[Pharm-policy] Far Eastern Economic Review on UNCTAD meeting and Thai CL dispute

[James Love]

This is a pretty interesting article on the Thai dispute over
compulsory licensing, from the Eastern Economic Review.   It contains
a few technical mistakes on the IPR issues, but does a good job
of capturing the politics of the trade dispute.  Jamie

http://www.feer.com/_0002_17/p16global.html

GLOBAL TRADE 
New World Disorder
Strains in the global trading regime are set to resurface at this week's
Unctad summit in Bangkok, where a controversy has been brewing over access
to treatments for a major developing world killer: Aids 

By Shawn W. Crispin in Bangkok
Issue cover-dated February 17, 2000 

With world leaders and other officials gathering in Bangkok for the
week-long meeting of the United Nations Conference on Trade and
Development, a small band of demonstrators has reminded delegates of the
worrying new fissures in the global trade regime. As at the World Trade
Organization's fractious Seattle meeting in December, the gulf in
perceptions between the haves and the have-nots on who benefits most,
threatens to overshadow Unctad's party in the Thai capital. 

The burning concern that could help alter the terms of the debate at Unctad
is Aids and the life-saving but costly drugs from Western pharmaceutical
companies used to delay the disease's deadly progress. But any of a number
of other acrimonious issues, ranging from the environment to child labour,
now highlight the growing perception in the developing world that the
West--and the U.S. in particular--has commandeered efforts to liberalize
world trade to give precedence to domestic interests. Yet Aids is a
particularly potent issue. In South and Southeast Asia, there were 1.3
million new HIV infections in 1999, United Nations estimates show. 

Third World critics contend that some of the most powerful interests in the
U.S., such as the AFL-CIO labour confederation and the pharmaceutical
industry, have lobbied to have their agendas tabled as part of world trade
liberalization efforts. The critics also note that subsidies still prop up
agricultural production in the European Union, and that anti-dumping
measures are often employed to protect ageing U.S. industries such as steel
and textiles. At a time of great liberalization in world trade, the
perception also has grown that the World Trade Organization, like the
International Monetary Fund and World Bank, answer first to Washington and
second to their member states. 


"For years Washington has taken the moral high ground in world trade
negotiations to tower over the developing world," says Jagdish Bhagwati, a
free-trade advocate and professor of economics at Columbia University in
New York. "That's how they have managed to push Western-style
protectionism, like intellectual property rights and anti-dumping measures,
under the guise of trade liberalization. Non-trade issues should be left
off the trade-liberalization agenda." 


Meanwhile, the U.S. and other Western nations, as well as the
multinationals that often attract the developing world's ire, have begun
responding to the criticism at international trade and economic meetings
such as the WTO gathering in Seattle and the recent World Economic Forum at
Davos, Switzerland. With the Aids-drug controversy in Thailand heating up
the debate in Bangkok, the February 12-19 Unctad meeting is likely to
confront these issues as well. 

"Unctad used to be more political and polemical," says Supachai
Panitchpakdi, Thai Deputy Prime Minister in an interview with the REVIEW
(see accompanying story). "Unctad now will be more rational and scientific
in its approach to the question of the divide between the developed and the
developing world." 

That divide became very apparent in mid-January when Jon Ungpakorn and 200
other Aids activists demonstrated outside the U.S. embassy in Bangkok to
demand that the U.S. allow Thailand to locally produce didanosine, or ddI,
a drug under patent protection by its developer, Bristol-Myers Squibb of
the U.S. Thailand has asked to be exempted from international
patent-protection laws so that it can produce generic ddI that would be far
more affordable than the branded version. 

"People are dying because they cannot afford the drugs they need," says
Ungpakorn, director of the Aids Access Foundation, a Bangkok-based,
non-governmental organization working to improve accessibility to HIV/Aids
drugs. Less than 1% of Thailand's estimated 1 million HIV-infected people
can afford the three-drug "cocktail" that is saving lives in the U.S. and
Western Europe, where about 85% of HIV patients have access to the
treatment. Without the subsidized public-health programmes available in the
West, the $675-a-month, three-drug treatment is out of reach for nearly all
Thais. The Bangkok demonstrators focused on the Bristol-Myers drug because
ddI makes the other elements of the drug cocktail, already available in
Thailand in less-expensive form, work better. AZT, another element of the
drug cocktail, has fallen to a monthly cost of $48 from $325 in 1992, when
it lost its monopoly rights. 

But ddI is another matter. "By the time the patents run out, everyone will
be dead," says Ungpakorn. 

In Asia, antagonism against the West has grown since the U.S. failed to
back Thailand's Supachai Panitchpakdi in favour of New Zealand's Michael
Moore as director-general of the World Trade Organization. Concerted Asian
opposition has hardened to extending the WTO's rule to cover labour and
environmental issues being pressed by Washington. That opposition reached a
higher pitch at the WTO Seattle meeting, almost collapsing the talks. 

"The U.S. was leading the way towards globalization even before the end of
the Cold War," says Kullada Kesboonchoo, a scholar on globalization and
professor of political science at Chulalongkorn University in Bangkok.
"Only now the developing world is waking up to the reality that the U.S.
has been organizing the world in ways that suit its own interests best." 

In 1992, the U.S. pushed for the inclusion of Trade Related Aspects of
Intellectual Property Rights, also known as Trips, onto the world-trade
agenda to protect the interests of its many corporations that rely on
intellectual-property protection. Trips granted companies exclusive rights
to markets long enough for them to recoup substantial research and
development costs, sometimes for as long as 20 years in the case of
pharmaceuticals. But the developing world sees such patent protection only
in terms of higher prices and scarcity of life-saving drugs. 

Bristol-Myers Squibb has such exclusive patent rights to ddI in Thailand.
But Aids activists say the traditional justification for patent rights,
that products must be given a period of exclusivity to recoup huge research
and development costs, doesn't fit with ddI because, they contend, the core
component of the drug was developed by the U.S. National Institutes of
Health in the 1970s. They say Bristol-Myers Squibb was granted a patent on
ddI because of the delivery system, or buffer, it created, a component Aids
activists say isn't innovative enough to be worthy of protection. 

"If Bristol-Myers Squibb didn't develop the drug, I don't see why they
should have monopoly rights," says Tido Von Schoen-Angerer, drug project
coordinator in Bangkok for international medical-relief organization,
Medecins Sans Frontieres. "People are dying all over the world as U.S.
companies maximize shareholder value. With HIV/Aids, its time to think
about optimal world social value, not profit maximizing." 

Officials at Bristol-Myers Squibb strongly disagree. "The development,
clinical trials, production and marketing of ddI's delivery system cost
millions of dollars and is worthy of intellectual property protection,"
says Patrick Donohue, a spokesman for Bristol-Myers Squibb in New Jersey.

"Because of the nature of our business, we need intellectual property
protection across the board all around the world. Without it, we would not
have the incentive to develop new and more effective HIV/Aids drugs." 

Although vague, Trips does allow for generic production of patent-protected
medicines, known as compulsory licensing, in times of public health
emergencies and unfair pricing behaviour. In fact, Western countries often
use compulsory licensing to meet shortfalls at times of excess domestic
demand. But developing countries contend they must think twice before
invoking compulsory licensing, because of pressure and the threat of trade
sanctions from the West. 


"We must be very, very careful," says Somsong Rukphao, head of the Thai
Ministry of Health's Communicable Disease Centre. "We must consider the
livelihood of our 62 million people, not just our 1 million HIV patients."
Thailand hasn't moved to exercise its compulsory licensing rights under
Trips even though the U.S. Trade Representative's Office promised "to raise
no objection" if it did--Thai officials nonetheless still fear trade
reprisals. 

That may be because there's a history. When the Thai government established
a Pharmaceutical Patent Review Board to assess the effects of patents on
drug accessibility, the U.S. Trade Representative's office threatened
sanctions on certain Thai exports, including jewellery and wood products.
The board was quickly disbanded and Thailand, which sends a quarter of its
exports to the U.S., set limits on the right to issue compulsory licences
for pharmaceuticals. 

"It has become obvious to the developing world that the
trade-liberalization exercise is a shell game," says Bhagwati of Columbia
University. "The West has used the General Agreement on Tariffs and Trade
and the WTO as a vehicle for pushing its own trade agendas for a long time.
It's time to return the trade-liberalization agenda to liberalization, not
thinly veiled protectionism." 

Recent comments by U.S. officials have appeared to put a softer face on
Washington's trade agenda. "Intellectual property protections are very
important to a modern economy," President Bill Clinton said on World Aids
Day in December. "But when HIV and Aids epidemics are involved, the United
States will henceforward implement its health-care and trade policies in a
manner that ensures that people in the poorest countries won't have to go
without the medicine they so desperately need." 

That appears to be a shift from previous U.S. policy. In 1998, when member
nations proposed that the World Health Organization be granted more power
to monitor international trade agreements and their effects on global
public health, and WHOintimated that it would support improved access to
patented medicines in developing countries, the U.S. State Department
threatened to withhold funding to the organization.