[Ip-health] Opinion: Health before patents - at any cost

[Sangeeta]

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SUNS #6154 Monday 4 December 2006
Opinion: Health before patents - at any cost
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Beijing, 1 Dec (Chee Yoke Ling*) -- World AIDS Day (1 December) is a time t=
o
review our achievements fighting this disease and to plan for the future.
UNAIDS estimates that 39.5 million people were living with HIV in 2006 and
more than 8,000 people with AIDS die each day.
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Lack of medicines is a major factor. Patented versions of AIDS medicines
used to cost US$15,000 per patient, per year. Generic competition has
reduced those prices to $132 per patient per year.
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In Asia alone, when faced with the high prices of patented AIDS medicines,
Malaysia, Indonesia and now Thailand have issued compulsory licences to mak=
e
or import the more affordable, equally effective, generic versions.
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Unfortunately, US free trade agreements (FTAs) will make medicines for all
diseases more expensive again, in the name of doubtful short-term trade
gains.
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According to the World Health Organisation's (WHO) economic model, the full
effect of the stronger intellectual property (IP) protection required by th=
e
United States in all its FTAs will not be felt for more than 15 years.
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This means that even the Canadians and Mexicans who have the oldest USFTAs
with some of these provisions, have not yet experienced the full increase i=
n
medicine prices that the WHO model predicts.
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Peru's ministry of health forecasts that just one of the six provisions in
USFTAs that raises medicine prices (data exclusivity) will more than double
their medicine spending.
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Canadian estimates show that if data exclusivity had been in force in Canad=
a
over the last five years, it would have cost an additional $600 million for
prescription medicines alone.
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Colombia predicted its generic medicine industry would lose 71% of its
market share.
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Many experts, including the United Nations Special Rapporteur on the Right
to Health are openly concerned about the way that intellectual property and
other provisions of USFTAs can make medicines unaffordable.
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A WHO Commission on public health recommends that these types of provisions
be avoided. Ten Latin American ministers of health and the African Union's
ministers of health and ministers of trade have committed to this.
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Who benefits from these USFTA provisions? Malaysia is currently negotiating
a USFTA. As 98% of patents in Malaysia are foreign-owned, stronger IP
protection would mean that more royalties will be paid to foreign
multinational companies.
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This would include US pharmaceutical companies such as Pfizer, Merck and El=
i
Lilly, which have publicly stated that they want these stronger IP
provisions.
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They are also on the US Trade Representative's (USTR) advisory committees
that, according to the US government, serve to ensure that US trade policy
and trade negotiation objectives adequately reflect US commercial and
economic interests. These US pharmaceutical companies and their supporters
argue that stronger IP protection will increase innovation and foreign
direct investment (FDI).
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We all want new, useful medicines to be developed. But it is not clear that
stronger IP protection will deliver.
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Pharmaceutical companies prioritise the development of medicines for people
who can afford to pay for them.
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Stronger IP protection does not address this market failure. This is why of
the 1,223 new drugs marketed worldwide between 1975 and 1996, only 13 were
developed to treat tropical diseases which mostly afflict the poor and only
four were the direct result of pharmaceutical industry research.
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Secondly, there is data showing that stronger IP protection has not
increased innovation, such as in Europe.
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Thirdly, innovation occurs even without IP protection, as Asia has proven
with its rich history of traditional medicines developed over the centuries=
,
long before anyone worried about intellectual property.
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As for more FDI, studies show there is no robust theoretical link between
stronger patent protection and new investment in manufacturing. There is
also no empirical evidence that it leads to more FDI.
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In fact, when Malaysian academics questioned 11 foreign pharmaceutical
manufacturers, 97% said that Malaysian patent protection was strong but
foreign investment into the pharmaceutical industry has still been
negligible.
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However, stronger IP protection may scare off generic manufacturers who are
important investors in Malaysia.
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Studies by the UN Development Programme, the UN Conference on Trade and
Development and the World Bank have found that stronger investor protection
in an FTA has not been proven to increase FDI.
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As for trade, Thailand and Malaysia are currently both in trade surplus to
the United States (by $12 billion and $23 billion, respectively).
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A US free trade agreement typically requires zero tax on American exports.
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However, current US legislation does not allow the USTR to offer cuts on US
taxes on Malaysian or Thai exports by much if they sign USFTAs.
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The benefits of a USFTA for developing countries are highly questionable.
But in one area at least the loss will be clear. In the past year 960,000
more Asians were newly infected with HIV.
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UNAIDS reports that the number of people receiving AIDS drugs more than
tripled since 2003, but this is still only about 16% of the total number of
people needing treatment in Asia.
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Only Thailand has succeeded in providing treatment to at least 50% of peopl=
e
needing it. A USFTA will be a setback.
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We, therefore, strongly welcome Thailand's recent decision to produce more
generic AIDS medicines under compulsory licence.
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More countries should move in this direction and avoid FTAs that compromise
public health.
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(* The writer is legal adviser of Third World Network. This opinion article
was written for and published in the Bangkok Post on 1 December to coincide
with World AIDS Day.) +


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