Affordable medicines row

The US pharmaceutical industry -- which has so far prevented its government from endorsing a prescription for change -- is now directly engaging its counterparts in other nations on the issue of giving poor countries access to cheap medicines. But as the Fifth World Trade Organization (WTO) Ministerial Conference draws near, an immediate cure for the problem remains elusive

 
By Clifford Polycarp
Published: Monday 30 June 2003

-- the us pharmaceutical industry -- which has so far prevented its government from endorsing a prescription for change -- is now directly engaging its counterparts in other nations on the issue of giving poor countries access to cheap medicines. But as the Fifth World Trade Organization (wto) Ministerial Conference draws near, an immediate cure for the problem remains elusive.

Official sources in India's Union ministry of commerce and industry have confirmed that domestic drug manufacturers are a part of deliberations with us pharmaceutical groups. The talks follow close on the heels of South Africa's suggestion that wto members approach the us drug industry to break the impasse. The rationale of the move was that the us companies were the ones responsible for tying down the country's government.

The plan involved attempting to get us drug manufacturers to accept the draft implementing decision proposed by the chairperson of the Trade Related Intellectual Property Rights (trips) Council on December 16, 2002. The council is the apex wto body that addresses issues related to the rules of intellectual property enshrined in the trips Agreement. Prior to South Africa's initiative, proposals put forward by Japan, Brazil and the eu were rejected.

The sticking point in the entire controversy is the reference to paragraph 1 of the 'Declaration on trips Agreement and Public Health', adopted at the wto ministerial conference in Doha, Qatar, in November 2001. Such a mention would imply that diseases such as hiv/aids, tuberculosis, malaria and "other epidemics", generally defined, can be granted immunity from patent protection during a public health crisis. The us had rejected the draft in December last year on the grounds that the coverage of diseases with such language was too broad, allowing "wealthier (large developing) countries to override a wide range of drug patents".

Patent protection on drugs, especially life-saving medicines, has been a contentious issue as it substantially increases the prices of these drugs. This puts them out of reach of people in poor countries. According to the us Federal Trade Commission, generic or copied versions of these drugs cost 25 per cent less than their patented counterparts initially, and prices go down by up to 60 per cent after two years.

The trips Agreement would need to be fully implemented by developing countries, including India, only by January 2005. Under the current Indian Patents Act, the processes involved in producing the pharmaceutical product -- and not the final product itself -- are to be given protection for a period of seven years. From January 2005 onwards, the number of years will be increased to 20 and patent protection would have to be issued to final products as well. A report published by the United Nations Development Programme estimates that once trips comes into force, the resulting hike in price is likely to range from 12 per cent to 68 per cent. To expect developing countries to accept such price spirals without adequately addressing their concerns of access to cheaper medicines to fight life-threatening diseases, particularly in a public health emergency, seems unfair.

The Doha Declaration appeared to go a long way in addressing this concern. It instructed the trips Council to find an "expeditious solution" to the difficulties poor nations with inadequate or no pharmaceutical manufacturing capacities face in making effective use of compulsory licensing. A compulsory licence is the authorisation by a government to make and sell a product without the permission of the patent holder, so allowing a country facing a health crisis to import cheap generic versions of life-saving patented drugs from manufacturers in other countries, bypassing the patent holder.

The us opposition to the trips Council's draft decision has derailed the process. It wants to add a footnote which would restrict coverage to only 23 diseases. The flexibility on the number of diseases was implicit in the reference to "other epidemics". The us also wishes to restrict this by changing the text to "other epidemics of comparable gravity and scale". The us concern about the misuse of paragraph 1 stems from the fact that it controls 50 per cent of the global drug market currently. Developing countries have shot down the proposal because they feel it is an attempt to restrict the mandate in the declaration, which refers more generally to "measures to protect public health".

Since December 2002, Japan and the eu have put forward compromise proposals suggesting the involvement of the World Health Organization (who) or other experts in deciding the diseases to be covered. In February 2003, Brazil also floated an idea shifting the focus from disease coverage to manufacturing capacities of countries. Neither the us nor developing countries have, however, found any of these proposals acceptable. But most countries have welcomed South Africa's suggestion and that is where the issue remains.

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