine. We continue to call on countries everywhere to share influenza samples openly and rapidly and without precondition. No nation can go it alone. All nations have a responsibility to prepare, whether they are developed or developing nations. We all have a responsibility to participate fully in the Global Influenza Surveillance Network and we must all work together to universally implement as well the international health regulations. As part of my remarks today I will also discuss how trading nations now face a new health challenge, and that is ensuring the safety of both exports and imports. I’ve said many times that we cannot inspect our way to product safety. Doing so would bring international trade to a standstill. Instead we need a collaborative system of international standards and local controls that build safety into products right from the beginning. The United States is already working with many of our trading partners to build safety into that process. We’re offering our help to other nations and we’re offering to bring producing nations up to the same high level of safety and quality that will be necessary for prosperity in the upcoming century. The key to this effort is collaboration between companies, between industries, between public and private sector, between governments and within government agencies of the same government. The World Health Assembly is one of the key places where collaboration of this type is undertaken. I’ve had a series of quite productive bilateral meetings in the last two days on the topics that I’ve already mentioned. At this point, this would be a good place for me to stop and to respond to any questions that you have. [Pause]. This is very encouraging. [Laughter]. Question: I just wanted to ask you about the second item there. You’re not talking about counterfeit there, you’re talking about safety of all -- Secretary Leavitt: I’m actually talking about both. Counterfeiting has become a significant problem, particularly in the drug area within the health space. Counterfeiting is obviously a problem in all commerce. I heard, I think the figure was $34 billion a year was the World Health Organization’s number on drugs that are counterfeited, and they of course come with significant -- Question: Did you say four? Secretary Leavitt: Thirty-four. Somebody ought to validate that. That’s something I read a couple of months ago. But whatever the number is, it comes with serious potential health hazards. Almost all of counterfeit drugs come with active ingredients that are either non-existent or dramatically different than the original copied version. I recently had some drugs brought to me from our Food and Drug Administration that had been purchased on the internet. All of them had substantially different active ingredients and in some cases there were no active ingredients. One was beautifully packaged in a way that it made it almost impossible to differentiate. It was a syringe. The syringe had zero active ingredient. It was tap water, essentially. That kind of thing, of course, could do very serious harm to someone dependent on that ingredient. Question: I have a question of female genital mutilation, FGM in short. There is a resolution and if I’m well informed, the United States is not supporting that resolution. Why is that? Maybe you can confirm it or deny it first, and then explain. Secretary Leavitt: If you are well informed, I am not on that issue. That’s something I’ll have to deal with you off-line on. I’m not able to confirm what our position is on that issue. Question: Because there is no position or -- Secretary Leavitt: No, because I haven’t been briefed on what deliberations have occurred. Maybe one of my colleagues can help out on this. Why don’t we talk off-line and we’ll make certain we get information to you. Question: We all want to hear. Secretary Leavitt: All right. Perhaps before we’re finished someone will come up with a solution to that. Question: Regarding the patent issue, intellectual property. Is the U.S. ready to come with perhaps another position in order to make possible the [inaudible]? Secretary Leavitt: As you know, the world has worked through WHO for some time now to develop a framework that we had hoped to finish by April because of various deliberations. That did not occur. We’re hopeful that can be completed. We think that within the context of what’s been presented that we could find agreement. So we’ll be pursuing that hard during the balance of this week. Question: Are you ready to flexibilize your position? Secretary Leavitt: We have a well defined position. We think we are flexible. We want to find a way to resolve this. There are certain principles, of course, that we have to maintain. But we’re committed over the course of the remaining days here to find a solution. Question: To follow up on that notion for a moment. It seemed during the last IGWIG which ended on the 3rd, and even still looking at the bracketed text on the IP, on the intellectual property provisions, that the U.S. stood out for the number of provisions that it seemed to oppose or take a reservation on at least at this point. Is there a way to describe why the U.S. would be the nation that’s the furthest out on resisting this issue? Secretary Leavitt: We obviously have