Wall Street Journal - Thursday, July 11, 2002
Richard Tren

Much of the debate over drug patents has focused on the fear that the WTO treaty on Trade-Related Intellectual Property Rights, which covers pharmaceutical patents, will prevent poor countries from importing cheap generic drugs from Brazil, India or Thailand and other generic producers from copying future drugs. TRIPs will become legally binding after 2005 for some countries and 2016 for others. The treaty does make allowances for compulsory drug licensing for health emergencies, but the activists fear that the agreement gives drug companies too much power.

The Accelerating Access Initiative has been criticized precisely for this reason. The initiative is a partnership between the U.N., drug companies and countries designed to fast track improved treatment, care and support for those living with HIV/AIDS. The fear is that multinational corporations, which have made separate agreements with individual countries, can pull out at any time, which could compromise treatment programs. The corporations have been accused of imposing onerous conditions on developing countries to prevent them from importing cheap generics.

James Love of the Consumer Project on Technology, a U.S.-based consumer-rights organization, was recently quoted as saying that developing countries are afraid to opt for generic drugs because foreign aid is tied to brand-name drugs. Yet activists have always failed to show any concrete evidence to back up this charge. Developing countries can and do import generics or issue compulsory licenses in compliance with international law.

The drug activists would have us believe that while agreements and cooperation with the research drug companies is unsustainable, undermining drug patents and issuing compulsory licenses is sustainable. This is simply not true. It would seem obvious that a sustainable treatment solution requires that new drugs be developed constantly in order to cope with drug resistance.

Developing new drugs for the diseases that plague developing countries is vital. The encouraging news is that the total number of anti-infective compounds in development has risen by over 30% since 1997. However, according to Pharmaprojects, an organization that tracks the development of pharmaceuticals under development, the number of HIV anti-retrovirals has fallen by around one third over the same period.

Further, there are increasing reports of resistance to anti-retroviral treatments. According to a study by Dr. Frederick Hecht and published in the Journal of the American Medical Association, in some cases drug resistance was witnessed before treatment even began.

Innovation is therefore essential, but it did not feature much at the conference. The drugs industry wasn't even represented on a panel on Leadership and Drug Research. Moreover, the recent drop in HIV anti-viral compounds could be at least partly due to the threat of generic competition and the attacks on multinational companies, according to Dr. Des Martin, president of the South African HIV Clinicians Society. Why rush to develop new drugs if they will be copied by others?

For all the media attention they attract, the activists are no good at ensuring that there are incentives to develop new drugs. The drug-research companies are motivated by profit and have anxious shareholders to answer to. This is the way capitalism works; why should drugs work differently? Drug companies have a proud history of developing anti-retrovirals, but they need security over their investment. Countries should therefore be creating the right institutions to encourage their ongoing investment.

TRIPs has a bad reputation internationally; the activists only want us to know about its potential negative impacts. TRIPs however holds out great promise for innovators in developed and developing countries. That Brazilian generics producer FarManguinos has applied for patents for potential ARVs is a testament to this. Far from making AIDS treatment unsustainable, a strong interpretation of TRIPs creates the very foundation for sustainable treatment.

The activists argue that the only way to ensure sustainable treatment and low drug prices is to give as much power to government and NGOs as possible and encourage the use of generics. But in many parts of Africa, governments have chosen to turn a blind eye to the looming AIDS crisis; spending on the military frequently dwarfs that on health care. There are of course notable exceptions, such as Uganda. Some countries, such as Botswana, have chosen to partner with the research drug companies to ensure increased drug access. But success stories do not abound.

Generic drugs can certainly play an important role in any health system, but if AIDS patients in 10 years time are going to have any effective drugs (generic or otherwise), then the research-based drug companies will have to be encouraged to develop new treatments and vaccines. This means respecting intellectual property and providing a more conducive regulatory environment. It also means encouraging economic growth in other ways--and a good way to start is to create a culture that protects property rights, starting with those of the poor--so that a market for their products actually develops in Africa, India and China.

It does not mean imposing price restrictions or threatening compulsory licensing--such actions will only act as disincentives to the development and marketing of new drugs.

Mr. Tren is a director of the South Africa-based NGO Africa Fighting Malaria.
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