IP Disputes in Medicine

Sunday, January 28, 2007

PhRMA Lies and Distortions - Thai Compulsory Licenses

by Brook Baker

PhRMA lies and Distortions - Thai Compulsory Licenses
Professor Brook K. Baker, Health GAP
January 26, 2007

Pursuant to Big Pharma's persistent strategy to distort key access flexibilities in the TRIPS Agreement, PhRMA's (US) junior partner trade association in Thailand has once again misrepresented the grounds upon which compulsory licenses can be granted under international law and the circumstances under which prior negotiations must be conducted. In response to Thailand's new announcement of compulsory licenses for a second HIV/AIDS medicine (Kaletra) and a first heart medicine, Teera Chakajnarodom, president of Thailand's Pharmaceutical Research and Manufacturers' Association (comprised of 43 national and multinational R&D drug companies), said the Thai government is using an overly broad definition of an emergency. "The law allows such actions with pharmaceutical products only in cases of extreme national emergencies, or during wartime, and only after negotiation with the companies concerned," Teera said, adding, "It is a provision in the law that has to be used judiciously and with extreme caution if one is not to undermine the confidence of the investment community." (AFP/Yahoo News, 25/1/07.)

Contrary to this absurd claim, Article 31 of the TRIPS Agreement allows issuance of compulsory licenses and government use orders without prior negotiation with patent holders for "emergencies or matters of extreme urgency" and/or for "government, non-commercial use." The Doha Declaration has previously clarified that AIDS can and should be considered an emergency, and recent publications from WHO document the growing crisis of chronic disease, especially cardiovascular disease and diabetes, in developing countries. Not only is Thailand free under WTO rules to determine what it considers to be a public health emergency or matter of extreme urgency, it is also permitted to issue a compulsory license (or government use order) for non-commercial government use. Thailand's announcement clearly states that the medicines are to be used in the context of its national treatment programs, erasing any doubt that the no-negotiation, non-commercial use provisions apply.

No longer content to argue that compulsory licenses are limited to emergencies, PhRMA now wants to argue that they are limited to "extreme" emergencies, like those arising in wartime. Similarly, contrary to absolutely clear language, PhRMA wants to argue that its ability to threaten, cajole, procrastinate, or bribe is being curtailed by Thailand's unfair refusal to engage in prior negotiations. We can expect that PhRMA's next claim will be that compulsory license can only be issued in contexts of intergalactic warfare and that compulsory license applicants and/or governments must spend 100 years in purgatory negotiating with PhRMA lawyers before a C.L. can be issued.

PhRMA's arguments are preposterous enough if they weren't continually reaffirmed by a misinformed press that simply refuses to report that compulsory licenses can be granted on any terms whatsoever. This collusion by the press is partially traceable to the U.S. also continuing to misrepresent the grounds upon which compulsory license might be granted.

Because the legal content of the US/PhRMA critique is so weak, they both fall back on veiled threats concerning direct foreign investment, as if drug companies make their manufacturing siting decisions and their product launch decisions primarily on the basis of IP rights and enforcement provisions in developing countries. PhRMA has consolidated its manufacturing in large plants and sets up local affiliates primarily for marketing and distribution purposes. It will sell its products wherever it finds market access profitable. Accordingly, the investment threats are also hollow.

Thailand should be praised, not mispresented, for its pro-health determination to actually use flexibilities which heretofore most developing countries have been unwilling to use because of US and PhRMA pressure. More countries should follow its example, especially with respect to access to lower-cost second-line medicines which will be crucial in the long-term campaign to use anti-retroviral therapy to extend the promise of life.


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