Drug Patent Rules Must Allow Exceptions for Public Health

Some big pharmaceutical companies are up in arms about developing countries importing less expensive generic versions of drugs for which these companies hold a patent monopoly. But the procedure is perfectly legal, even under the World Trade Organization's pro-pharmaceutical-monopoly rules. The only question is whether these huge corporations -- who used their political muscle in Washington to prevent our government from lowering the price of Medicare prescription drugs -- will intimidate other governments that are trying to provide essential medicines to their citizens.

Thailand became the latest target of this bullying last winter when it issued "compulsory licenses" for three drugs. Two were anti-AIDS drugs (efavirenz and lopinavir/ritonavir) and the third is used to treat patients with cardio-vascular disease (clopidogrel). A compulsory license allows for the production or import of a generic version of a patented drug, without the permission of the patent holder. It is completely legal, and in fact the United States has used compulsory licenses many times.

But the U.S. government has sided with the big pharmaceutical companies and put Thailand on a special "Priority Watch List," which could potentially lead to trade sanctions against Thailand. Actual sanctions are unlikely, but Washington and its pharmaceutical allies have made a serious threat. Now that pressure is reportedly being used to block similar licenses for three cancer drugs.

Thailand is a developing country of 65 million people, with income per person of about $10,000, or less than one-fourth that of the U.S. The government estimates that the use of generic efavirenz will enable it to provide this anti-AIDS medicine to an additional 20,000 people, as compared to using the pharmaceutical giant Merck's branded version (called Stocrin).

The vast majority of developing countries have not exercised their rights to compulsory licensing, because of the pressure from PhRMA (the U.S. trade association of the big branded pharmaceutical companies) and the many politicians that are under its influence. This is a tragedy. Former President Bill Clinton, speaking in support of the governments of Thailand and Brazil in issuing compulsory licenses, noted that "no company will live or die because of high price premiums for AIDS drugs in middle-income countries, but patients may."

The pharmaceutical companies argue that they need to protect their patents in order to fund the research and development that produces new drugs. This is partly true -- although the majority of pharmaceutical research goes to produce "copycat" versions of other drugs that already exist. These copycat drugs can generate big profits but don't necessarily provide any advantage over existing drugs. The system is so inefficient that Americans are currently paying about $150 billion dollars through monopoly pricing to the companies, in order to get about $25 billion worth of research -- much of which is not especially helpful.

So big PhRMA is really making an argument for more comprehensive reform: if the economic and social costs of funding research through private monopolies is so high, maybe we should put more into public and non-profit research (which already accounts for a substantial amount of the research these companies use). In fact, if our own government were to fund the research that the branded pharmaceutical companies now carry out, and allow the results to be used for generic drugs, the research would more than pay for itself. The government would save more than the cost of this research through lower prices for the drugs it buys through Medicare and Medicaid. And the drugs would be available immediately as generics to the rest of the world.

Such economically sensible reforms may be some years off, given the power of the pharmaceutical lobby. But the least we can do right now is to stop this lobby from bullying other governments that are trying to do the right thing for their citizens.

This column was distributed by McClatchy Tribune Information Services on March 20, 2008.

Comments

[davidkarlsson]

HuffPost's Pick

There are some disingenous statements in this article. Compulsory licenses may be "perfectly legal", but they were intended to deal with public health crises where drug supplies were unavailable, not just where the price was inconvenient. Despite what Weisbrot writes, the U.S. does not do compulsory licenses on pharmaceuticals. Some court cases on anti-trust have involved court-ordered compulsory licenses, but that is a far cry from governments breaking patents to avoid having to pay for products.

Pharmaceutical R&D may not be optimally spent, but the implication that breaking patents will somehow improve that situation doesn't make much sense. Less revenue from sales means less money for R&D, plain and simple. One can't expect too much from developing countries, but middle income countries like Thailand should be expected to contribute their fair share. The drugs they did compulsory licenses on are heavily discounted in Thailand or are provided free to many patients as part of access programs. The government has the money to purchase sufficient amounts of drugs for those patients who need to have them, but in the past simply chose not to provide a budget for doing so despite having the funds available. The difference in prices for the AIDS medicines is rather slight, 10-30%. It's not enough to justify a compulsory license.

[ChamberPost]

We certainly agree that everyone deserves access to essential medicines - but your prescription here is dead wrong. More than "partly true" is the entirely true statement that eliminating the incentives for research and development not only threatens our global economic growth, but also undermines the real needs of patients around the world.

Thailand spends 1/5th of what the US does on health care - based on percentage of GDP; and approximately 99% of the essential drugs in Africa are no longer on patents and are therefore available to the governments. The real issue that deserves some attention is how we can help these governments commit to improving access to these essential medicines.

Intellectual property fuels our economic growth and spurs innovations that raise the quality of life around the globe. We need to further protect it while working with governments to find real solutions.

More on the value of IP:
http://www.chamberpost.com/2008/03/it-is-ideas-tha.html

And TXfemmom, do some reading.
http://pipeline.corante.com/archives/2008/01/28/laissezfaire.php
http://meganmcardle.theatlantic.com/archives/2008/01/pharmaceuticals_understanding.php

[bobbyvassallo]

I'm all for getting new and innovative treatments into the Aids/HIV channel. However they do it, something must be done to slow and stop the spreading of Aids. Generations are being lost in Africa. New, lower cost, effective treatments are what it will take. www.bobbyvassallo.com

[LeftRight]

Okay, let's look at what's really happening here. First, most of the research money actually involves government funds in some way. Second, even if it didn't, the big pharma companies are doing just fine. They are actually right below the oil companies in terms of profitablity!

[TXfemmom]

Poor countries should be able to put the health and welfare of their citizens above the desires of these drug companies. The companies often can produce these medications for a very small sum, but continue to charge exorbitant amounts, even in poor countries, for their life-saving products.

Fools that we are, we pay twice as much, or even more than other developed countries for our meds. Just imagine what Americans would do if we had to pay TWICE as much for oil, just because the oil companies thought we should, than the rest of the world. Pandemonium would occur, yet we permit our government and these drug companies to do just that to us with medications to prevent or cure our medical conditions.