IHT ThaiDay - 5 January 2006
IPR debate centers on cheap drugs
By Daniel Ten Kate
The late Howard Aiken, who is credited with inventing one of the world’s first digital computers for IBM back in 1944, once said, “Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats.”
Though Aiken may be correct in some circumstances, other ideas, commonly known as intellectual property to trade negotiators, are considered much more valuable and worth protecting.
As technology makes information available at the touch of a keyboard, governments have moved to devise laws that weigh the need to encourage innovation while protecting the greater interest of the public at the same time.
“There must be a suitable balance between enforcing intellectual property rights (IPR) to encourage investment and disseminating information that can benefit the public,” Chanchai Likhitjitta, president of the Supreme Court, told a recent seminar on IPR. “The crucial question is: where do we draw that line?”
That heated debate is one of the sticking points in the free trade agreement (FTA) negotiations with the United States, which are scheduled to resume next week. And though IPR covers a wide range of goods and services, from the entertainment industry to agricultural products to traditional knowledge, the sector that is of most concern to both governments is the pharmaceutical industry.
The US wants the FTA with Thailand to go beyond what the government already signed up for in the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights, commonly known as TRIPS.
Specifically, the US wants an extension of patent protection to 25 years from the 20 agreed to in TRIPS, as well as stronger laws to protect “data exclusivity,” the period in which drug manufacturers cannot rely on the data of the brand-name drug to register a generic equivalent.
That has the effect of delaying when cheaper generic drugs can reach the market. If generic drug manufacturers do not have access to data, they must essentially reinvent the wheel, and use sick patients to do so.
US trade negotiators have argued that data exclusivity allows pharmaceutical companies to “more fully protect the existing life span of a patent.” But critics, including some US senators, have said the measure only prevents developing countries from quickly accessing cheap drugs.
“With data exclusivity, companies will have to do more and more experiments to arrive at the data, and it has nothing to do with patents,” said Lerson Tanasugarn, a Chulalongkorn University law professor who has advised the Thai government on IP issues in the FTA talks with the US.
“It’s not so much about the price of drugs going up,” he said of the concerns over IPR. “It’s more about the price not coming down fast enough.”
Researchers from Chulalongkorn have called on Thai negotiators to reject the introduction of data exclusivity and extend the life of patents beyond TRIPS requirements. They argue that an FTA should not impose any obstacles that might threaten public health, and call on the government to implement compulsory licenses for anti-retroviral drugs.
“The extension of patent life to compensate for up-front administrative or regulatory delays in granting the original patent must not be accepted at all,” wrote Jiraporn Limpananont and Vithaya Kulsomboon, two professors in Chulalongkorn’s pharmaceutical sciences faculty, in a recent report. “Since the patent life of 20 years in Thai patent law started from the application filing date, so the delays in granting the original patent do not shorten this patent life and do not affect the rights of the patentee.”
The US argues that stronger IPR enforcement would help rid the market of potentially dangerous fake drugs, and create an environment where more research and development-based manufacturers would be willing to set up shop in Thailand. It also argues that the FTA will lower drug prices.
“If anything, drug prices will come down because the 10-percent tariff on pharmaceutical products will be gone,” said a US government official, speaking on condition of anonymity. “That basically acts as a flat tax on sick people.”
Some doubt, however, that Thailand would see many benefits in strengthening its IPR regime. The country’s economy is not as knowledge-intensive as that of Singapore, whose bilateral FTA with the US in 2003 has become the foundation for the current negotiations between the US and Thailand.
“It is highly questionable that such TRIPS-plus provisions are in Thailand’s interest,” wrote Razeen Sally, a professor at the London School of Economics, in a recent study on Thailand’s bilateral trade negotiations. Since Thailand is a developing economy, it has no comparative advantage in inventions. But with a TRIPS-plus deal, the country’s generic pharmaceutical industry would be at risk, Sally wrote.
Furthermore, the researcher found, the long-term benefits “such as attracting IP-related FDI are speculative (to say the least), but short-term losses would be real and immediate. These would include the costs of overhauling legislation and beefing up the enforcement of laws and regulations - at a time when the legal system is already overburdened.”
Finally, most concerns and protests surrounding intellectual property rights focus on the government’s ability to issue compulsory licenses to override patents and produce cheaper generic drugs to fight such public health emergencies as HIV/AIDS, malaria and tuberculosis. US officials, including Deputy Secretary of State Robert Zoellick, have repeatedly said that access to cheap antiretroviral drugs would not be affected by the bilateral FTA. But some are holding their applause until they see that the fine print of the trade pact does not limit the government’s ability to issue compulsory licenses as the WTO agreement specifies.
“The USA has given assurances that the Doha Declaration on TRIPS will be respected, but the issue remains to be clarified in negotiations,” Sally wrote in his report. “Thai unease is perfectly understandable.”