TRIPping Up Property Rights
IPN Opinion article
Wall Street Journal Europe
After years of campaigning, activists have narrowed the debate about health care in poor countries to a single premise: Patents drive up the cost of medicines, so patents are bad. Today this fallacy will gain a degree of institutional legitimacy as the European Parliament debates ways to undermine global intellectual property rules.
A handful of MEPs propose that the EU encourage governments in poor countries to issue "compulsory licenses" for patented medicines, revoking the patents and attendant rights -- such as collecting royalties -- that had been granted to a drug maker. The lawmakers also want the EU to exclude intellectual property rights (IPR) clauses from any future trade agreements signed with African, Caribbean and Pacific countries. Such a move would not only harm European pharmaceutical firms, but distract attention from the real causes of ill health in poor countries.
Thailand got this ball rolling. The interim military government there recently issued a number of compulsory licenses, citing flexibilities in the World Trade Organization's Trade Related Aspects of Intellectual Property Rights agreement, or TRIPS. The junta claimed that the prices of these drugs made it impossible to provide universal access to medicines for the Thai people.
The political brouhaha that followed took all eyes off the thing that mattered most: the state of the Thai health-care system, which was suffering from hospital closures and staffing shortages. Without hospitals and doctors, cheap drugs will do little good.
The problem with the Thai health system isn't money; vast amounts of aid are already on offer. The problem is bad governance and corruption. For example, the Global Fund awarded Thailand $133 million to manufacture its locally produced HIV/AIDS therapy, called GPO-VIR. Four years later, the money was withdrawn because the state drug maker failed to meet international standards.
Others have trodden this road. From 1972 India weakened its IP laws in hopes of driving down medicine prices. It certainly made some drugs less expensive, but it hasn't made Indians any healthier. Access to even basic medicines in India remains unacceptably low. Children go without routine vaccinations. Simple generic anti-infectives are out of reach of the majority of the rural poor.
This goes right to the heart of the medicine-access debate for Africa, too. In 2006, the director of the World Health Organization's HIV Division, Kevin De Cock, said "it is very obvious that the elephant in the room is not the current price of drugs. The real obstacle is the fragility of the health systems. You have health infrastructure that is dilapidated, and supply chains that don't exist."
If African health-care systems are to improve in a sustainable way, it is vital for their economies to grow. Today's European Parliament debate falls short here as well. MEPs are being urged not only to scrap IPR commitments from trade agreements with poor countries but, in some cases, to scrap free-trade agreements altogether.
That would be counterproductive in two obvious ways. First, tearing up these deals would undermine one of the best chances for economic growth these regions have. Second, IPR are a crucial guarantee that patients in poor countries will get high-quality, effective medicines. Many generic-drug manufacturers in countries with weak IP rights -- particularly India -- are reluctant to invest the money needed to bring their factories to international standards. Drugs that do not meet these stringent standards are likely to encourage mutated, drug-resistant strains of disease, which is particularly damaging for malaria or HIV/AIDS patients.
Emasculating TRIPS might allow the MEPs to stick it to Big Pharma, but it takes energy away from the things that really matter: infrastructure, doctors, nurses. Unless poor nations get these, we will still be having this debate in four decades' time.
Mr. van Gelder is network director, and Mr. Stevens health program director, at International Policy Network.