Wall Street Journal - March 7, 2007

If you don't believe us, consider the proposals recently floated at the World Health Organization. In its January executive board meeting, Thailand's representative, Dr. Suwit Wibulpolprasert, declared that if an influenza pandemic hit, he'd counsel Bangkok to hold Western tourists hostage until those countries gave Thailand the necessary vaccines. The Kenyan delegation said it would present a proposal to its health ministry to seize Novartis's patent on Coartem, a malaria drug. And Bolivia chipped in that member states have to "put people over profit."

This kind of rhetoric is dangerous. Drug companies spend billions of dollars to develop, test and deliver drugs, as well as educate physicians on how to use them. There's no reason for Big Pharma to sink money into an expensive enterprise unless it is duly rewarded for it. That's why no serious government has contemplated using compulsory licensing, even if it's allowed to do so under WTO rules. Thailand and NGOs cite, among other countries, Mozambique, Zimbabwe and Cameroon as anti-patent precedents -- hardly the world's economic role models.

In seizing the patents for HIV/AIDS and heart medication, Thailand is exploiting vague language in the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPs, which sets down rules under which countries can seize patents. Article 31 provides for compulsory licensing in case of "national emergency" or for "public non-commercial use." Thailand clearly doesn't have an HIV/AIDS epidemic and heart disease isn't a "national emergency." So Bangkok claims the latter case, which is hard to rebut. What does "public non-commercial use" mean, anyway?

It's also unclear that Thailand's motives are purely altruistic. The national health security board that issued the compulsory licenses is under the Ministry of Public Health and allows outside NGOs on the board. Thailand's military government claims it can't afford to pay for rising drug costs, but at the same time promises free drugs for the poor. Yet it hasn't done a thing to address the taxes levied on drug imports, nor the often double-digit markups on drugs as they wend their way through Thailand's domestic delivery system to patients. It's also unclear what role Bangkok envisions for the Government Pharmaceutical Organization, Thailand's state-owned, for-profit monopoly. Could Thailand be considering seizing drug patents, producing pills at home, and turning GPO into a regional pharmaceutical provider?

Dr. Suwit and the Minister for Public Health, Dr. Mongkol na Songkhla, have friends in high places. Peter Piot, the head of the United Nation's joint program on HIV/AIDS, wrote in a Dec. 26 letter to the Public Health Minister that Bangkok's decision to seize Merck's HIV/AIDS drug patent was "a good example" of the country's commitment to "provide access" to antiretrovirals and lower the cost of the drugs. Margaret Chan, whom these pages praised in January for criticizing Thailand's IP abuse, retracted her statement in a conciliatory letter to the Thai government shortly thereafter.

"I deeply regret that my comments... may have caused embarrassment to the government of Thailand," she wrote. "They should not be taken as a criticism of the decision of the Royal Thai government to issue compulsory licenses, which is entirely the prerogative of the government, and fully in line with the TRIPs agreement."

Well, maybe. We're not lawyers, but WTO rules say patents can't be seized without "efforts to obtain authorization from the right holder on reasonable commercial terms and conditions" and only when "such efforts have not been successful within a reasonable period of time." Thailand did neither. It didn't consult with the drug companies before it seized the licenses in January, nor has it done so since then.

The irony is that firms like Merck don't make money on the seized patents in Thailand. In a January 2005 letter addressed to the Thai government, Merck's local subsidiary explained that the company sells Stocrin and Crixivan, two HIV/AIDS drugs, at a no-profit price in Thailand, "inclusive of custom duties, import duty, VAT, and...delivery costs." Sounds like Bangkok's levies, not Merck's profit motive, are helping push up drug prices.

The WHO's executive board next meets in May. Unless Director-General Chan and other officials start publicly supporting intellectual property rights, there's a good chance that Thailand's actions will be replicated elsewhere. That's not only bad news for pharmaceutical companies, but for everyone else who cares about drug innovation and public health.

070307
WJ070303

Copyright © 2007 - The Wall Street Journal. Reproduction of this article (other than one copy for personal reference) must be cleared through the WSJ Permissions Desk.

Always watch for outdated information. This article first appeared in 2007. This material is designed to support, not replace, the relationship that exists between you and your doctor.

AEGiS presents published material, reprinted with permission and neither endorses nor opposes any material. All information contained on this website, including information relating to health conditions, products, and treatments, is for informational purposes only. It is often presented in summary or aggregate form. It is not meant to be a substitute for the advice provided by your own physician or other medical professionals. Always discuss treatment options with a doctor who specializes in treating HIV.

Copyright ©1980, 2007. AEGiS. All materials appearing on AEGiS are protected by copyright as a collective work or compilation under U.S. copyright and other laws and are the property of AEGiS, or the party credited as the provider of the content. .