Wall Street Journal - September 26, 2002
Barun Mitra* and Richard Tren**

This is not the propaganda of a multinational pharmaceutical company or its subsidiary in India. Rather, it is the striking lamentation in the Times of India of Ananda Mohan Chakrabarty, an Indian scientist, patent holder (for genetically modified bacterium used to remove oil spills) and developer of a new anti-cancer drug.

The World Trade Organization, which met last week to discuss how countries should protect both public health and intellectual property, might at future meetings consider why intellectual-property rights should be protected to spur innovation by those like Mr. Chakrabarty, and contribute to social and economic development in poor countries such as India, Botswana and Zimbabwe.

Instead, the WTO and others have focused on the conclusions of a report, exploring the role of intellectual-property rights in development, recently released by the British government's Commission on Intellectual Property Rights. The report is likely to influence the decisions of poor countries in how they protect -- or fail to protect -- intellectual property.

Although the CIPR concluded that a weak patent regime helps the poor by making products like medicines more accessible, Zimbabwe's case illustrates why this belief is misguided. In June, Zimbabwe was praised by AIDS activists when it called for a six-month emergency situation to deal with the HIV/AIDS crisis, which would have allowed the importation of generic versions of patented AIDS drugs.

However, not one generic drug has been imported into Zimbabwe, and not a single person in need of treatment has benefited. This is because the problem was never the price of drugs or patents, but rather the poor health infrastructure, devastated economy and a corrupt and ruthless government -- unfortunately characteristic of many poor countries.

Botswana, on the other hand, has a worse HIV infection rate, but it has partnered with the drug giant Merck and the Gates Foundation to increase access to health care. By working with, rather than against, the research-based drugs industry and respecting intellectual-property rights, more Botswanans are receiving treatment. Indeed, it has been reported that many Zimbabweans travel to Botswana in the hope of receiving treatment.

Access has been a problem in India for much of the past 50 years. Nothing illustrates this more than the fact that 60% to 80% of patients seek remedies from traditional medical practitioners or alternative medicines.

The weak IPR regime in India has contributed little to improving the quality of health service. Indeed, it may be argued that this lack of recognition for IPR has substantially contributed to the degeneration of traditional knowledge systems, including some that may have relevance even today. Devoid of any protection, knowledge practitioners generally passed on their insights through the family chain or to specially favored disciples. Consequently, much of this knowledge system never entered the public domain, was never scrutinized and therefore was denied the advantages of critical peer review that is at the root of the advancement of knowledge in the world today.

The impact on the economy is not inconsequential. At a recent seminar, the chief justice of the Delhi high court said that the loss of revenue to the Indian government could be around $2 billion. Also, the wide availability of cheap look-a-like and counterfeit products are defrauding the consumer of quality products.

Despite a lack of intellectual-property rights, there is encouragement to innovate in India -- it comes from the thousands of entrepreneurial inventors there who feel compelled to seek solutions for problems big and small. The National Innovation Foundation and the Honeybee Network have taken up the task of documenting traditional knowledge in India, and at the same time promoting a culture of innovation by identifying and helping grassroots inventors.

The major failure is on the part of the Indian government, which gives members of this large and vibrant community few incentives to press ahead with their work. Instead, those who can, take their patents (and often themselves) elsewhere, and India misses out on vital opportunities to promote innovation and technology transfer.

Indeed, the strange contradiction of India's immense potential with the government's limited vision of its own people becomes clear upon reading local newspapers, where feature articles laud Indian scientists based on the number and quality of the American patents they hold, while their editorial pages scathingly criticize the "imposition of First World patent laws."

Ironically, while the lack of adequate patent protection stifles India's scientists and local research and development, the government has been much more forward-thinking when it comes to protecting copyrights.

The Indian computer and information technology-based industries were once at the forefront of piracy. But as the Indian software industry has become a major force on the world stage, it has taken the lead in curtailing piracy. The Indian entertainment industry has also been able to tap into world markets and is now conscious of the need to secure intellectual-property rights.

Clearly, as sectors of the Indian economy globalize in an increasingly knowledge-based world, the relevance of IPR will increase. The divide is already beginning to surface among Indian pharmaceutical companies. Some Indian pharmaceutical companies aspiring to become global players already favor a proper IP regime.

However, pharmaceutical companies that survive by reverse engineering and supplying local markets, or other developing-country markets, argue against IPR under the pretext of access to medicine, price or the life-saving nature of some medicines. But these are mere excuses -- the companies are more interested in protecting their bottom line by restraining competition than genuinely concerned about the wellbeing of sick people. Those who are truly concerned about patients and the quality of health-care systems should focus on delivery, and not exclusively on the price of drugs. After all, drug prices constitute a very small proportion of total health-care costs.

Botswana and Zimbabwe provide ample evidence that protecting patents does not block access to medicines. More importantly, India illustrates how a weak IPR regime coincides with underdevelopment, poverty and lack of access.

Addressing health needs in poor countries like India, Zimbabwe and Botswana is no easy task -- and it certainly will not be helped by undermining patents under the guise of protecting public health. The best way of ensuring improved health and health-care systems in developing countries would be for them to grow wealthy. Wealth creation, technology transfers and the confidence of investors, however, will be undermined by moves to weaken the IP regime, which will simply keep countries poor and unhealthy longer.

* Mr. Mitra is the director of the Liberty Institute in New Delhi, India.

** Mr. Tren is the director of Africa Fighting Malaria in South Africa.

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