Inter Press Service - August 28, 2007
David Cronin

Since last year, Thailand has issued compulsory licenses on several patented medicines to ensure that they are made available at more affordable prices than they would otherwise be.

Although the Bangkok government insists that it is entitled to take such steps under rules set by the World Trade Organisation (WTO), its actions have been criticised by Peter Mandelson, the European commissioner for trade.

In a letter, seen by IPS, Mandelson expressed concern that Bangkok "may be taking a new approach to access to medicines" by stating that if drug companies wish to do business in Thailand, they should offer their drugs for no more than 5 percent above the cost of generic versions of the products in question.

"This approach would be detrimental to the patent system and so to innovation and the development of new medicines," Mandelson said. "It risks forcing more drug companies to abandon their patents and could lead to the isolation of Thailand from the global biotechnology investment community."

In a 2001 declaration issued in Doha, Qatar, the WTO stated that intellectual property rules should not hamper countries from addressing public health emergencies.

While Mandelson said he supported that declaration, he claimed that it does not "appear to justify a systematic policy to apply compulsory licenses whenever medicines exceed certain prices." He called on Thailand to consider entering into direct discussions with companies holding the rights on particular drugs, rather than threatening to overrule those patents.

Dated Jul. 10, Mandelson's letter was addressed to Krirk-krai Jirapaet, the Thai minister of commerce.

In a reply, the minister said that both WTO rules and Thailand's 1991 Patents Act allows government agencies to use compulsory licenses without prior authorisation from the patent holders.

Mandelson's letter is likely to irk members of the European Parliament (MEPs).

Next month, the Parliament's committee on international trade will consider a request by the European Commission, the executive arm of the EU, to approve a WTO accord designed to allow poor countries lacking production capacity to address public health emergencies by importing cheap generic versions of patented drugs produced under a compulsory licence.

The committee said last month that it was reluctant to rubberstamp this accord, as its provisions are regarded as too unwieldy to bring tangible benefits to the poor. Since the accord's provisions were drawn up in 2003, Rwanda has been the only country to notify the 151-nation WTO of its intention to use it.

Swedish Green MEP Carl Schlyter described Mandelson's letter as "counterproductive".

He argued that the European Commission has been trying to ensure that compulsory licences are only used by countries classified as 'least developed' by the United Nations, rather than by any poor and middle-income country facing serious health problems.

"The Commission fails to understand the purpose of the compulsory licensing system," he told IPS, adding that the executive "should be happy" that Thailand has been making use of the flexibilities applying to intellectual property rules.

Thailand has an estimated 600,000 people who are HIV positive and has recorded some 300,000 deaths from AIDS.

In November last year, it decided to break a patent on Efavirenz, an AIDS treatment manufactured by the U.S. firm Merck Sharp and Dohme.

During 2007, it has overruled patents on Kaletra, another AIDS drug, made by Abbott. It has also announced its intention to begin importing Indian-made generic versions of Plavix, a blood-thinner used in treating heart disease, made by Sanofi-Aventis.

Vichai Chokvivat, chairman of the Thai state-run drug firm, the Government Pharmaceutical Organisation, said earlier this month that Plavix is too expensive for most of his compatriots.

At the moment, Plavix costs 70 baht (2 dollars) per pill. The Thai authorities are hoping that this will be reduced to one baht (3 cents) per pill, once generic versions are imported to the country.

Compulsory licenses have been deemed especially important in ensuring that AIDS patients have access to 'second-line' treatments in cases where they have displayed a resistance to drugs previously prescribed to them. In 2006, the World Bank predicted that the Thai government's resort to compulsory licenses would reduce the cost of second-line drugs by 90 percent, saving the country 3.2 billion dollars over 20 years.

The humanitarian organisation M decins Sans Fronti res (MSF) has protested at Mandelson's calls on Thailand to negotiate with patent holders, rather than issue compulsory licences.

Tido von Schoen-Angerer, director of MSF's access to medicines campaign, said that this call "blatantly ignores basic public health safeguards" agreed at WTO level.

MSF refuted Mandelson's claim that violating patents can have negative consequences for innovation of new medicines. According to the organisation, this claim has been disproved by a 2006 report from the World Health Organisation's Commission on Intellectual Property Rights, Innovation and Public Health.

"This report shows that even with increased patent protection in developing countries, desperately needed innovation for diseases that primarily affect people in developing countries has not increased," said von Schoen-Angerer, who urged the Commission to take no further action against Thailand.

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