MSF Summary of Geneva Meeting on Compulsory licensing of essential medicial technologies

[James Love <love@cptech.org>]

This summary of the March 25-27, 1999 Geneva meeting on 
compulsory licensing of essential medical technologies was 
prepared by Nathan Ford and Daniel Berman of MSF.


------------------------------
AIDS AND ESSENTIAL MEDICINES AND COMPULSORY LICENSING
A meeting sponsored by Médecins Sans Frontières, Health Action
International and Consumer Project on Technology

"As a public health worker in the developing world, I feel like a
child being told by the developed world 'do as we say and not as we
do.'"

Professor Krisantha Weerasuriya University of Colombo, Sri Lanka

On March 26, 1999 more than 120 delegates from 30 countries met at the
Palais des Nations in Geneva to examine compulsory licensing as one
potential strategy to confront the growing crisis of access to
essential medicines in the developing world.  This crisis leaves
millions suffering and vulnerable to curable or treatable disease.

The HIV/AIDS pandemic illustrates the magnitude of the problem. Twenty
six of the estimated 33 million people infected with HIV globally live
in Sub-Saharan Africa and have virtually no access to antiretrovirals.
 Their cost puts them out of reach to all but a small fraction of
people in Africa.  The situation is similar is South East Asia where
at Bamrasnaradura hospital in Bangkok only 20 out of 2000 patients who
seek treatment each month can afford the triple drug cocktails that
have become standard of care in developed countries.

Medicines for other life-threatening diseases such as tuberculosis,
malaria, and meningitis are equally out of reach to millions of
inhabitants of the developing world. In the case of TB, most of the
100,000 people suffering from multi-drug resistant strains are unable
to afford the new standard combination treatment which is priced at
approximately $15,000 per course.  Both local and NGO (non-government
organisation) physicians work daily with the knowledge that high drug
prices mean that a significant portion of their patients are dying
unnecessarily.

At the Geneva meeting, NGO, national government, international
organisations, and industry delegates looked at the practical
considerations of using compulsory licensing, which allow legal
suppression of drug patents, as a means of making drugs more
affordable in poor countries.  Compulsory licensing, a feature of the
new TRIPS Agreement  (Trade-Related Aspects of Intellectual Property,
a part of  the World Trade Organisation agreements) has been
historically used by countries to serve the greater good of society by
restricting the monopoly rights of patent holders.

"This initiative is neither in conflict with TRIPS, the cornerstone of
the WTO's provisions on intellectual property, nor any other
multilateral agreement on trade or intellectual property" said James
Love of the Consumer Project on Technology. "We are urging countries
to use provisions in TRIPS for compulsory licensing so that people in
developing countries can have access to modern essential treatments."


Lower prices in developing countries would not be a serious threat to
research and development funding because they account for a small
percentage of overall pharmaceutical sales. Africa, for example,
accounts for only 1.3 percent of the global drug market.
Compulsory licensing finds its legal basis in Article 31 of the TRIPS
agreement. The agreement says that Member States may "use the subject
of a patent without the authorisation of a right holder, including use
by the government or third parties authorised by the government" when
justified by the public interest.  Article 31 also says that "the
right holder shall be paid adequate remuneration...taking into account
the economic value of the authorisation."

Although, according to a statement released before the meeting, the US
government "does not generally support the compulsory license of
patents...and regards compulsory licensing as unnecessary" it has
liberally applied this tool in its own domestic market in hundreds of
cases.  Licenses on patents have been granted in diverse fields
including biotechnology, pharmaceuticals, aerospace, military
technology, air pollution, computers, and nuclear energy. The US has
traditionally used compulsory licenses to counteract  anti-competitive
practices and a significant number have been granted royalty-free. In
addition, many have been authorised for non-commercial government use.

"We acknowledge that our position is more restrictive than the TRIPS
agreement but we see TRIPS as a minimum standard of protection, " said
 Lois Boland of the US Patent and Trademarks Office.

Delegates at the Geneva conference condemned the US's use of bilateral
pressure tactics to implement its policy of pushing for domestic laws
that forbid the use of  compulsory licenses.  The case of Thailand
clearly demonstrates the US's multifaceted approach to protecting the
patents of its national pharmaceutical manufacturers.

