Politics & Policy

What Patent Problem?

Dr. Amir Attaran asks--and answers--the question.

As the world’s health experts gather in Geneva today for the World Health Assembly, it is time to assess the main AIDS debate that has raged for all of this decade. Without clarity on the problems of the spread of HIV AIDS there can be no hope of a solution.

Amir Attaran, a fellow with the Royal Institute of International Affairs (and a board member of my own organization, Africa Fighting Malaria), has for the past four years done his best to provide light to an otherwise heated debate. Specifically, he has exposed the various fallacies of anti-globalization public-health activists who attempt to undermine the patent system for the sake of manufacturing and exporting generic drugs. He has also done his best to expose the hyper-sensitivities of the pharmaceutical industry. His recent analysis of drug-patent exploitation in developing countries, published in the May-June issue of Health Affairs, does both. In it Attaran points out that patents have rarely been a problem for drug consumers in poor nations; in fact, only 1.4 percent of the WHO essential-drug list is on patent in the poorest 65 countries. Because of this fact, Attaran concludes that “poverty, not patents, imposes the greater limitation on access.” At the same time, he also points out that the patent system is not as likely to be undermined as pharmaceutical companies might believe or imply.

Dr. Attaran’s argument should squash once and for all demands for compulsory licensing of patented medicines in most poor countries. (Compulsory licensing is a legal procedure that allows the overriding of patent rights so that generic medicines can be produced and sold in countries that lack the capacity to manufacture them themselves.) His analysis should also make largely irrelevant the Doha declaration, made at the World Trade Organisation Ministerial meeting in November 2001, which established the notion that the poorest countries should, in principle, be able to import drugs from generics companies in countries that do not (albeit legally) respect the drug patents of Western companies.

The key difficulty in passing this declaration was agreeing on what should constitute the poorest countries and which diseases should be covered. There was widespread disagreement as to whether ‘poor’ should include just the poorest countries (known collectively in U.N.-speak as less developed), or should be expanded to include all countries except the non-OECD members. The U.S. and most European nations wanted just the poorest nations included. But the U.S. was isolated on the disease scope. Most countries did not want the list of diseases covered to be restricted to the ‘Global Fund’ diseases of AIDS, tuberculosis, and malaria; the U.S. alone pushed hard to confine the list to this group.

Dr. Attaran was convinced that the U.S. trade representative, impelled by the pharmaceutical industry, was wrong to make such a fuss about the scope of diseases covered. Attaran’s analysis shows that there has been no compulsory licensing of Western medicines in developing countries, although the legal right to do so has been agreed upon in international law for decades. He says that “the threat is not credible” that poor countries are going to engage in much undermining of the patent system.

“There are absolutely no economically important pharmaceutical markets that have insufficient or no manufacturing capacity, and therefore, no important pharmaceutical markets are affected by the Doha Declaration,” he says. With the notable and tiny exceptions of Lichenstein and Luxembourg, all developed countries have the capacity to manufacture most pharmaceuticals. Furthermore, most key poorer country markets–such as Brazil, China, Egypt, India, Mexico, South Africa, and Thailand–have the capacity, too. “In fact, compulsory licensing is so extraordinarily rare that it has not been used once in the last decade by any country in respect of a finished medicine. This is a striking omission from the trade discussions, compulsory licensing is not practical.”

Attaran says the reason for much of the heat–and not light–on the issue in international-trade negotiations is because the anti-globalization activists’ primary goal is not public health in poor countries but compulsory licensing in developed-country markets. In other words, the activists wilfully conflate their true desire (e.g., for Canadian generic drugs to have full access to American markets) with their phoney claim to want to help the world’s poor. “The anti-globalizers have expended enormous effort on this (often with the help of too-trusting public health activists and scholars) and yet by any objective measure of success–such as the number of generic medicines manufactured under compulsory licences, the number of patients treated using those medicines, or the dollars of pharmaceutical sales lost to compulsory licences–the effort has been fruitless,” Attaran concludes.

Speaking last year, Attaran was at a lost to know why the drug industry, faced with the facts, continues to push such a hard line on the issue. He thinks it was because they were fixated with law rather than diplomatic, political, and attitudinal realities. “Simply put, it is now a custom that countries aspiring to the polite society of globalization never compulsorily licence medicines. Certainly they may threaten it, as Brazil sometimes has when rattling sabres and bargaining with pharmaceutical companies, but they never actually do it–the velvet handcuffs of international custom and comity are that strong.” Set against this reality, the Doha declaration is a legal technocrat’s dream. It cannot change international custom. It is therefore powerless to threaten the pharmaceutical industry.

But industry seems to have learned some lessons in the past six months. It is now staying quiet and getting on with developing and even delivering drugs to the poor. One cannot say the same for the activists; they have not been silenced. They now claim that patents will be a problem in the future, ignoring that for the past five years they were wrong when they said patents were causing a problem. Their political allies like Senator Kennedy are trotting out their arguments, but Dr. Attaran’s research has seriously dented their claims, and for that he is to be congratulated.

Dr. Roger Bate is a visiting fellow of the American Enterprise Institute and a director of Africa Fighting Malaria.

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