Worldwide Locations

Worldwide Locations

Drug Spat Strains Global Trade System

The dispute over licensing generic versions of patented medicines severely tests global health and health-care-access policy.

The dispute over licensing generic versions of patented medicines severely tests global health and health-care-access policy.

by Elizabeth H. Williams

Originally published in Asia Times Online, May 24, 2007

The current dispute over Thailand and Brazil licensing generic versions of patented medicines severely tests global health and health-care-access policy. It also tests key US trade relations with Asia and the functionality of the global trade system itself. So far, the results aren't encouraging, and meanwhile the issue is getting larger and more complex.

A functional patent system would strike a judicious balance between the interests of drug companies, whose patents compensate them for large investments required to develop lifesaving medicines, and the imperative to make them available to the world's poor. Instead, today we have a dysfunctional battle between pharmaceutical giants and governments of developing countries, each side claiming to champion the world's health needs and accusing the other of exploitation.

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) allows developing World Trade Organization (WTO) member countries to issue compulsory licenses for patented drugs and other innovations so they can be manufactured generically and sold at affordable prices in the service of compelling public-health interests.

Thailand recently issued compulsory licenses for second-line HIV (human immunodeficiency virus, which causes AIDS) medications (used when resistance develops to first-line medicines), including Aluvia, made by Abbott, originally priced at US$2,200 per patient annually—expensive for most Americans, and considerably more than most Thais earn in a year.

Since Thailand's announcement, Abbott withdrew seven medicines from the Thai market and threatened not to introduce new ones. The pharmaceutical lobbying group, USA for Innovation, attacked, calling on the US Trade Representative to brand Thailand an intellectual-property "violator."

The US has sent mixed signals, putting Thailand on its so-called Priority Watch List for violating intellectual-property rights, while acknowledging that its compulsory-licensing decision was legal. Then it backtracked, denying its decision had anything to do with Thailand's decision to produce generic drugs under a compulsory-licensing arrangement. Then it said compulsory licensing was one factor among others.

But leaders of non-governmental and faith-based organizations, from former US president Bill Clinton to former Thai senator John Ungphakorn of the AIDS Access Foundation to Asian church groups, have all been clear in their strong endorsement of Thailand's and Brazil's licensing decisions, arguing that while no pharmaceutical company's life depends on drug prices in the developing world, many patients' lives do.For its part, the Thai government says it simply wants to negotiate a deal with the patent holders to sell HIV drugs at prices ordinary citizens can afford.

"We tried to negotiate with them officially for more than two years and unofficially for more than four years," but it has never been successful, said Thai Public Health Minister Mongkol Na Songkhla in a recent online interview at the Asia Society. "No company or patent holder wants to talk about lowering the price or sharing a drug with poor people."