[Ip-health] more on IPN and TRIPS

[love@cptech.org]

This is a bit more information on this group, the International Policy
Network.  

http://www.policynetwork.net/IPhealth/rethinking_the_debate_0701_PR.htm

International Policy Network 
16 Ruskin House, Erasmus Street
London SW1
Tel: +44 20 77 99 89 13
Fax: +44 20 77 99 21 37 

Press Release Embargoed 00:01 Tuesday 10 July 2001

Compulsory licensing no solution to health problems in poor countries,
say experts from India, Argentina, Canada and South Africa.
In a collection of papers published today, a group of experts from
around the world contradict the claim that compulsory licensing of
'essential' medicines will benefit the world's poor. They point out that
patents and other forms of intellectual property are an essential
component in economic development. Interfering with intellectual
property by compulsory licensing or price controls will undermine
investments and cause more harm than good. They call instead for
stronger protection of intellectual property globally. 

For more information contact:

Hillary Everist in London: +44 20 7799 8913 hillary@policynetwork.net
Julian Morris: +4420 7788 748 657 julian@policynetwork.net


_____________________ 

Policymakers Summary

Strong Institutions are the Key to Improving Health
Martin Krause, Professor of Economics at the University of Buenos Aires
and a native Argentine, blames the sorry state of his country on the
lack of stable, transparent institutions. 

Abrogation of property rights combined with political corruption and
general lack of legal certainty has undermined investment and led to
slower improvements in the health of Argentinians relative to people in
countries where property rights and the rule of law prevail. 

Dr Krause gives as an example the reputed US$30 million bribe paid to
government officials by one of Argentina's largest generic
pharmaceutical companies in return for being permitted to write the
patent law (thereby enabling it to continue manufacturing some on-patent
drugs without the payment of royalties).

Intellectual Property Rights Help the Poor
Dr Bibek Debroy, Director of Research at the Rajiv Gandhi Institute in
Delhi, points out that rights to property in land provide strong
incentives for owners to improve that land. 

Moreover, property rights enable owners are able to acquire capital (in
the form of mortgages or loans) with which to invest in businesses and
thereby to improve their lot. 

Likewise, rights to intellectual property provide both incentives to
invention and creation, and also enable people to acquire the capital to
develop products based on their IP. As a result, IP has become one of
the building blocks of economic development.

Whilst it is important that individual countries provide strong
protection for intellectual property, in a globalised world it is also
important that countries recognise the products of intellectual property
developed elsewhere. 


Without such mutual recognition, pirates operating in countries without
strong IP protection will prevent IP owners from benefiting fully from
their investments and thereby will undermine the incentives to develop
new inventions and creations.

International treaties such as the Agreement on Trade Related Aspects of
Intellectual Property Rights (TRIPS) are a way of preventing such
problems.

Dr Debroy argues that it is in the best interest of poor countries to
comply with the requirements of TRIPS and to limit the use of compulsory
licensing. 

The introduction of product patents may adversely affect some powerful
vested interests (especially generic pharmaceutical manufacturers) and
thereby will have an economic and political cost in the short term.

However, the benefits of IP protection in the medium to long term - in
the form of increased foreign direct investment, technology transfer,
and local product development - far outweigh these transitional costs. 


Price Controls Undermine Investments and Harm the Poor
Owen Lippert, research fellow at the Fraser Institute in Vancouver,
Canada, and adjunct scholar at the Instituto Libertad y Desarrollo in
Santiago, Chile, shows that the World Health Organisation proposal to
impose price controls on pharmaceuticals would be counterproductive. 

If enacted the WHO's proposal would undermine investments in
pharmaceutical research, thereby ensuring that fewer new drugs were
produced, especially in the class of 'essential medicines'. 

A far better way to ensure that pharmaceuticals are supplied to the
world's poorest would be to deregulate the pharmaceutical industry,
enhance patent protection for pharmaceuticals, and enable pharmaceutical
companies to price discriminate.