very strong views that intellectual property is the seed or foundation for innovation, and that compromising to the point that innovation is in any way stymied will ultimately cost lives and that’s not an area where we think compromise should be made. We also recognize that we need to come to an agreement. As I indicated, we will work hard during the rest of the week to assure we’re able to do that. Question: [Inaudible] on international structure for product safety, is this [inaudible]? Which [inaudible] for it? How far have you got? Which countries are you talking to? And to what extent are you [inaudible] agreements, or is there something [inaudible]? Secretary Leavitt: Most of you will be aware that in the past year we have seen a series of events involving the safety of products that are produced outside the United States, imported into the United States for use. We’ve seen animal feed, toothpaste, toys, et cetera. Something quite fundamentally has happened in the last decade and that is the emergence of a global market. The problems we see manifesting themselves we believe are early warning signs of a global system that is inadequate to assure safety. The President in order to assess this appointed a working group of his cabinet plus a couple of other members, appointed the Secretary of Health and Human Services as chairman, and tasked us with taking a deep look at our import safety system. The complexity of this issue I think is well represented by the fact that we had ten members of the President’s cabinet at the table. There are obviously components of diplomacy, of trade, of health, of enforcement, many other components, and each of them have a different perspective. This problem looks different if you are a law enforcement agent guarding the borders of your country than it does if you’re a trade representative or if you’re in public health. We divided into two very significant efforts to make the deepest look that’s ever been done in the United States on this issue. One went into all of the 12 different departments and began to ask the question what will our needs be in the future? The other began to move around the country and look at all the parts of our system. I personally went to more than 40 cities where I went to seaports and border crossings and production facilities and wholesalers and retailers. I inspected everything from gingerbread houses to imported tire irons. I came to the conclusion and reported to our President that we needed to make a very basic change in our country. Our strategy for the past would not provide us the protection we need in the future. In the past we have stood at our borders and tried to catch goods coming into our country that were not safe or high quality. There’s just too much now. We import from 825,000 different sources in our country. It’s coming into over 300 different ports of entry. Nearly two trillion dollars a year coming into the United States from other countries. Just to give you a sense of perspective, that’s about the size of the economy of France. Trying to inspect everything to assure safety will simply not work. It would bring global commerce to a standstill. So we’re changing our strategy from standing at the border trying to catch things as they come in to rolling the borders back so that we can assure that quality is built in every step of the way. I think this is well illustrated by a meeting I had in a lettuce processing plant. The manager said our motto is “Know your grower.” When I inquired what he meant by that he said I not only want to know where this was grown, I want to know who the farmer was, I want to know when it was planted, what kind of water was put on it, the quality of the nutrients, when it was picked, who handled it. I want to know at every step of the way that this was handled in an appropriate way so when it gets to me I know quality and safety has been built in. That typifies our approach in the future. We’re saying to the world we want you to have access to American consumers. We want to have access to your markets. But if you’re going to produce goods for American consumers, you need to meet the standards that Americans expect of quality and of safety. And our proposition to producers outside of our country is basically this. If you can demonstrate that you have met American standards we’ll give you rapid entry into our country. We would expect you would do that through a process of independent certification where we know that someone we trust has identified that you are building safety and quality in. At the same time anyone who chooses not to seek that kind of independent certification can expect heightened scrutiny at our borders. We are not alone in this effort. That is to say I had the health ministers from all over, well, a number of the largest countries in the United States last November. This topic dominated our conversation. This is a subject that’s happening in every major market in the world right now. Why is this happening? It’s happening because we’re seeing a maturity in the global market place. These are problems that did not exist a decade ago and are slowly becoming more and more prominent. Now if the United States is going to be rolling back its borders so as to inspect goods that are produced in other