[Ip-health] THAILAND MINISTER CONSIDERING MORE COMPULSORY LICENSES

[James Packard Love]

INSIDE U.S. TRADE - www.InsideTrade.com - May 25, 2007

THAILAND MINISTER OPEN TO TALKS, CONSIDERING MORE COMPULSORY LICENSES

Thailand Minister of Public Health Mongkol Na Songkhla this week said
he was open to negotiating with U.S. drug companies on the prices of
life-saving drugs, but only to the point that these talks conclude
successfully before the government=92s supplies of the drug in question
dwindle.

He said that he emphasized Thailand=92s respect for the intellectual
property of other countries in a meeting with Pharmaceutical Research
and Manufacturers of America (PhRMA) president Billy Tauzin this
week, but also revealed that he is "seriously considering" issuing
another compulsory license for a cancer drug patented by Novartis, a
Swiss company.

So far, Thailand has issued notifications of three compulsory
licenses for two HIV/AIDS drugs and a heart drug, but the process has
only been completed for one of the HIV/AIDS drugs.

Thailand has not yet begun negotiations with drug companies for
royalty compensation for the compulsory licenses, Mongkol said. The
government has requested that the affected drug companies propose the
amount of compensation they want, but Mongkol said that they have not
yet responded. Instead, the companies have continued to push for
negotiations to avoid the implementation of compulsory licensing, he
said.

Mongkol was in Washington meeting with Tauzin, administration
officials and members of Congress. In a May 22 press conference
following their meeting, Tauzin said he received "some assurance"
that the Thai government understands that invoking compulsory
licenses is a "very rare circumstance and that it should not be the
rule" under the Agreement on Trade-Related Aspects of Intellectual
Property Protection.

Mongkol and Tauzin agreed to meet again, he said, but a PhRMA
representative said they had not yet set a date.

Tauzin said if Thailand keeps issuing compulsory licenses, the U.S.
government should consider whether or not to extend Thailand=92s
benefits under the Generalized System of Preferences (GSP) program.
One of the GSP eligibility criteria is that the administration take
into account whether a country provides "adequate and effective"
protection of intellectual property rights.

Tauzin made that comment when asked whether PhRMA would back a
challenge of Thailand=92s practices in the World Trade Organization.
Separately, a PhRMA spokesman said a WTO challenge is not under
discussion.

Conditions under which a compulsory license may be issued without a
"reasonable period of time" of negotiations with the patent holder
are outlined under TRIPS in Article 31.b, and include cases of
"national emergency or other circumstances of extreme urgency," as
well as public non-commercial use.

U.S. Trade Representative Susan Schwab has carefully avoided charging
that Thailand is violating its WTO obligations in letters discussing
the compulsory licensing issue. She has generally stated that USTR
respects the Thai government=92s right to issue compulsory licenses
according to its own laws and its obligations under the WTO.

Thailand=92s actions have received support from former President Bill
Clinton, and Mongkol was also recently appointed as chairman of the
United Nations AIDS council.

Mongkol said USTR officials had not mentioned withdrawing Thailand=92s
GSP benefits in any of their discussions, but that loss of GSP
benefits was something he worried about.

James Love, director of Knowledge Ecology International (KEI), which
supports Thai compulsory licensing efforts, said that the threat of
revoking GSP benefits is commonly used by politicians to show their
displeasure with foreign policies. But he said it is rare that a
country loses its benefits over not meeting the GSP eligibility
criteria.

The Senate passed a non-binding resolution calling on USTR to use all
the tools at its disposal, including reviews of IPR compliance in
trade preference programs, in dealing with IPR concerns such as the
issuance of compulsory licenses. The resolution was sponsored by
Sens. Jim DeMint (R-SC), Tom Coburn (R-OK) and Mel Martinez (R-FL),
sources said.

It was included in S. 1082, the Food And Drug Administration
Revitalization Act, which passed the Senate on May 9 by a vote of
93-1. One source insisted that many senators were not aware of this
language. Benjamin Krohmal of KEI said the group would work to keep
this language out of the House version of the bill.

In the May 22 press conference, Tauzin said that his main concern is
the precedent that Thailand=92s actions set.

If they were emulated by other countries, "the whole system for
support for IP would begin to crumble," he said.

Earlier this month, Brazil announced a compulsory license for
Efavirenz, one of the HIV/AIDS drugs for which Thailand invoked a
compulsory license (Inside U.S. Trade, April 27).

After Brazil=92s move, the two countries announced they would sign a
cooperation agreement on health issues in August. However, Mongkol
insisted that the announcement was in the works for a long time, and
was not related to the decision on invoking compulsory licenses on
the AIDS drug.

Mongkol explained that Thailand has a two-tier health system, both
public and private, and that customers in the private part of the
system will still pay regular prices even for drugs for which a
compulsory license has been invoked. "We don=92t want them to reduce
the price for the rich group of people and for foreigners," he said,
referring to the millions of Westerners who travel to Thailand
seeking cheaper health care.

He also said that foreign drug companies will not lose any market
share because poor patients in the public section of the health
system have never been able to afford any of the drugs for which
Thailand has sought compulsory licenses. These patients amount to
about 80 percent of the population, Mongkol said.

----------------------------------------------
James Packard Love
Knowledge Ecology International
mailto:james.love@keionline.org
tel. +1.202.332.2670 / U.S. mobile+1.202.361.3040, Geneva mobile
+41.76.413.6584

"If everyone thinks the same: No one thinks." Bill Walton"