Important note: Information in this article was accurate in 2001. The state of the art may have changed since the publication date.

Reuters NewMedia - Monday November 5, 2001
Ben Hirschler

Executives were on the backfoot at an industry conference in London on Monday, warning of a "slippery slope" as developing countries and health activists stepped up a campaign to secure broad rights to override patents on lifesaving drugs.

The $300-billion-a-year industry sees a profit threat in demands by 60 developing countries, led by Brazil and India, for a loosening of the World Trade Organisation's (WTO) agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Poor countries argue that TRIPS rules, guaranteeing 20-year patents on medicines, make it hard for governments faced with HIV/AIDS and other epidemics to get access to drugs. Drugmakers say the system is vital to reward innovation.

The controversy has been complicated by threats from Canada and the US to override patents on Bayer AG's antibiotic Cipro, in order to protect citizens against anthrax, leading to accusations of double standards.

George Poste, former research head at SmithKline Beecham, who now heads a consultancy firm, said the row highlighted the "populist politics" the industry now had to contend with.

"The issue of AIDS drugs pricing, the Canadian government's wish to impose compulsory licensing on ciprofloxacin (Cipro) and the recently negotiated US deal with Bayer are symptoms of a rather slippery slope that could all too easily overtake a broader product portfolio," he told the conference.

TOMORROW'S MEDICINES

No one believes the provision of cut-price--or even free--AIDS drugs in Africa will seriously dent drug company profits.

But surrendering intellectual property in one part of the world would undermine the system of commercial incentives vital for the development of tomorrow's medicines, according to Hank McKinnell, chairman and chief executive of Pfizer Inc.

Without the protection of patents, drug companies would never have developed the 64 AIDS drugs now on the market and the hundreds more in development, he argued.

"Critics say we should abrogate all intellectual property protection in the developing world and this will solve the problem of people in sub-Saharan Africa having access to necessary medicines. Nothing could be further from the truth," McKinnell told the conference.

The key proposal by developing nations states that "nothing in the TRIPS agreement shall prevent countries from taking measures to promote and protect public health."

The US, Britain, Germany and Switzerland--all states with big pharmaceutical industries--fear this would dramatically weaken WTO protection for intellectual property.

Health campaigners, however, think the tide is turning their way, helped by the recent controversy over anti-anthrax drugs.

"When developed countries perceive patents to be a threat to access to medicines, they don't hesitate to implement safeguards which allow them to override patents," Nathan Ford, a campaigner with Medicins Sans Frontieres (Doctors Without Borders) in London, told Reuters.

"But when developing countries try and do it, they come under enormous bilateral trade pressure from the US--it's a clear case of double standards," Ford said.

Harvey Bale, director general of the International Federation of Pharmaceutical Manufacturers Associations, who plans to travel to Doha to lobby the industry's case, is fierce in his defence of the current patent system.

"What this debate is about is the planned seizure of intellectual property," he said.

But he acknowledges the pressure is on, especially with the European Union "wobbly" on the issue as France shows signs of favouring a relaxation in TRIPS rules.

COMPROMISE?

Talk of an eventual compromise is in the air.

Washington has proposed giving least-developed countries a 10-year extension until 2016 to implement TRIPS and a 5-year moratorium on contesting any drug patent actions taken by sub-Saharan African countries.

But that does not go far enough for Brazil and its allies, leading US Trade Representative Robert Zoellick to remark at the weekend that WTO members may have to launch a new round of world trade negotiations without a deal on drug patents.

The WTO's last attempt to launch world trade negotiations ended in failure in Seattle in December 1999 after members were unable to agree on an agenda.
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