areas, so are other countries. I was in India not long ago. It became evident to me how closely integrated the American pharmaceutical industry has become with production facilities in India. There are 90 to 100 facilities producing drugs for consumption in the United States. We need to inspect those facilities on a regular basis. The same is likely true for Canada and Australia. It’s likely true for many members of the European Union. So does it make sense for the United States to inspect those facilities and the next day for the UK to inspect them, and the day after that for the Germans to do it, and the week after that for the Canadians, and the day after that for the Australians to come in and inspect the same facilities? It likely does not. So there is need here for us to begin working together to determine how best to accomplish this type of independent certification. We are inventing new tools for the global economy. This is pioneering. Is there a well laid out plan? Not yet. But is there conversation among those of us responsible for this portfolio? Indeed there is. Question: You mentioned that you had a number of bilaterals. Can you maybe highlight a couple of the more important ones from whom did you meet and what major issues did you discuss? Secretary Leavitt: I’ve had a trilateral with my colleagues from Mexico and from Canada. I’ve had a bilateral with the Minister of Health from Indonesia to follow up on a number of issues related to our interactions. One of them, of course, is sample sharing. Another related to the laboratory that we have in common there. I’ll be meeting later today, or tomorrow, with the Egyptian Health Minister where I intend to make a visit soon. Ethiopia. I think I misstated. So I have a series of them and I’ve recently been in China where I met with my colleague in China. I was in Vietnam a couple of months ago and I hope to see the delegation from Vietnam. Question: In your bilateral with the Indonesians, I assume it was the Health Minister. Secretary Leavitt: Yes. Question: What impression did you attempt to impress upon him in terms of, her, in terms of sample sharing? And what was the response you received? Secretary Leavitt: This was a follow-up on a meeting I had in Indonesia with the Minister and with their President and other officials. We have been working along with, in a multilateral process, to resolve the issue of sample sharing. And we’re hopeful that by November of this year we’ll have a protocol under which that can be done. While I was in Indonesia at the suggestion of the Indonesian government, we laid out a time period of 60 days for more intensive work. That’s going forward. There will be a meeting on Thursday that will be as part of the multilateral process so we can make a progress report in July. So again, we continue to make progress. We have, again, in the same way we do on the intellectual property discussion, there are a couple of principles that are highly important to us and many of our friends. Question: I just wanted to follow up on that. You haven’t received any firm commitment on the Indonesian side that the sample sharing would actually go through [inaudible]? Secretary Leavitt: Actually, not a great deal changed as a result of our meeting today. However, there is a meeting on Thursday as part of the multilateral process where we’re working to develop the specifics of how such a system could work. I’ve made clear that the United States wants to be part of such an agreement. There are many parts of the sample sharing process that need to be improved. We’re open to that improvement. What we aren’t willing, of course, to do is to engage in any system that would involve compensation for virus samples. This is based on a 60 year tradition. That’s one of the great public health successes in history. We’re anxious to not see that compromised in any way. Question: Sorry, which [inaudible] multilateral [inaudible]? Secretary Leavitt: It’s part of the ongoing multilateral discussions that are hopefully leading to a solution in November. The Australians will be there. They’re leading this. The Americans will be there, Indonesia will be there, and I’m not sure who else. Question: [Inaudible] planning to start a strategy on alcohol during this week’s assembly. I was wondering what your country’s position on that. Secretary Leavitt: We see it as an important initiative. It is among a series of high risk activities that underscore the need for prevention. I believe we’re all finding the more we can do to prevent engagement in high risk activities, the lower our health care costs will be and the higher and healthier our populations will become. Question: I guess I’ll go back to the follow up of the follow up on the pandemic flu issue. It seemed to me that one of the anxieties on the part of developing countries was that they’re sharing their virus samples and the labs that are handling these are in developed countries and there was a concern that it seemed the developed countries were lining up sufficient quantities for their populations in some way, but that the developing countries didn’t have that same ability to set that up. Is that a fair characterization of one of the -- Secretary Leavitt: I think that’s a fair characterization. There is, of course, a desire