[Ip-health] Salon: Why Thailand isn't smiling at Big Pharma

[Thiru Balasubramaniam]

http://www.salon.com/tech/htww/2006/11/29/thailand_pharma/


Why Thailand isn't smiling at Big Pharma

Free trade and AIDS in a post-coup, post-midterm election world.

Andrew Leonard (How the World Works)

Nov. 29, 2006 | Thailand's Ministry of Public Health indicated today
that it would grant the application of the Government Pharmaceutical
Organization for a compulsory license to manufacture a generic version
of the AIDS retroviral drug Efavirenz. (Thanks to the Consumer Project
on Technology for the link.)

The reason: AIDS sufferers in Thailand are beginning to demonstrate
resistance to the existing government-manufactured AIDS drug GPO-vir,
but can't afford the high priced Efavirenz, marketed by Bristol-Myers
Squibb under the name Sustiva. So in the interest of public health,
Thailand plans to take advantage of the right granted to it by the
World Trade Organization's TRIPs (Trade-Related Aspects of Intellectual
Property) agreement to break Bristol's patent.

Bristol-Myers Squibb and the rest of Big Pharma would rather Thailand
(or any other nation) did not exercise its TRIPs rights. They have thus
lobbied long and hard for the U.S. to incorporate increased protections
for their intellectual property that go above and beyond TRIPs in the
bilateral free trade agreements that the U.S. has been industriously
negotiating with other nations in recent years. Thailand, partially as
a result of its status as a popular stop on the global sex tour
circuit, has more than its share of AIDS sufferers, which may explain
why Big Pharma's demands have been a major sticking point in a
bilateral free trade agreement that the U.S. and Thailand have been
negotiating since June 2004. Public health advocates (including the
country representative in Thailand of the World Health Organization,
who was later transferred after publicly criticizing the proposed FTA)
have long argued that signing such an agreement would hurt the ability
of Thailand to properly care for its citizens.

How, specifically, would this happen? If you look at other FTA
agreements that the U.S. has recently concluded, notably with Australia
and Singapore, there are three main ways that the U.S. attempts to
restrict the ability of a nation to issue a compulsory license.

1) TRIPs allows any nation to declare a compulsory license without
declaring a reason. The Singaporean and Australian agreements limit the
use of such licenses to antitrust remedies, public non-commercial use,
or national emergencies.

2) For a generic drug manufacturer to enter a given market with a
particular drug, it must receive regulatory approval to market that
drug. Recent bilateral FTAs negotiated by the U.S. require that the
patent holder give consent for marketing approval.

3) In order to get marketing approval a generic manufacturer must also
present test data proving its safety and effectiveness. Typically this
is done by using the test data already amassed for the original
patented drug. TRIPs forbids this only in cases of "unfair commercial
use." Bilateral FTAs require varying periods of test data exclusivity,
no matter what the circumstances.

Taken together, these provisions are carefully designed to hamper a
country like Thailand from doing exactly what it announced it would do
today.

Compulsory licenses, Big Pharma and TRIPs frequently pop up in the
pages of How the World Works. But in the context of post-coup Thailand
and the post-midterm-election United States, the topic takes on newly
relevant dimensions. The ousted prime minister of Thailand, Thaksin
Shinawatra, was widely seen as a gung-ho free trader who was pushing
Thailand too far too fast in the direction specified by global
corporate interests. Even before the coup, negotiations on the FTA had
reached a standstill, a casualty of Thailand's ongoing political
crisis. (Which makes the post-coup announcement by the U.S. that it
would not resume negotations until a democratically elected government
took power something of a face-saving gesture.)

In the United States, advocates of free trade -- even those who will
concede that bilateral agreements are less desirable than comprehensive
multilateral agreements worked out in the context of the WTO -- are
distraught because they see the Democratic takeover of Congress as
spelling doom for future FTAs. As they wring their hands and invoke the
holy aegis of Ricardo, they have been wont to call Democrats
"protectionist."

But a close look at what really goes in the bilateral FTA sausage
factory makes the name-calling a little suspect. One way to look at
these FTAs is to see them as devices by which the U.S. secures
increased protection for pharmaceutical industry products in exchange
for granting improved access to U.S. markets for manufactured and
agricultural goods. This is hardly some kind of perfect world of "free
trade" where tariffs and borders disappear and everyone lives happily
ever after off of their comparative advantage.

Is it really protectionist for Democrats to say, let's reexamine this
equation, and reevaluate the question of which sector of the U.S.
economy should benefit from how trade agreements are negotiated?
Should, for example, the pharmaceutical industry be gaining a global
advantage at the expense of concessions that may make life for
manufacturing workers in the U.S. more difficult? Isn't what the U.S.
is doing protecting the pharmaceutical industry from competition?

Unfortunately, Democrats bashing globalization on the campaign trail
rarely delve into the nitty-gritty details of FTA agreements in order
to make a case for their opposition to how trade is currently
practiced. If they did, and laid out carefully how the tradeoffs
benefit some American industries while hurting others, while
simultaneously having a negative impact on public health in the
developing world, it might get a little more difficult to bash them as
protectionist.

-- Andrew Leonard

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Thiru Balasubramaniam
Geneva Representative
CPTech
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@cptech.org