Conference presenters from Thailand described pressure tactics that
the US government has used to ensure that Thailand would not produce
or import low cost AIDS drugs or any other life-saving patented drugs.
  In 1993, under US urging, Thailand adopted a law banning parallel
imports, which allow the importation of drugs to one country from
another where the patent holder sells the identical drug at a lower
price.  Parallel imports are widely used by many countries including
the United Kingdom and the Netherlands to bring down the cost of drug
therapies.

Trade pressure against Thailand was most recently stimulated by the
government's attempt to begin producing the anti-HIV drug ddI.  The
government was planning to offer people with AIDS at least one
low-tech double therapy combination (AZT/ddI) at an affordable price.
Currently, ddI is exclusively marketed by Bristol-Myers Squibb at a
monthly cost of $166.  Since July, 1997 the daily minimum wage in
Thailand has been frozen at $4.50.

Thailand dropped its ddI plan when it was threatened with trade
sanctions on some of its key exports.  This threat came at a time when
the Thai economy was reeling from the widespread South East Asian
financial crisis. Thai physicians and patients were particularly
outraged when they discovered that ddI was invented by the US
government and is licensed on an exclusive basis to the US drug
manufacturer Bristol-Myers Squibb.

In addition, last summer the US stimulated a Thai legislative bill,
expected to be signed into law soon, that severely restricts the use
of compulsory licenses.  Under the urging of US trade officials,
Thailand  will implement a law that is much more restrictive than the
rules set out in the TRIPS agreement, the internationally accepted
standard.

Unlike the current situation in Thailand, the Indian drug industry is
a good example of  what happens when companies are given the authority
to produce drugs for the local market without paying daunting
licensing fees.  Under TRIPS, compulsory licenses could be granted to
produce essential medicines to treat life-threatening diseases,
mimicking the currently unregulated system in India.  Currently,
Lariam, a treatment for Malaria costs $37 in the US and $4 in India
while the AIDS treatment AZT cost $239 per month in the US and $48 in
India.

Michael Scholtz, the executive director of the Health Technology and
Drug Cluster at WHO (World Health Organisation) pledged his support to
developing countries. "WHO respects the importance of patents and
understands their role in both the developed and developing countries.
 However, we now have a mandate to consider the public health
implications of implementing the TRIPS agreement," said Scholtz.

The organisers agreed that WHO should take a lead role in assisting
countries in analysing the pharmaceutical and public health
implications of WTO agreements. "Developing countries that have
applied TRIPS have not made full use of the flexibility of
international trade law either because of lack of knowledge of their
rights or because of pressure from the west" according to Bas van der
Heide of Health Action International.

Conference presenters advised delegates from developing countries to
inquire about the status of their domestic law provisions for
compulsory licenses and parallel imports and lobby to change laws if
they are more restrictive than the TRIPS agreement demands.  They also
pointed out that if domestic governments request it, technical
assistance to become TRIPS compliant is available from WIPO (World
Intellectual Property Organisation).

With the support of WHO, WTO, WIPO and NGOs, conference delegates plan
to return to their countries and demand that their national
governments use existing and legal means to increase the supply of
affordable essential drugs.  If price is a criteria for inclusion on
national essential medicines lists, then the international community
must find a way to bring down the cost of key drugs in developing
countries.

"Ultimately, the right of a country to safeguard the health of its
citizens partly depends on access to essential medicines and we must
focus on improving this access," said Bernard Pecoul of Médecins Sans
Frontières.

Medical professionals in the developing world refuse to accept the
fact that their patients are dying because multinational
pharmaceutical companies, with the help of their national governments,
are distorting international trade law to keep the price of essential
medicines high in developing countries.

The Geneva meeting was made possible by the generous support of the
Rockefeller Foundation.

Note: For more information on the consequences of the WTO and TRIPS
agreements on access to medicines see the WHO publication:
Globalization and Access to Drugs, Perspectives on the WTO/TRIPS
Agreement, Health Economics and Drugs DAP
Series No. 7 revised.  More information on Compulsory Licensing can be
found at www.cptech.org/march99-cl/


-- 
James Love, Director, Consumer Project on Technology
I can be reached at love@cptech.org, by telephone 202.387.8030,
by fax at 202.234.5176. CPT web page is http://www.cptech.org