on the part of the Ministers from less developed nations to assure that their people have access to medicines and vaccines. We have engaged in and will continue to engage in finding solutions to that dilemma. However, there is a separate discussion in our mind related to the sharing of samples. We have a desire to be involved in both conversations. What we object to is linking them. Question: There’s another issue floating around that’s not specifically on the agenda here except through the Executive Board’s report today, I would imagine it would come, related to the publication policy at WHO. As far as I understood the concern arose from a U.S. complaint about a publication. I don’t know if you know the details of this. Secretary Leavitt: I’ll warn you in advance, this is not a subject on which I have sufficient background to be of any value to a story. Question: I’ll ask it in a simple way. Simply, do you have a position on this publication policy issue as it might arise this week? Secretary Leavitt: I’ll be equally as simple. I don’t know. [Laughter]. I seem to have exhausted your curiosity, and I’m very pleased about that. Question: A question about the Taiwan issue which is probably floating around now. Can you make any -- Secretary Leavitt: I think you can expect our position to be identical to what it’s been in the past. Question: This could be your last one if I’m calculating election cycles properly. Is there anything different about the approach in a final year of an administration that captures the -- Secretary Leavitt: Yes, I have a very robust agenda of things I’d like to finish in the next 250 or so days. One finds themselves focusing more and more intensely on fewer and fewer things. That’s the process in which I’m currently engaged. Question: Going back to the medicine issue, [inaudible]. Which countries are the most problematic in terms of imports of [inaudible] medicines, and are you talking to them this week in your bilaterals? Secretary Leavitt: I’m not sure I could give you an authoritative answer on the countries that are of concern. I wanted to be clear that the concern on counterfeit is one part of a much larger issue of product quality and safety. We’ve seen a whole series of issues related to safety where there has been adulteration of medications. We have seen a number of, problems in a number of categories. So our purpose is to focus more on the principles of product safety, not specifically counterfeiting. Question: Do you have a timeframe in mind for this independent certification? Secretary Leavitt: This is not new, meaning independent certification has been part of the world of trade for a long time. ISO 9001, for example, is an example of an independent certification. Rather than to inspect everything themselves, various producers agree that if it meets an independent certification and has the ISO 9001 seal, then they can assume that certain things have occurred. What makes that work is the integrity of that certification process. In the future I believe we will see a substantial number of additional standards develop and that independent certification will become a larger and larger part of the way product safety is conducted. I would like to illustrate what I mean by this. I was in India at the first of the year. I went to a farm, I saw while I was there a wagon with a large number of burlap sacks that had yellow cloth tags sewn to them. The sacks were full of red peppers. After being warned that I should not touch my face after I touched the red peppers, I began to notice the yellow tag and I asked what it was. I couldn’t read the language. They told me it was information about where the product had been picked, the day it had been picked, and other tracing information to the red peppers. I found that fascinating because these red peppers were coming from farms where the farmer had one or two acres. And as anyone knows in India the small farmer is a potent political force. So when I asked the question did the government impose this requirement, I knew in my mind they would not have because it would be an impossible thing for that government, I think, to impose that kind of process on small farmers. They said your instinct is correct, it was the processor that required it. So when I went to the processing plant, they confirmed that they had made the requirement. When I asked why, they said because our customer required it. A large retailer or a series of large retailers in the United States had said to the processor, if you want to have your spices on our shelf you will need to have the product traceable back to the source of origin. The processor went to the small farmers and said to them, we know that this is not something you would naturally want to do but our customer tells us if they are to buy our product they need to have it traceable. We’ll teach you how to do it and help you, and they did. I’ve come to call that the red pepper principle. [Laughter]. I think we’ll see it deployed all over the world because retailers in virtually every developing nation now are saying to producers, if you want your product on our shelf you’ll need to meet standards that are high. When we put it on our shelf, it is our brand that is suddenly at risk. When product safety issue come about, it’s