[Ip-health] McClatchy newswire: Thailand's ill see benefits from 'compulsory licensing'

[Sarah Rimmington]

http://www.bellinghamherald.com/317/story/371063.html


April 4, 2008
ROBERT WEISSMAN: Thailand's ill see benefits from 'compulsory licensing'
McClatchy-Tribune News Service


The rationale for Sally Pipes' fanciful opinion piece ("Thailand's
misuse of `compulsory licensing' allowed corrupt officials to steal
millions," March 21) would have been a lot clearer to readers if she had
revealed that her think tank is funded by the pharmaceutical industry.
Her organization, the Pacific Research Institute, has received more than
$1 million from Eli Lilly since 2000. Several members of its board are
tied to the industry through investment funds or lobby shops.

Pipes derides Thailand for issuing compulsory licenses on several AIDS,
heart disease and cancer drugs. A compulsory license is a lawful
government authorization of generic competition for products while they
remain on patent.

Untruthfully, Pipes says Thai patients have not seen benefits as a
result. In fact, the Thai compulsory licenses have lowered the price of
an important HIV/AIDS drug (brand name: Kaletra) by about
three-quarters, enabling the government to triple the number of people
receiving this life-saving treatment. More will go on the treatment as
need grows and generic competition continues to reduce prices. The
generic version of a heart-disease drug (brand-name: Plavix) is
one-seventieth the cost of the brand-name product, which will enable the
government to offer the drug in the public health system. Previously, it
has been unavailable.

The price reductions obtained by Thailand have also benefited people in
other developing countries. After Thailand issued its compulsory license
on Kaletra, for example, the maker of the brand-name version,
Chicago-based Abbott Laboratories, lowered its middle-income-country
price from $2,200 a year per person to $1,000.

Pipes refers to the billions of dollars in aid now being devoted to
providing AIDS drugs to people in Africa and other poor countries. She
fails to acknowledge that it was compulsory licensing, the threat of
compulsory licenses and generic competition that made it possible for
aid programs to save the lives of millions of people with HIV/AIDS.

Ten years ago, AIDS medicines for developing countries were priced the
same as in rich countries - more than $10,000 a year per person, making
an AIDS diagnosis a death sentence for almost everyone in poor
countries. Now, thanks to generic competition, those same drugs can cost
less than $100 a year. The lower prices from generic competition made it
possible for aid donors to invest in saving the lives of those with
HIV/AIDS.

Pipes at least acknowledges that Thailand's compulsory licenses are
permissible under international law, though she wrongfully asserts that
the right to undertake compulsory licensing is limited to poor countries
and public health crises. In fact, the United States (and other rich
countries) routinely issue compulsory licenses, including in the
pharmaceutical sector.

The small grain of truth in Pipes' misleading diatribe is that it is
expensive to develop new drugs, and that we do need incentives to
promote needs-driven medical research and development.

International discussions are under way under the auspices of the World
Health Organization to investigate models to spur R&D and promote access
to essential medicines, and the United States should continue to engage
in these conversations in good faith. One promising idea being discussed
is prize funds, which would offer rich rewards for those who make
important medical discoveries, but not require patients to pay high prices.

There is growing interest in the U.S. Congress in searching for such
win-win arrangements. Senate Resolution 241/House Resolution 525, for
example, proposes a U.S. trade policy aiming to promote pharmaceutical
innovation and access alike.

We do need fair-share contributions to R&D by middle-income countries
like Thailand (whose per-capita income is about one-sixteenth that of
the United States). But we can and must find ways to support R&D that do
not result in the rationing of life-saving medicines in developing
countries, and denial of life-saving treatment to people simply because
they are poor.


Robert Weissman is director of Essential Action, a public health
advocacy and corporate accountability group based in Washington. Funding
for Essential Action's Access to Medicines campaign comes from the Ford
Foundation and the Open Society Institute.

-----------------

Note: In the commentary above, Weissman is responding to the following
article by Sally Pipes of the pharmaceutical industry-funded Pacific
Research Institute.


http://www.bellinghamherald.com/317/story/360067.html

SALLY PIPES: Thailand's misuse of 'compulsory licensing' allowed corrupt
officials to steal millions
McClatchy-Tribune News Service
March 24, 2008


SAN FRANCISCO -- When it comes to public health, Thailand's former
government leaders would like the world to think that they're a
collection of 21st-century Robin Hoods.

Last year, the unelected military-backed government gave Thailand's
state-run pharmaceutical firm, the Government Pharmaceutical
Organization (GPO), permission to manufacture generic versions of drugs
that fight heart disease and AIDS, even though the medicines were still
patented by Western firms.

Robbing the rich to give to the poor, right?

Not really. Sick Thai citizens have yet to see any benefits and the move
has set a dangerous precedent that will stifle medical innovation and
endanger the health of millions.

Thai officials broke the patents by using "compulsory licenses," a legal
maneuver afforded to poor countries by the World Trade Organization
(WTO) in the event of a public health crisis. If a local government
can't afford a pertinent patented drug, it can issue a compulsory
license to produce it before the patent has expired.

But these provisions were never intended to be used by countries that
could afford the medicines but are simply choosing to pay less in order
to make other purchases - like tanks for example.

Last year, for instance, Bangkok spent $9 million on pay raises for
military leaders. Since 2006, the nation has increased its defense
budget by over 30 percent.

The reality is that the former military government officials used
compulsory licenses to pursue their own economic development. Their
scheme is just protectionism by a different name - and world governments
and trade bodies should see it for what it is.

Giving the GPO permission to manufacture patented drugs is part of the
Thai government's plan to establish itself as a globally competitive
producer of generics. Of course, there is nothing wrong with the
government wanting to encourage its own industry - but not when that's
done at the expense of patients and other countries who abide by both
the letter and the spirit of the law.

So far, the gambit has proven quite lucrative. In 2005, Thailand's GPO
reaped $35 million in profits by copying medicines. Only 2 percent of
that went toward research and development.

The literally billions of dollars in free medicines and development
projects pouring into sub-Saharan Africa don't come for free. Those must
be funded by sales from the developed world and, at least in part, from
countries like Thailand that can afford to pay some small part of the
cost of innovation - even if not at the same scale countries in the U.S.
and Europe can afford.

Activists justify compulsory licenses by claiming that drug makers focus
on diseases affecting only rich countries.

But that's simply not true. Over 100 drug-development projects that
specifically target diseases plaguing the Third World are currently
underway. Western pharmaceutical firms have already devised life-saving
treatments for HIV/AIDS, tuberculosis, and malaria. And they often offer
patented drugs to poor countries for free or at a steep discount.

In fact, even in Thailand, the affected companies were all offering
their products at steep discounts to the Thai government. When one looks
at the potential savings to the Thai government between those prices and
potential generic prices the distinctions are insignificant to a
national budget - less than the price of one tank.

Compulsory licenses can have a use in rare instances. But using them as
a deceptive tool for building up one's own industry perverts the spirit
of the trade agreement and will ultimately prove harmful to patients.

The newly elected Thai government is wisely examining this issue and
appears more interested in pursuing a thoughtful, long-term policy of
economic development that will serve its citizens far better than
quick-fix political schemes that result in Thailand becoming a hero to
anti-capitalist activists, but a pariah to the world economic community.


Sally C. Pipes is president & CEO of the Pacific Research Institute,
(www.pacificresearch.org), a nonprofit, nonpartisan think-tank that
champions free market policy solutions.



--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: (202) 387-8030
Cell: (202) 422-2687
www.essentialaction.org/access/