Note: This summary of the March 25-27, 1999 Geneva meeting on compulsory licensing of essential medical technologies was prepared by Nathan Ford and Daniel Berman of MSF.
"As a public health worker in the developing world, I feel like a child being told by the developed world 'do as we say and not as we do.'"
Professor Krisantha Weerasuriya University of Colombo, Sri Lanka
On March 26, 1999 more than 120 delegates from 30 countries met at the Palais des Nations in Geneva to examine compulsory licensing as one potential strategy to confront the growing crisis of access to essential medicines in the developing world. This crisis leaves millions suffering and vulnerable to curable or treatable disease.
The HIV/AIDS pandemic illustrates the magnitude of the problem. Twenty six of the estimated 33 million people infected with HIV globally live in Sub-Saharan Africa and have virtually no access to antiretrovirals. Their cost puts them out of reach to all but a small fraction of people in Africa. The situation is similar is South East Asia where at Bamrasnaradura hospital in Bangkok only 20 out of 2000 patients who seek treatment each month can afford the triple drug cocktails that have become standard of care in developed countries.
Medicines for other life-threatening diseases such as tuberculosis, malaria, and meningitis are equally out of reach to millions of inhabitants of the developing world. In the case of TB, most of the 100,000 people suffering from multi-drug resistant strains are unable to afford the new standard combination treatment which is priced at approximately $15,000 per course. Both local and NGO (non-government organisation) physicians work daily with the knowledge that high drug prices mean that a significant portion of their patients are dying unnecessarily.
At the Geneva meeting, NGO, national government, international organisations, and industry delegates looked at the practical considerations of using compulsory licensing, which allow legal suppression of drug patents, as a means of making drugs more affordable in poor countries. Compulsory licensing, a feature of the new TRIPS Agreement (Trade-Related Aspects of Intellectual Property, a part of the World Trade Organisation agreements) has been historically used by countries to serve the greater good of society by restricting the monopoly rights of patent holders.
"This initiative is neither in conflict with TRIPS, the cornerstone of the WTO's provisions on intellectual property, nor any other multilateral agreement on trade or intellectual property" said James Love of the Consumer Project on Technology. "We are urging countries to use provisions in TRIPS for compulsory licensing so that people in developing countries can have access to modern essential treatments."
Lower prices in developing countries would not be a serious threat to research and development funding because they account for a small percentage of overall pharmaceutical sales. Africa, for example, accounts for only 1.3 percent of the global drug market. Compulsory licensing finds its legal basis in Article 31 of the TRIPS agreement. The agreement says that Member States may "use the subject of a patent without the authorisation of a right holder, including use by the government or third parties authorised by the government" when justified by the public interest. Article 31 also says that "the right holder shall be paid adequate remuneration...taking into account the economic value of the authorisation."
Although, according to a statement released before the meeting, the US government "does not generally support the compulsory license of patents...and regards compulsory licensing as unnecessary" it has liberally applied this tool in its own domestic market in hundreds of cases. Licenses on patents have been granted in diverse fields including biotechnology, pharmaceuticals, aerospace, military technology, air pollution, computers, and nuclear energy. The US has traditionally used compulsory licenses to counteract anti-competitive practices and a significant number have been granted royalty-free. In addition, many have been authorised for non-commercial government use.
"We acknowledge that our position is more restrictive than the TRIPS agreement but we see TRIPS as a minimum standard of protection, " said Lois Boland of the US Patent and Trademarks Office.
Delegates at the Geneva conference condemned the US's use of bilateral pressure tactics to implement its policy of pushing for domestic laws that forbid the use of compulsory licenses. The case of Thailand clearly demonstrates the US's multifaceted approach to protecting the patents of its national pharmaceutical manufacturers.
Conference presenters from Thailand described pressure tactics that the US government has used to ensure that Thailand would not produce or import low cost AIDS drugs or any other life-saving patented drugs. In 1993, under US urging, Thailand adopted a law banning parallel imports, which allow the importation of drugs to one country from another where the patent holder sells the identical drug at a lower price. Parallel imports are widely used by many countries including the United Kingdom and the Netherlands to bring down the cost of drug therapies.
Trade pressure against Thailand was most recently stimulated by the government's attempt to begin producing the anti-HIV drug ddI. The government was planning to offer people with AIDS at least one low-tech double therapy combination (AZT/ddI) at an affordable price. Currently, ddI is exclusively marketed by Bristol-Myers Squibb at a monthly cost of $166. Since July, 1997 the daily minimum wage in Thailand has been frozen at $4.50.
Thailand dropped its ddI plan when it was threatened with trade sanctions on some of its key exports. This threat came at a time when the Thai economy was reeling from the widespread South East Asian financial crisis. Thai physicians and patients were particularly outraged when they discovered that ddI was invented by the US government and is licensed on an exclusive basis to the US drug manufacturer Bristol-Myers Squibb.
In addition, last summer the US stimulated a Thai legislative bill, expected to be signed into law soon, that severely restricts the use of compulsory licenses. Under the urging of US trade officials, Thailand will implement a law that is much more restrictive than the rules set out in the TRIPS agreement, the internationally accepted standard.
Unlike the current situation in Thailand, the Indian drug industry is a good example of what happens when companies are given the authority to produce drugs for the local market without paying daunting licensing fees. Under TRIPS, compulsory licenses could be granted to produce essential medicines to treat life-threatening diseases, mimicking the currently unregulated system in India. Currently, Lariam, a treatment for Malaria costs $37 in the US and $4 in India while the AIDS treatment AZT cost $239 per month in the US and $48 in India.
Michael Scholtz, the executive director of the Health Technology and Drug Cluster at WHO (World Health Organisation) pledged his support to developing countries. "WHO respects the importance of patents and understands their role in both the developed and developing countries. However, we now have a mandate to consider the public health implications of implementing the TRIPS agreement," said Scholtz.
The organisers agreed that WHO should take a lead role in assisting countries in analysing the pharmaceutical and public health implications of WTO agreements. "Developing countries that have applied TRIPS have not made full use of the flexibility of international trade law either because of lack of knowledge of their rights or because of pressure from the west" according to Bas van der Heide of Health Action International.
Conference presenters advised delegates from developing countries to inquire about the status of their domestic law provisions for compulsory licenses and parallel imports and lobby to change laws if they are more restrictive than the TRIPS agreement demands. They also pointed out that if domestic governments request it, technical assistance to become TRIPS compliant is available from WIPO (World Intellectual Property Organisation).
With the support of WHO, WTO, WIPO and NGOs, conference delegates plan to return to their countries and demand that their national governments use existing and legal means to increase the supply of affordable essential drugs. If price is a criteria for inclusion on national essential medicines lists, then the international community must find a way to bring down the cost of key drugs in developing countries.
"Ultimately, the right of a country to safeguard the health of its citizens partly depends on access to essential medicines and we must focus on improving this access," said Bernard Pecoul of Médecins Sans Frontières.
Medical professionals in the developing world refuse to accept the fact that their patients are dying because multinational pharmaceutical companies, with the help of their national governments, are distorting international trade law to keep the price of essential medicines high in developing countries.
The Geneva meeting was made possible by the generous support of the Rockefeller Foundation.
Note: For more information on the consequences of the WTO and TRIPS agreements on access to medicines see the WHO publication: Globalization and Access to Drugs, Perspectives on the WTO/TRIPS Agreement, Health Economics and Drugs DAP Series No. 7 revised. More information on Compulsory Licensing can be found at www.cptech.org/march99-cl/