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Drugs for the Poor and Patents as Well
International Herald Tribune
Thursday, February 22, 2001
year malaria, tuberculosis and AIDS kill around 6 million
people, almost all of them in the developing world. These
premature deaths are a reproach to us all. They are also
a huge blow to countries hopes for development.
Urgently, more needs to be done to save the lives of
millions of poor people.
Part of the problem is poor countries lack of
access to drugs. The poor cannot afford expensive
medicines. Keeping an AIDS patient alive for a year can
cost up to $15,000 24 times the average annual
income in Zimbabwe, where one in four adults is
Critics of the World Trade Organization say its agreement
Aspects of Intellectual Property Rights (TRIPS)
makes matters worse. They argue that by requiring
developing countries to enforce pharmaceutical patents,
the agreement enables drug companies to charge exorbitant
prices that the poor cannot afford.
Clearly, we need to find new ways of improving access to
existing drugs in developing countries. But we also need
to give pharmaceutical companies an incentive to develop
new drugs. Industry puts the average cost of developing a
new drug at around $500 million. Were it not for a patent
system that rewards companies for risking millions on
research, anti-AIDS drugs would not exist.
That is why the TRIPS agreement tries to strike a healthy
balance between the short-term need to make vital drugs
available to those who need them and the long-term,
equally vital need to encourage research into new drugs.
To reward research, the agreement protects patents for 20
years (although, since it usually takes years to test and
approve new drugs, a patents effective life is much
shorter). To improve access to drugs, it imposes some
conditions and allows certain restrictions on patent
For one thing, patent holders have to disclose their
invention. This allows others to use information about a
patented drug to research new drugs during the
patents life, and ensures that it is truly in the
public domain once the patent expires. Second, if a
patent holder refuses to license a patented drug on
reasonable commercial terms, a government is allowed to
license it to other companies or use it itself without
the patent holders authorization, so long as
adequate compensation is paid.
Third, as a recent WTO panel has concluded, governments
can facilitate the early working of patented
pharmaceuticals by generic competitors. Fourth, if
governments authorize parallel imports of a patented drug
from countries where it is sold more cheaply, this cannot
be challenged at the WTO.
Developing countries have generally had to enforce the
TRIPS agreement since Jan. 1, 2000, when a five-year
transition period ended, but those which do not already
provide patent protection for pharmaceuticals have until
2005 to introduce it. The transition period for
least-developed countries ends in 2006 (with the
possibility of an extension).
But most developing and least-developed countries already
grant patent protection for pharmaceuticals. For them,
the real significance of the TRIPS agreement may be less
the requirement to protect new drugs and more the
explicit enshrining in international law of the
flexibility I have described.
One promising idea is differential pricing;
pharmaceutical companies would charge less for drugs in
poor countries than in rich ones. This is consistent with
the TRIPS agreement and is backed by, among others, the
World Health Organization, the European Commission,
Médecins sans Frontières and some industrialists. It is
already starting to happen. The WTO and WHO secretariats
are organizing a workshop to explore how it could become
more widespread. Important issues are how to prevent
low-priced drugs from leaking back from poor countries to
rich ones and how to convince rich-country consumers and
taxpayers of the fairness of lower prices in poor
countries. Of the 300-odd drugs deemed essential by the
WHO for basic health care in developing countries, fewer
than 20 are under patent protection anywhere.
There are no effective treatments for some ills that
affect people in poor countries only, because developing
them is not commercially viable. Only 10 percent of
global research funds target diseases that affect the
poorest 90 percent of the worlds population. Donors
urgently need to stump up funds to finance research, for
instance, into vaccines against malaria and AIDS.
Funds are also needed to ensure that companies have a
credible market for new drugs and vaccines that they
develop for such diseases, as well as to help pay for
existing essential drugs, insecticides and anti-malaria
Nor should providing the basics, such as clean water,
good sanitation, better nutrition and more condom use, be
neglected. Lower tariffs and taxes and more efficient
distribution channels are also important.
Most of this is outside the WTOs remit. But by
promoting free trade we can make a difference. Openness
is essential for economic growth, which can help pay for
health care and sanitation.
The writer is director-general of the World Trade
Organization. He contributed this comment to the
International Herald Tribune.
Copyright © 2001 The International Herald Tribune