[Ip-health] Patent Laws:Developing Countries suffer the most

[Ram]

PATENT LAWS Developing Countries Suffer The Most

By DIPAK BASU | The Statesman

The Trips (Trade Related Intellectual Property) agreement requires
that by 1 January, 2005, developing countries like India must become
compliant =E2=80=94 particularly by allowing product patents rather than ju=
st
process patents under the current regime. Fears have also been
expressed on the impact the amendments will have on the India's
booming software and bio-technology industry that has traditionally
been protected under copyright laws, because fair use provisions in
the copyright law that permits reverse engineering is not permitted
under the patent law. The worse affected would be the patients in
India and in all poor countries which depend on the cheap generic
drugs manufactured in countries like India, Brazil, and South Africa.


Flexibilities
The India government is going far beyond what is required under WTO
rules. The patent amendment Bill proposes to extend patent protection
to new uses of known drugs =E2=80=94 a level of protection not required by =
the
TRIPS agreement, and one that could allow foreign pharmaceutical
companies to maintain monopoly control over a drug long after their
original patent expires. In addition, the new legislation proposed by
the Indian government and some of its elements as "TRIPS-plan clauses"
do not fully take advantage of flexibilities available under TRIPS in
order to safeguard accessibility and availability of drugs and
medicines.
Most notably, the Bill does not fully incorporate the 30 August, 2004
decision of the TRIPS Council on aiding countries without
manufacturing capacity to access medicines, since it makes the
granting of compulsory licences for export purposes contingent upon
the existence of a compulsory licence for importation in the
purchasing country. This could make it impossible for the less
developed countries (LDC) to import drugs from India. Since LDCs do
not have to provide patents on pharmaceutical products until 2016,
many of them do not have patent law institutions capable of issuing
compulsory licenses. The process India is going through is likely to
be replicated in a number of developing countries that have to bring
their patent legislation into compliance with the WTO TRIPS agreement.
Patent law in India is regulated by the Patents Act, 1970 (39 of 1970)
and the Patents Rules, 1972. The Indian Parliament has ratified
drastic changes to the Patents Act, 1970. These changes have become
effective from 1 January 1995. The changes are in line with the
commitments made by India before WTO. India is committed to harmonise
its intellectual property laws with the members of WTO. The WTO
agreement enables a signatory to avail of a transition period of ten
years to implement its commitments. India has availed off the full
transition period of ten years up to 2005 for formulating and amending
its Patent Laws.
The 1994 WTO agreement on TRIPS established patent protection for a
minimum of 20 years in all fields of technology, including medicine.
Developing countries were given until 2000, and LDCs till 2006 to
bring their national legislation into line with WTO rules. All
countries have to offer protection on drugs for which patents were
filed after 1995.
WTO rules are complex and appear to permit some exceptions, with
countries able to "adopt measures necessary to protect public health
and nutrition". This is supposed to allow the granting of "compulsory
licenses" for the production of vital drugs. It is also supposed to
allow "parallel importing" of patented drugs, i.e. their purchase from
whoever sells them the cheapest.
The difficulty is being able to utilise the rules permitting capable
of producing on a scale to bring down drug prices. They are only
allowed to import cheap "generic" drug (copies of expensive drugs
patented by Western companies), usually produced in countries such as
India, Brazil, and Thailand, if a compulsory license has been issued
in the exporting country. Even in this case, the TRIPS agreement
specifies that a compulsory license can only be issued for
"predominantly" domestic needs.


Unaffordable
What is more, compulsory licensing can only be obtained after efforts
have been made to obtain a regular license from the patent holder on
commercial terms, and if the patent holder is compensated. The result
of the WTO rules effectively means, "governments will no longer be
permitted to allow local companies to produce, market, and export
copies of patented drugs".
It is important to examine the adverse health impact laws are having
on developing countries. In the drive to maintain and increase their
profits, Western drug companies are putting vital medicines beyond the
reach of a growing and vast proportion of the world's population. It
is possible to refute the argument used by defenders of the WTO
agreement that the impact will be minimal in the Third World since
most diseases there are long-standing and can be treated using
un-patented drugs. Firstly, there are millions of AIDS sufferers in
Africa and the developing countries, with no possibility of affording
the triple combination AIDS drugs that are covered by patents.
Secondly, there is a vast increase of new strains of diseases,
including malaria and tuberculosis, which can only be treated by
recently developed patented drugs. A World Health Organisation study
has shown that in the case of pneumonia, which kills 3.5 million
people annually, medications that were formerly effective now fail in
70 per cent of cases because of drug resistance. A new range of
antibiotics is being patented that will be unaffordable in developing
countries.
To make sure that the poorer countries do not find ways of using
compulsory licensing or parallel importing to avoid WTO rules, the
major pharmaceutical companies are using "armies of lawyers" to press
their case. The US government is acting as the main defender of the
pharmaceutical companies, with representatives of the industry playing
a major role in the committees that develop its trade policy.
Recently, the US government made a formal complaint to the WTO
concerning Brazil's new patent legislation, alleging that it did not
comply with TRIPS rules.
Introduced in 1988, the "Special 301" provision of the US government
is used to impose trade sanctions on countries to enforce compliance
with WTO rules. India, the Dominican Republic, Argentina, Vietnam and
Thailand all face Special 301 sanctions by the USA over patenting
rules for medicines.
Another argument used by defenders of the drug companies is that the
cost of medicines is only one aspect of health care, and that the
provision of drugs such as antiretroviral used to treat AIDS would be
of no use without an advanced health infrastructure to back them up.
However, a much higher proportion of the small amount governments
spend on health care goes to pay for pharmaceutical drugs: over
one-fifth of public health spending in Mali, Tanzania, Vietnam and
Colombia, for example. Therefore, the high cost of drugs is at least
in part responsible for limiting the provision of public healthcare.


Insurance
In the advanced capitalist countries, most health cares are provided
from public funds or by insurance schemes. For example, in Britain,
annual spending on health per person is $1,193 per annum, of which
only three per cent is paid personally. In contrast, spending per
person in India is $23 per annum, with 84 per cent being paid by
private households, of which the cost of drugs is the highest item.
Thus the increase in drug prices being pushed through under TRIPS will
intensify the division between rich and poor in relation to health
provisions on a world scale. Already some two billion people of the
world lack access to basic health care and 11 million die each year
from preventable diseases.
The attempt to restrict the range of diseases that developing
countries can claim are part of a public health problem was introduced
into the WTO negotiations by the USA, supported by Japan. Amazingly,
it is argued that diseases such as cancer, heart complaints, or asthma
are not a public health problem in third world countries.
Aside from drugs for AIDS, tuberculosis and malaria, the USA only
agreed to consider cheap drugs for tropical diseases that affect the
poorest countries. They also demanded that medicines only were
considered so that vaccines, diagnostic tests, and monitoring tests
could not be provided cheaply under WTO rules. Clearly, however, the
companies producing generic drugs could not survive if their profits
were to be made only on drugs for diseases mainly affecting the
poorest countries.
It is unfortunate that both the BJP and the Congress looks at the
interests of multinational companies and their Indian collaborators
and ignore the vital interests of the people. The WTO negotiations
have demonstrated that India will protest first, then implement
everything even going beyond what is demanded by the developed
countries. Since 1995, we have seen this process of surrender and lack
of care and concern for the people.

The author is Professor in International Economics, Nagasaki University, Ja=
pan.