How embarrassing. Anyone who has paid attention to this blog knows that two of my recurring obsessions are Big Pharma and Taiwan. In their own ways, both provide ample fodder for tracing the interconnections -- intellectual property, technology, economic development, trade, etc. -- that lace the global economy together. But I did not realize until today how closely my favorite island nation and the international pharmaceutical industry are themselves bound together -- on one of the most hotly debated battlegrounds of globalization.
I've noted here before that, under the rules of the World Trade Organization, in the case of a health emergency a nation can issue a "compulsory license" that allows it to manufacture generic versions of a patented drug, without permission from the patent holder. I've written about how Brazil has successfully used the threat of a compulsory license to get Abbot Laboratories to lower the price of its HIV drug Kaletra. But I was blissfully unware that Taiwan was actually the first country in the world to go ahead and issue a compulsory license. In November 2005, Taiwan's government issued a license to allow local companies to manufacture generic versions of Tamiflu -- the only drug in the world considered effective in combatting the effects of bird flu.
To date, Taiwan has recorded no cases of bird flu, but according to health authorities, it lies squarely in the path of migrating birds from China. There is also massive human traffic between Taiwan and China. Therefore, Taiwan considers itself on the front lines of a potential bird flu pandemic. The Swiss drug company that owns the rights to Tamiflu, however, has been having difficulty supplying enough Tamiflu for the rest of the world. Unsure that Roche would be able to live up to its promise to provide enough Tamiflu to cover a sufficient percentage of Taiwan's population, Taiwan decided to plunge ahead.
At the time, Taiwan's health authorities stated very clearly that the purpose of the compulsory license was only to stockpile enough Tamiflu to protect against an outbreak of bird flu. But today comes the news, via Biotech East, a company that "provides a range of online and offline services to the life science community" in Taiwan (thanks to IPhealth for the alert), that local media in Taiwan are reporting about a move to amend Taiwan's patent laws to allow the export of its generics to other nations.
"The Intellectual Property Office of the Ministry of Economic Affairs, the Ministry of Foreign Affairs, the Department of Health (DOH) and the Bureau of Foreign Trade together reached an agreement on the amendment to Article 76 of Taiwan's Patent Law, regarding so-called 'mandatory authorization,'" writes Biotech East president David Silver. "The new provision will relax regulations on drug exportation, so that upon the request of poorer countries, local drug companies may manufacture and export drugs to those countries without the consent of the patent holders, usually Big Pharma. As such, these medicines would be available at a much cheaper price than their authorized versions."
"This amendment seems custom-designed to allow companies which are making generic Tamiflu for Taiwan's DOH under compulsory license conditions to make extra money from their participation in the project. And it seems to contradict the DOH's earlier statement made when it was enacting compulsory licensing conditions in November 2005, when it said that any Taiwan-made generic Tamiflu was strictly for local use only and would not be exported to any other country."
If this news is true, it is extraordinary for several reasons:
1) Taiwan fought long and hard to outgrow its reputation as a reckless intellectual property high-tech pirate. Today, its top technology corporations are respected members of the international high-tech world order -- just as likely to sue companies in the West for I.T. transgressions as to be themselves sued. For Taiwan to go head to head with Big Pharma displays remarkable chutzpah, and risks that hard-won status.
2) Taiwan isn't famous for its biotech industry, but the government has been pushing development in that sector for years, and the fact that domestic companies are now capable of manufacturing generics is a sign that, just as was the case in the computing industry, government intervention is paying off.
3) Because of mainland Chinese opposition, Taiwan is not a member of the World Health Organization. This has led one observer to suggest that Taiwan issued the license because it was afraid that, should disaster hit, it wouldn't get a quick response from the WHO. Similarly, there is a theory that Taiwan is actually trying to boost its diplomatic profile by positioning itself as a nation that can come to the assistance of other poor countries should they be faced with health emergencies.
4) But whatever gains Taiwan generates with developing nations, it will lose with the developed world. In fact, as a public relations strategy, any effort to change the patent law will play right into the hands of Big Pharma's defenders, who are probably already screeching about how the compulsory license loophole is just a way for developing nations to circumvent intellectual property laws while they make money selling cheap drugs abroad.
I'm not sure what to think, and with only one available English-language source on the proposed patent law changes so far, I definitely want to know more. But I do know that should the much-dreaded bird flu actually break out in a global pandemic, we're going to want all the Tamiflu we can get. It's comforting to think that Taiwan might be able to help deliver the goods.