Important note: Information in this article was accurate in 2007. The state of the art may have changed since the publication date.
Bangkok Post - March 22, 2007
It could be argued that the interim government's aggressive move to issue compulsory licences for several drugs without sufficiently warning each patent holder unnecessarily led to retaliation from Abbott. Possibly more pharmaceutical companies will follow suit in the days and weeks to come.
Yet prior negotiations with drug companies, as Public Health Minister Mongkol Na Songkhla explained at length in a white paper issued last month, largely amounts to a nicety that usually proves fruitless. Worldwide experience has shown that the iron stick of threatening to issue a compulsory licence is often the only negotiating tool drug companies seem to take seriously.
Indeed, Dr Mongkol mentioned that pharmaceutical companies did not cooperate with a working group set up in 2005 to negotiate for reduced drug prices. "After one year, a short report of the working group concluded the failure of their work to reduce the price of the patented drugs," he wrote in the white paper.
Once the compulsory licences were issued, Big Pharma responded swiftly. In February, Merck agreed to lower the price for Efavirenz, the first-line Aids-fighting drug, to 700 baht per bottle from the pre-compulsory licence price of 1,400 baht.
Abbott Laboratories, by withdrawing its applications to market new drugs in Thailand, appears to be drawing a line in the sand as it hopes other countries will not start issuing compulsory licences for its drugs. Although some have argued the move is "immoral", Abbott is within its legal rights and is taking a hard-line stance - not unlike Thai policy-makers.
Although Thailand's compulsory licences are legal under TRIPS, the government could do more to reassure the international community that its overriding of patents and importing of generic drugs was made "in good faith to protect public health" and will not be "an instrument to pursue industrial or commercial policy objectives", as the WTO deal stipulates.
In this respect, the Government Pharmaceutical Organisation should open its books or reveal its strategy to cope with increased generic production. Its facilities now do not meet World Health Organisation (WHO) standards, and thus none of the drugs produced at the GPO's current factory will meet global quality standards.
Abbott's decision to withdraw its new medicines will force Thailand to import a generic version of Kaletra from India, which may not be bad for now since the GPO has yet to start building a new factory. Thai patients will rest easy knowing the drugs they are taking come from WHO pre-qualified factories, and taxpayers will be happy that money from the Global Fund to Fight Aids, Tuberculosis and Malaria can be used to pay for them.
In the meantime, Thailand's stance on compulsory licensing is important to test the TRIPS agreement. Although news wires are fond of calling Thailand's usage of compulsory licensing "technically legal" - a loaded term - the move is often blasted simply because few countries have resisted pressure from Big Pharma and certain Western governments and actually exercised their rights under TRIPS.
But, if Thailand gets criticised for following the TRIPS deal approved by every WTO member, including the United States, then what is the point of the agreement?
In issuing compulsory licences, Thailand is putting meaning back into TRIPS - and forcing a renewed global debate on an issue Big Pharma would rather handle through bilateral trade deals with weaker nations.
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