National Working Group on Patents Delhi meeting

[Guest guest]

This is an account of a June 4 meeting in Delhi,

sponsored by the India National Working Group on

Patents and MSF. It presents a bit of a

false difference between MSF and CPTech, over the

TRIPS, since I think that both groups believe that

countries need good models for state practice, and

that TRIPS, as it relates to public health, should be

replaced with a treaty that deals directly with R & D.

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http://www.indiaserver.com/thehindu/2001/06/14/stories/0614000l.htm

Online edition of India's National Newspaper on

indiaserver.com Thursday, June 14, 2001

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Drug patents in TRIPS: Two alternatives

Next week the World Trade Organisation will convene a

special session of its general council to discuss one

particular issue - the agreement on Trade-Related

Aspects of Intellectual Property Rights (TRIPS). This

meeting, convened at the instance of a number of

African countries, is not one that will result in any

changes to the agreement. But it is yet another

expression of global sentiment that TRIPS comes in the

way of affordable drugs. Over the past year a number

of

public campaigns have considerably embarrassed

multinationals for the prices they charge for

HIV/AIDS medicines. As Dr. Orbinski of the Nobel

Peace Prize-winning organisation, Medicins Sans

frontieres (MSF), describes it, a global coalition of

citizens' groups has been successful in making a

morally compelling argument about how the patent

regime stands in the way of affordable health

treatment.

But what options do the developing countries have to

make institutional changes in TRIPS? A symposium on

``TRIPS and Access to Medicines,''

jointly organised by the National Working Group on

Patents and MSF in New Delhi last week saw doctors,

scientists, lawyers, industry representatives and

activists from India and abroad articulate two broad

sets of arguments: one was to demand a fundamental

review and renegotiation of TRIPS while the other

suggested that the existing agreement provided

sufficient flexibility to prevent abuse of the

monopoly rights contained in patents and it is that

governments must make use of.

To take the second argument first an influential body

of opinion has been making the point that there are a

sufficient number of provisions in TRIPS which the

developing countries can use to permit domestic

industry to produce medicines at affordable prices.

Foremost among these is Article 31 that covers

compulsory licensing (CLs) of patents - the

provision for governments to license patents to a

third party for production with or without payment to

the patent holder. In the TRIPS agreement, CLs can be

issued on a number of grounds the more important

of which are public health emergencies and

anti-competitive practices of the patent holder.

Mr. Love of the Washington-based Consumer

Project on Technology who participated in the seminar

has consistently argued that (i) The advanced

countries freely use compulsory licensing to prevent

abuse of patent rights in a number of areas. For

example, in the U.S. such licences were even issued

last year for tow truck technologies. But the

developing countries are yet to utilise the potential

of compulsory licences because they have not put in

place the necessary institutions.

(ii) What are needed are good state practice models

that governments can adopt for issue of CLs. These

should have strong provisions with little ambiguity

about when CLs can be issued, the rules would be easy

to administer, explicit about royalty rates to be paid

to the patent holders and not easily litigated or

manipulated by large pharmaceutical companies that are

``masters of IPR litigation and routinely misuse

regulatory and IPR laws, exploit loopholes and harass

competitors in the courts.''

While this is an attractive argument for governments

which feel cornered by the TRIPS agreement, the point

s that no developing country has to date really used

the TRIPS provisions on CLs, so one can only guess

how

the global pharma industry will react and how the WTO

dispute panels and the Appellate Body will interpret

the existing provisions. The multinationals have shown

- in South Africa and Brazil - that they will

not go along with attempts to arrange parallel

imports. They may have retreated in South Africa but

the Brazilian case is now going through

the WTO dispute process. Compulsory licences are

also surely to be fought tooth and nail by the

multinationals.

At the Delhi workshop the case for re-negotiation of

TRIPS was articulated by Dr. Amit Sengupta of the

Delhi

Science Forum, who among other things pointed to the

``rent incomes'' conferred by the patent regime on the

multinational drug companies. The monopoly rights

that

stemmed from patents made the profitability in this

industry the highest in the world. Second, outlays on

research and development in the global companies were

less than on promotional activities.

Third, R and D in the global pharma industry was

concentrated on the development of ``blockbuster''

drugs - not medicines needed to treat the diseases

affecting the larger population but drugs which would

have the widest and most profitable sales in the West

the so-called ``lifestyle'' drugs).

A telling statistic in this regard is that only seven

of the 2,257 new drugs introduced between 1981 and

2000

involved major therapeutic innovation where

previously no treatment was available.

However, even if the advanced countries agree to

renegotiate TRIPS the eventual outcome is unknown even

if today the multinational drug firms are on the

defensive. There is the possibility that the end of

the negotiations will not result in a weaker pact but

a stronger one like the so-called ``TRIPS-plus''

model favoured by the U.S., one in which the freedom

to issue CLs will be plugged and the existing

flexibility excised from the agreement. An awareness

of this risk perhaps prompted Mr. Dilip Shah of

the Indian pharmaceutical Alliance to argue in the

symposium that unfair as TRIPS is, the Indian

industry would prefer to stay with the agreement

and make the best of it.

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