[Ip-health] Doug Bandow Op-ed: Stealing Drugs, Hurting Poor

[Mike Palmedo]

http://www.koreatimes.co.kr/www/news/opinon/2007/08/137_8710.html

Stealing Drugs, Hurting Poor

By Doug Bandow
Korea Times
08-21-2007

Among the most obvious benefits of modern technology is improved health
care. Some of the greatest medical advances have been new pharmaceuticals.

But medicines don't magically appear. They will not be produced if
prices don't reflect research costs. Unfortunately, some governments,
such as in Thailand, don't care about what medicines patients will need
tomorrow.

HIV/AIDS stopped being a death sentence only because of pharmaceuticals,
beginning with AZT. But with the number of AIDS patients expected to hit
almost ten million by 2010, the need for additional medicines will only
grow.

Of course the poor should be treated. But policymakers must decide
whether to enlist the drug makers as allies or treat them as enemies.
Should governments steal from companies medications developed at great cost?

Last year America's drug and biotech firms devoted $55.2 billion to
pharmaceutical development. Unfortunately, companies discover far more
dry holes than blockbuster drugs, so the prices charged for the few
successful medicines must cover the entire research and development bill.

The cost can be high for Third World nations, but pharmaceutical costs
are not the primary barrier to AIDS treatment. Note Jeremiah Norris of
the Hudson Institute and Philip Stevens of the International Policy
Network, ``Even second-line drug prices are small change compared to the
cost of the medical infrastructure required to administer these
complicated medicines."

Moreover, governments routinely impose tariffs and taxes on life-saving
pharmaceuticals and create burdensome regulatory barriers to their
production and distribution.

Nevertheless, politicians rarely consider the impact of their policies
on drug availability. Even middle-income countries are increasingly
demanding price cuts and issuing compulsory licenses, effectively
stealing patented products.

Most recently, Thailand refused to honor the patent for Kaletra, an AIDS
drug marketed by Abbott, and Plavix, a blood-thinner co-marketed by
Sanofi-Adventis and Bristol-Myers-Squibb. Last November Bangkok seized
Merck's patent for Stocrin, another ARV. The military junta has
threatened to break several more patents.

"We want lower prices," declared Mongkol Na Songkhla, Public Health
Minister in Southeast Asia's second largest economy. But the issue is
not inability to pay.

Observes Paul Howard of the Manhattan Institute, "while the government
cries penury, its defense budget has increased by over 30 percent."
Moreover, Thailand has imposed a range of duties, tariffs, and taxes on
medicines.

Unfortunately, other nations have engaged in the same practice, and not
just for ARVs. Brazil, an even wealthier middle-income nation, has
followed Thailand in seizing Abbott's Kaletra patent and Merck's Stocrin
patent.

Again, the ability to afford drugs is not the issue: Brazil has spent
lavishly on wasteful state enterprises, dabbled in nuclear weapons, and
launched a space program.

In these and other cases, governments of prosperous states are seeking
to win political points by demonizing the companies which produce the
products which offer their peoples hope. The motto seems to be: why pay
for what you can steal?

Yet patents are not the chief barrier to treatment of the poor. The vast
majority of medicines on the World Health Organization's "Essential
Medicines" list have not been patented in any poor nation. Moreover,
many companies discount or donate their drugs in poorer states.

Unfortunately, attacks on drug makers discourage the creation and
distribution of new medicines. Although governments can steal drugs
already on the market or in the pipeline, doing so will discourage
companies from producing new medicines in the future.

No where would the human cost of discouraging R&D be greater than in
treating AIDS. Some 80 anti-AIDS drugs are currently being developed,
including almost 20 vaccines.

Attacking the research drug industry in industrialized states also will
discourage development of a research industry in developing states. In
contrast, stronger IP protection would spur additional investment,
foreign and local, in local firms to research diseases that
disproportionately afflict the local population. Such a transformation
is evident in India.

There is a moral imperative to distribute life-saving products in
impoverished states, but the duty of doing so falls on everyone -
including activists who raise money by attacking the drug makers.

In contrast, prosperous but stingy countries like Thailand and Brazil
should be held accountable by private companies and the U.S. government
for their misbehavior.

Protection of intellectual property is a vital economic and health
issue. Pharmaceuticals save lives. Stealing patents is really stealing
the health future of disadvantaged peoples around the world.

Doug Bandow is Vice President for Policy of Citizen Outreach and the
Cobden Fellow in International Economics at the Institute for Policy
Innovation.

--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu