[Pharm-policy] [Fwd: UNDP press release: differential pricing and IPR]

[Mike Palmedo]

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From: Sharonann Lynch <salynch00@earthlink.net>
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Subject: UNDP press release: differential pricing and IPR
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The Human Development Report 2001: "Making new technologies work for 
human development" can be downloaded at  http://www.undp.org/hdr2001/


HUMAN DEVELOPMENT REPORT 2001
United Nations Development Programme

STRICTLY EMBARGOED UNTIL 10.00 a.m. GMT, 10 July 2001

HDR calls for R&D, differential pricing and IPR support to help 
developing countries bridge tech divide

Mexico City, 10 July 2001-This year's Human Development Report (HDR), 
released today, urges global initiatives to ensure that new 
technologies address the most pressing needs of the world's poor 
people. It calls for greater international funding for research and 
development; differential pricing between rich and poor countries for 
medicine and other essential high-tech products; and fair 
implementation of global intellectual property rights (IPR), 
including compulsory licensing of patents.

Sakiko Fukuda-Parr, the lead author of the Report, states: "No 
government can singlehandedly cope with global market failures and 
lack of public investment in new technologies designed to suit the 
needs of developing countries. And these issues are simply too 
important for the international community to ignore. Governments in 
both developed and developing countries need to recognise that 
technology policy affects a host of development issues including 
public health, education and job creation."

The Report cites an especially urgent need for research in the following areas:

* Vaccines for malaria, HIV and tuberculosis as well as lesser-known 
diseases like sleeping sickness and river blindness;

* High-yielding and drought-tolerant varieties of sorghum, cassava, 
maize and other staple foods of sub-Saharan Africa and South Asia;

* Low-cost computers and wireless connectivity for poor people and 
isolated communities;

* Low-cost energy systems, including solar power, to bring 
electricity to the two billion people who currently have no access to 
it.

It suggests that rich countries and international financial 
institutions could support a global effort to create incentives and 
new partnerships for research and development. Noting recent 
contributions from the Bill and Melinda Gates Foundation and other 
private sources in the industrialized world, it also suggests that 
developing countries could introduce tax incentives to encourage 
their own billionaires to set up foundations. Rich individuals from 
Brazil to Saudi Arabia to India to Malaysia could help fund 
regionally relevant research.

The Report also endorses the proposal, made by the head of research 
at Novartis, that high-tech companies devote a percentage of their 
profits to research on non-commercial products.

On the issue of differential pricing, the Report notes that, while an 
effective global market would encourage different prices in different 
countries for products such as pharmaceuticals, the current system 
does not. With high-tech products, where the main cost to the seller 
is usually research rather than production, such tiered pricing could 
lead to an identical product being sold in poor countries for just 
one-tenth-or one-hundredth- the price in Europe or the United States.

But drug companies and other technology producers fear that knowledge 
about such discounting could lead to a demand for lower prices in 
rich countries as well. They have tended to set global prices that 
are unaffordable for the citizens of poor countries (as with many 
AIDS drugs). "Part of the battle to establish differential pricing 
must be won through consumer education," Ms. Fukuda-Parr states. "The 
citizens of rich countries must understand that it is only fair for 
people in developing countries to pay less for medicines and other 
critical technology products." The Report suggests that the issue of 
differential prices should be focused on in upcoming international 
trade negotiations.

The Human Development Report 2001 also concludes that developing 
countries need help in implementing the World Trade Organization 
agreement on Trade-Related Aspects of Intellectual Property Rights 
(TRIPS). For low-income countries, implementing and enforcing 
intellectual property rights put stress on scarce resources and 
administrative skills. "Without good advice on creating national 
legislation that makes the most of what TRIPS allows, many countries 
can legislate themselves into a disadvantageous position," says Ms. 
Fukuda-Parr. "The high costs of disputes with the world's leading 
nations are daunting, discouraging developing countries from 
asserting their legal rights."

The Report notes, for example, that the TRIPS agreement includes 
safeguard provisions such as compulsory licensing and parallel 
importing to ensure access to high-tech products of overriding 
national importance. It notes that such provisions are already in 
widespread use in Canada, Japan, the United Kingdom and the United 
States for products including pharmaceuticals, computers and tow 
trucks. They are often justified as antitrust measures to prevent 
reduced competition and higher prices. But so far these provisions 
have not been used by developing countries.
-- 
Sharonann Lynch
Health GAP Coalition
212-674-9598

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