not just the brand of the retailer. Oftentimes it’s the brand of the entire industry or an entire country that is hurt. The lettuce situation I told you about. When we had a breakout of disease based on leafy produce, people just quit buying lettuce. It didn’t matter where it was produced, they were just not going to buy any lettuce. So the lettuce industry got together and said let’s develop a standard and a certification and let’s work with our regulators to make certain it’s based on the best science and that they’ll accept it. That’s happening in many industries. In July I will attend a meeting of 11 large trade associations in the United States who are coming together to work on the development of standards within their industry sector. I think we’ll see the red pepper principle begin to play out in a significant way. What this represents is a change in the basic role of government in imports. In the past, as I’ve indicated, it’s been our job to do all of the inspecting. In the future I believe our job will be to accredit certifiers. If a certifier lacks the integrity to have our accreditation, they will lose their capacity to certify and hence be out of business themselves. So this is a very significant change in the global market and it’s happening because of the maturing of the global market. Question: Sorry, Mr. Secretary, what you’re saying here, you’re making a strong case that the current international system is obsolete and out of touch from the WTO to CODACS to other organizations. That’s strong comments here. Secretary Leavitt: Those were your words. Question: What are your plans to overhaul these organizations, especially the WTO where the technical barriers to trade and SPS have not been open in the Doha negotiations, and what are you looking to do at CODACS and in the WHO? Secretary Leavitt: Let me be clear that you have expanded my comments significantly. Therefore let me say that -- Question: [Inaudible]. [Laughter]. Secretary Leavitt: I believe the marketplace will sanction any organization swiftly and harshly that does not live up to the standards of quality and safety. I believe that will include any organization that does not have a certifying process that matches the expectation of the world. What we’re talking about today is I think a new frontier in human productivity. It’s the ability for nations to work together in a way we haven’t worked together before. It will require a substantial amount of collaboration in the development of common standards, but those standards are clearly in the interest of all of those who desire to have the speed necessary to prosper in a global market. In a global market speed is life, and trust is ultimately what produces speed, and the foundation of trust is transparency. So what we’re seeing is a marketplace beginning to evolve around speed that comes through trust that’s arrived at transparency. Anyone who begins to breach that will not only have regulatory sanctions to deal with, they will have the marketplace who will respond far more quickly, and in many cases more harshly than regulators. Question: You mentioned these voluntary standards will work on speed and transparency and all that. We’ve seen these voluntary standards in the textile and apparel industry where you have consistent violations year after year and despite pledges of good practice by top corporations and good cooperative citizenship. We also see it in super markets, and developing countries at the same time saying rich countries are putting up a new protectionist barrier in multiple standards. Secretary Leavitt: As I indicated earlier, these are complex problems and they look differently depending on your perspective. If you are a regulator guarding the border, they look differently than if you are a trade negotiator or if you are a public health official. That’s why the collaboration I referred to cannot just occur among nations. It has to work between nations and segments of the private sector. It also has to occur between different agencies within the same government. Because in many ways, governments can be siloed. Again, we are inventing new tools here because we have a different circumstance than we’ve had in the past. The global market is changing the way this has to work because if we’re going to have safe products, we can’t inspect everything. We’ve got to find new tools. Question: Could you give us the fair value of total dollar import/export that the United States [inaudible] in 2007? Secretary Leavitt: I cannot. I can tell you that we imported about $2 trillion. Question: Can I come back to this [inaudible] espousing here? Maybe what will the U.S. do in this particular [inaudible]? [Inaudible] saying that countries must start negotiating -- Secretary Leavitt: I am simply raising the issue. There’s a lot of activity going on right now. For example, the United States and China have recently entered into binding memorandums of agreement. One is on food and feed, and the other is on drugs and devices. They’re different agreements. The one on drugs and devices recognizes that while China has a well-defined food safety and food inspection process, that their drug and device regulations are less mature and have need for more capacity. So our agreement with them, the agreement on