We need a new drug (system)

Brazil vs. the Drug Lords; a showdown at the IP corral

Published January 13, 2006 11:40PM (EST)

IP-Watch reports today the startling news that a World Health Organization commission on intellectual property rights "failed to meet its deadline" for presenting a report to the WHO executive board this month. The ostensible reason: disagreement among the members of the commission.

OK, OK, I'm kidding. There is nothing at all startling or surprising about this news. In the awesome bureaucracies of institutions like the World Health Organization or the World Trade Organization, nothing ever happens on time. Consensus-building is hard work -- especially when the topic at hand is the issue of how patents affect poor people's access to drugs. And especially when some of the "stakeholders" involved will do everything in their power to thwart meaningful progress.

The WHO Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH) was established in February 2004 "to collect data and proposals from the different actors involved and produce an analysis of intellectual property rights, innovation, and public health, including the question of appropriate funding and incentive mechanisms for the creation of new medicines and other products against diseases that disproportionately affect developing countries..."

Translated into plain language, the commission was entrusted with the job of coming up with proposals on how to balance the desperate need of poor people in poor countries to gain access to expensive drugs, without at the same time trampling over the intellectual property protections that ensure that drug companies have the profit incentive to spend the billions of dollars necessary to create new drugs.

The conflict at the heart of this problem is probably the hottest hot button in the global struggle over intellectual property. In contrast to pirated DVDs of Hollywood movies or reverse-engineered semiconductor chip designs, there is a clear moral aspect to the challenge of dealing properly with sick people who will die because they can't afford a state-of-the-art protease inhibitor for HIV treatment.

In another news report this morning, "Pedro Chequer, head of Brazil's HIV/AIDS program, on Thursday told attendees at a Latin American conference -- which was aimed at discussing strategies on providing access to treatments for HIV/AIDS and other sexually transmitted diseases -- that countries unable to afford antiretrovirals should consider breaking foreign patents and producing the drugs."

Chequer's words embodied no idle threat, and underscored the importance of what the WHO Commission has been tasked with. Brazil is a standard-bearer for the growing number of developing countries that are impatient with patent pressure from rich nations. Brazil has a National AIDS program that guarantees universal access to medicine and treatment. But the high cost of AIDS drugs is a heavy burden to bear, especially when generic versions of those drugs are easy to manufacture for a fraction of the price. Two-thirds of Brazil's Ministry of Health AIDS budget is spent on just three drugs made by Merck, Abbott Laboratories and Gilead Sciences.

Last summer, Brazil precipitated a major patent firestorm when it told Abbott that unless the company lowered its price for Kaletra, a cocktail of protease inhibitors, it would declare a national health emergency and manufacture its own generic versions of the drug, while paying only a minimal royalty. After several months of intense negotiations, Abbott finally gave in, and cut its prices.

For defenders of intellectual property rights in the United States, Brazil's behavior was out-and-out thievery, motivated not by concerns over social justice, but by a desire to establish its own indigenous generic drug industry. Having achieved that, Brazil would then turn around and "fence its stolen goods" to countries in Africa and elsewhere.

Such rhetoric tends to ignore the fact that poor people are dying by the millions around the world because of their lack of access to drugs. But Big Pharma does have an indisputable point. It costs an awful lot of money to successfully develop a new drug. It costs very little to copy an already developed drug. If intellectual property protections didn't exist, why would an Abbott or a Merck bother to create new drugs?

The obvious answer to that is: It isn't the role of private companies to act according to the dictates of social justice concerns. That role properly belongs to government. There must be ways for government to come up with solutions that protect the profit incentive and provide for the needy. The IP-Watch report this morning noted that the CIPIH commission had a Web site that accepted submissions with proposals on how to deal with their mandate. The site is a mother lode of papers that merit long hours of study and reflection. But one in particular caught my eye, "Patents and Essential Medicines: An Application of the Green Intellectual Property Project."

The paper, written by Itaru Nitta, of the School of International Service, American University, suggests a kind of patent insurance fund financed by "reserves, taxes, and premiums" in the patent system itself. This pool of money could then be drawn upon to subsidize access to medicine in developing countries.

The money would come from the fees paid to various patent offices for the processing of patents, from the revenue flow that patent holders derived from royalty payments and infringement compensation, and directly, as a kind of insurance premium from the patent holders. According to the abstract for the paper, "while allowing impoverished nations to access essential medicines ... the system would ensure patent incomes for patent beneficiaries [and] would increase pharmaceutical companies' incentives to develop medicines for poverty-related diseases even when the medicine's users do not have sufficient financial means."

It's a clever idea, although naturally Big Pharma would fight it tooth and nail as an additional cost placed upon their business. Then again, one could argue that if a good solution to the problem isn't found, developing nations like Brazil and India will go ahead with their production of generics and there won't be any money to be made by anyone.

Personally, I'm just beginning to delve into the intricacies of the international intellectual property regime and I can't say with authority whether Nitta's proposal has any likelihood of working. But too often, questions such as the conflict between social justice and the profit incentive are seen as irreconcilable. That can't be accepted: There's always a workaround.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Related Topics ------------------------------------------

Aids Brazil Drugs Globalization How The World Works Intellectual Property Latin America