[Ip-health] Wall Street Journal Editorial: Bangkok's Drug War Goes Global

[Thiru Balasubramaniam]

Bangkok's Drug War Goes Global

March 7, 2007

Thailand's seizures of foreign drug patents earlier this year elicited
cheers from the usual crowd of anti-patent hooligans. That's not
serious, per se. But by letting Bangkok's actions go unchallenged --
and in some official quarters, by supporting them -- a dangerous
precedent now risks being set.

If you don't believe us, consider the proposals recently floated at the
World Health Organization. In its January executive board meeting,
Thailand's representative, Dr. Suwit Wibulpolprasert, declared that if
an influenza pandemic hit, he'd counsel Bangkok to hold Western
tourists hostage until those countries gave Thailand the necessary
vaccines. The Kenyan delegation said it would present a proposal to its
health ministry to seize Novartis's patent on Coartem, a malaria drug.
And Bolivia chipped in that member states have to "put people over
profit."

This kind of rhetoric is dangerous. Drug companies spend billions of
dollars to develop, test and deliver drugs, as well as educate
physicians on how to use them. There's no reason for Big Pharma to sink
money into an expensive enterprise unless it is duly rewarded for it.
That's why no serious government has contemplated using compulsory
licensing, even if it's allowed to do so under WTO rules. Thailand and
NGOs cite, among other countries, Mozambique, Zimbabwe and Cameroon as
anti-patent precedents -- hardly the world's economic role models.

In seizing the patents for HIV/AIDS and heart medication, Thailand is
exploiting vague language in the WTO's Agreement on Trade-Related
Aspects of Intellectual Property Rights, or TRIPs, which sets down
rules under which countries can seize patents. Article 31 provides for
compulsory licensing in case of "national emergency" or for "public
non-commercial use." Thailand clearly doesn't have an HIV/AIDS epidemic
and heart disease isn't a "national emergency." So Bangkok claims the
latter case, which is hard to rebut. What does "public non-commercial
use" mean, anyway?

It's also unclear that Thailand's motives are purely altruistic. The
national health security board that issued the compulsory licenses is
under the Ministry of Public Health and allows outside NGOs on the
board. Thailand's military government claims it can't afford to pay for
rising drug costs, but at the same time promises free drugs for the
poor. Yet it hasn't done a thing to address the taxes levied on drug
imports, nor the often double-digit markups on drugs as they wend their
way through Thailand's domestic delivery system to patients. It's also
unclear what role Bangkok envisions for the Government Pharmaceutical
Organization, Thailand's state-owned, for-profit monopoly. Could
Thailand be considering seizing drug patents, producing pills at home,
and turning GPO into a regional pharmaceutical provider?

Dr. Suwit and the Minister for Public Health, Dr. Mongkol na Songkhla,
have friends in high places. Peter Piot, the head of the United
Nation's joint program on HIV/AIDS, wrote in a Dec. 26 letter to the
Public Health Minister that Bangkok's decision to seize Merck's
HIV/AIDS drug patent was "a good example" of the country's commitment
to "provide access" to antiretrovirals and lower the cost of the drugs.
Margaret Chan, whom these pages praised in January for criticizing
Thailand's IP abuse, retracted her statement in a conciliatory letter
to the Thai government shortly thereafter.

"I deeply regret that my comments... may have caused embarrassment to
the government of Thailand," she wrote. "They should not be taken as a
criticism of the decision of the Royal Thai government to issue
compulsory licenses, which is entirely the prerogative of the
government, and fully in line with the TRIPs agreement."

Well, maybe. We're not lawyers, but WTO rules say patents can't be
seized without "efforts to obtain authorization from the right holder
on reasonable commercial terms and conditions" and only when "such
efforts have not been successful within a reasonable period of time."
Thailand did neither. It didn't consult with the drug companies before
it seized the licenses in January, nor has it done so since then.

The irony is that firms like Merck don't make money on the seized
patents in Thailand. In a January 2005 letter addressed to the Thai
government, Merck's local subsidiary explained that the company sells
Stocrin and Crixivan, two HIV/AIDS drugs, at a no-profit price in
Thailand, "inclusive of custom duties, import duty, VAT, and...delivery
costs." Sounds like Bangkok's levies, not Merck's profit motive, are
helping push up drug prices.

The WHO's executive board next meets in May. Unless Director-General
Chan and other officials start publicly supporting intellectual
property rights, there's a good chance that Thailand's actions will be
replicated elsewhere. That's not only bad news for pharmaceutical
companies, but for everyone else who cares about drug innovation and
public health.

URL for this article:
http://online.wsj.com/article/SB117322181443628799.html

---------------------------------
Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@keionline.org