the food safety side is about working toward the point that China could accredit or could certify the safety of a product and we would accept that, whereas our drug and device agreement calls for us to begin to help them build capacity. We’re engaged in, in June I’ll be in Central America where we’ll be working on a series of steps we can take to build capacity in Central America. I was in Vietnam last month where we had a similar discussion. In India in January. So much of the discussion that I’m raising today is not so much for action directly by WHO. I’ m highlighting this because I believe every economy, whether they’re developed or undeveloped, will have to deal in this new environment with a system that will allow commerce to flow. Question: So coming back to drugs and devices, for example, are you satisfied with what exists in India where you have a multitude of generic drug companies which are producing for the international market? You yourself put all kinds of stops for many of the pharmaceutical products to come into the American market. What is your assessment of what exists in India? Secretary Leavitt: When I was in India the Minister of Health, the Minister of Finance and others and I met and concluded that, they tell me they’re working to develop a Food and Drug Administration like entity. We offered to help them technically as they do so. It became evident to me as well that there is so much activity in India that has an impact on the United States that the United States needs to have a presence in India. We need to have a presence in China. We’re awaiting right now final approval to open an office of our Food and Drug Administration in China. Now other countries will have similar issues. What I’m suggesting here is that we need to work together. Rather than everyone having their own system, if we could agree upon a series of standards, then an independent certifier could validate that those standards are being followed. And if we have confidence in that certifier than multiple countries could accept a similar certification and it would begin to facilitate safe and effective drugs and products being imported and exported from various markets. Question: Would that independent certifier be a public or a private entity? Secretary Leavitt: It could be either. Question: Some countries, even some parties perhaps that would be very, maybe more reticent about outsourcing public health questions, food and product safety. Secretary Leavitt: That’s right. There could be different philosophies that would play out here, but there are some countries that we have great confidence in the integrity of their regulatory system. There are some countries that we might come to the point of saying if that country certifies a facility as safe, that’s good enough for us. There may be countries who would feel that way about certification by a U.S. regulator. We do this right now with beef, for example, and one example that comes to mind is Australia. If an Australian certification is stamped on a piece of beef, it’s the same as the USDA stamping it in the U.S.. Now there is a public certification. On the other hand, ISO 9001 is a non-profit. Many countries as well as private sector organizations accept that as a mark of quality. Question: I was wondering, again trying to test your optimism here, when we’ve seen for instance the United States and Europe cannot agree on a label for hormone treated beef and the whole global community cannot agree on an eco label for 18 years, and you’re coming forward and saying something new’s going to happen and everyone’s going to jump on board, when there’s so much conflict on basic labels. Secretary Leavitt: I do not believe this will happen in a universal way. There will be a different pace for different products and different circumstances. I’m simply proffering the notion that the global market is now operating at a pace that the old system can produce the outcome that I believe consumers and governments will demand. I’m fully aware of the slow pace at which some of this has occurred. However, I think we’ll begin to see that individual circumstances may come together that will put market pressure on them. Question: What would you see as the role of the WHO in this sort of more multilateral effort? Secretary Leavitt: Again, I’m raising this issue because I believe it’s a new frontier of public health conversation. WHO has been a good place where this kind of collaborative discussion can be facilitated. Question: Is U.S. beef safe now? Secretary Leavitt: The Australians say it is. Question: -- put some kind of restrictions on -- Secretary Leavitt: That’s actually outside my portfolio, but I feel confident that Secretary Schaeffer would tell you it is. Question: The other question was, is there envisioned a sort of safeguard against anti-competitive practices? Because any domestic, if there’s any way that influence could be placed on a certifier, for instance, or any other step in the chain, it would be a nice way in somebody’s mind to -- Secretary Leavitt: As I pointed out, these problems look differently from every perspective. That’s why there needs to be collaboration within governments as well as between governments. Thank you. # # # #
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