AIDS is not the only - or even the most important - disease of the poor
Dr Roger Bate and Richard Tren, co-Directors of Africa Fighting Malaria,
a healthcare charity based in South Africa, offer a critique of the
current obsession with HIV/AIDS, pointing out that globally other
diseases are more worthy of attention. 

Many of these other diseases, including TB, diarrhoea, malaria and
hepatitis, are not only treatable but also curable. By contrast, current
pharmaceutical treatments for HIV - whilst making a valuable
contribution to improving quality of life and in some cases reducing the
likelihood of transfer from mother to child - ultimately are not cures
for the disease.

If international health policy were to focus instead on these other
diseases, it would bring a much more immediate improvement to the health
of the world's poor. 

Meanwhile, if these and other diseases (including AIDS) are to be
eradicated in the longer term, then there must also be a commitment to
enabling companies to profit from the production and sale of
pharmaceuticals and vaccines. 

This means, at least, ensuring that product patents are enforced across
the world and limiting the extent of compulsory licensing.


If it Ain't Broke Don't Fix It
All first year undergraduate economists learn about the perverse effects
of imposing price controls on housing. The short-term effect is to
reduce the costs to some people. But the long-term effects are to
discourage investments in maintenance of the housing stock and to
discourage the construction of new properties. As a result, there is
insufficient housing to meet demand. 

In other words, price controls benefit the few in the short-term at the
expense of the many in the long-term. Precisely the same effects are at
work when price restrictions are imposed in other markets.

Whilst government officials in poor countries may be under pressure to
delay implementation of TRIPS, they should be aware that the short-term
advantages of such a decision come at a long-term cost. 

In particular their countries are likely to experience lower levels of
foreign investment, slower technology transfer, less local investment in
research and development and delays in the development of drugs for the
diseases that most adversely affect their people. 

Poor countries will not eradicate diseases through the compulsory
licensing of 'essential medicines'. In fact the opposite is more likely
because of the negative signal that such a decision would send to
companies contemplating investment in knowledge-based industries. 

It would be a tragedy if long-term economic development and consequent
improvements in the health of the poor were to be undermined by
short-sighted policies aimed at placating narrow vested interests.



http://www.policynetwork.net/IPhealth/




 TRIPS and Healthcare: 
Rethinking the Debate

July 2001 

Press release
____

Introduction and Summary -- Julian Morris, International Policy Network
____ 

Malaria and Patents -- Roger Bate and Richard Tren, Africa Fighting
Malaria 
____

The Compulsory Licensing Anomaly -- Bibek Debroy, Rajiv Ghandi Institute
____

Qualifying for the World Cup -- Martin Krause, Universidad de Buenos
Aires
____

A sceptic's view of the TRIPS and essential medicines debate -- Owen
Lippert, Fraser Institute/Instituto de Libertad y Desarrollo


Summary 

All members of the World Trade Organisation are bound by TRIPS, which
creates minimum standards for patents, copyright and other forms of
intellectual property. Crucially, TRIPS requires that by 1 January 2006
all countries must have in place systems for patenting products,
including pharmaceutical products.

Whilst government officials in poor countries may be under pressure to
delay implementation of TRIPS, they should be aware that the short-term
advantages of such a decision (cheaper products especially
pharmaceuticals) come at a long-term cost. In particular their countries
are likely to experience lower levels of foreign investment, slower
technology transfer, less local investment in research and development
and delays in the development of drugs for the diseases that most
adversely affect their people. 

Poor countries will not eradicate diseases by compulsory licensing
certain pharmaceuticals. In fact the opposite is more likely because of
the negative signal that such a decision would send to companies
contemplating investment in knowledge-based industries. It would be a
tragedy if long-term economic development and consequent improvements in
the health of the poor were to be undermined by short-sighted policies
aimed at placating narrow vested interests.


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