Thailand’s “War on Drugs”

Thailand is at war, with battles taking place on several fronts. Over
600,000 people in Thailand are infected with HIV and the government is
fighting the epidemic by administering HIV treatment and medication
through its universal healthcare system.

But HIV drugs are costly. In order to provide its people with the
necessary medication, Thailand has turned to cheaper, generic versions of
drugs manufactured by large pharmaceutical companies. This has placed them
into a brewing conflict with the pharmaceutical industry.

Last November, Thailand announced that it would be bypassing the patent on
the HIV drug Efavirenz, which is manufactured by pharmaceutical giant
Merck, by issuing a compulsory license which would allow the country to
import or locally produce generic versions at a fraction of the price.
Three months later, Thailand also issued a compulsory license for Kaletra,
an HIV drug manufactured by the US company Abbott.

According to TRIPS, the 1995 World Trade Organization agreement on
intellectual property, Thailand’s move may be perfectly legal under
international law. TRIPS allows a government to issue a compulsory license
on patented drugs when faced with a public health crisis, only paying a
nominal royalty to the patent holder.

However, the pharmaceutical industry has decried the actions, claiming
that such disregard for patent laws reduces the incentive for companies to
research and develop new drugs in the future, particularly drugs for
illnesses most affecting developing countries. Pharmaceutical Research and
Manufacturers’ Association (Prema) expressed concerns about “continuing to
invest in a country where the government cannot provide a basic guarantee
for the safety of their assets.” For its part, Abbott countered Thailand’s
move by refusing to release a newer, heat-resistant version of Kaletra in
the country unless the compulsory license was rescinded, a boycott which
has drawn harsh criticism from AIDS activists.

The controversy concerning developing countries breaking patents for HIV
drugs brings into sharp relief many of the issues in the debate
surrounding the rationale for patent laws and more generally, for the
protection of intellectual property itself.

Patent laws have only been in existence for a short period of time in the
history of Western civilization. They are creatures of statute, created by
governments as a way to balance between competing policy interests. One
of the main rationales for patent laws is that they provide financial
incentives for individuals or companies to research and develop new
inventions by allowing them to recoup costs and profit from their efforts.
The idea is this would ultimately benefit the public, which would have
access to a wider range of technologies and inventions. However, if the
cost of providing monopolies on a new invention is that it unduly limits
or even stops the public from gaining access to these new benefits, the
entire rationale crumbles.

In the fervour of capitalism, our society has lost sight of this
underlying and fundamental purpose behind patent protection. We have come
to see patents as some sort of natural and unchanging right. Companies
have come to see them as assets that must be protected at all cost, even
if that cost is the lives of thousands of people.

It is too much for us to expect companies, whose very reason for existence
is the pursuit of profit, to make any financial sacrifices for the sake of
humanitarian purposes. It is up to the governments of the world to change
patent laws so that pharmaceuticals have no choice but to follow along.
Patent laws should only extend the amount of protection necessary to spur
invention and no more.

Nowhere is the reason for such limits more clear than in the case of HIV
drugs in developing countries. Many people in these countries cannot
afford to pay for the drugs produced by the patent holding
pharmaceuticals. There are no large profits for the companies to obtain
from these countries. Allowing generic versions to be sold in these
countries or providing them at cost would not harm the pharmaceutical
companies in any significant way. In fact, large pharmaceutical companies
make plenty of money selling their products in the US and in other
developed countries. It is highly unlikely that losing marginal profits
from developing countries would harm the ability of or the incentive for
these companies to fund future research into new drugs.

As for Thailand, it appears that they are at least winning the battle over
public opinion. The move has been praised by numerous human rights
organizations, which have encouraged other developing nations, including
Brazil and Rwanda, to follow suit.

One Comment
  1. I agree that developing countries should have access to these drugs. Thailand did not break the rules, however, compulsory licences are only a short-term solution that will likely damage the prospect of future development of HIV/AIDS medicines.

    Patent law is meant to balance the interests of various parties. The incentive for producing these drugs is that there are profits to be realized from selling pharmaceuticals internationally. For certain drugs, developing countries account for a sizeable portion of the market. In December 2006, 7.1 million people were in need of treatment for HIV/AIDS in all low and middle income countries.

    As more countries break patents in this regard (like Brazil and Rwanda) and pharmaceutical companies feel that they are not being compensated for their investment, they will halt the future development of HIV/AIDS related medicines. They may shift their focus to a “developed” country problem, like hair loss, where there is less risk of their patents being broken on the basis of a public health crisis and they are guaranteed profitable returns. The vaccines and medications we have now for HIV/AIDS are not perfect and hindering the incentive for future development is dangerous.

    An alternative that might better balance the interested parties involved would be a reduction of the 20 year patent term to the minimum duration necessary for pharmaceutical companies to meet their costs and make a modest profit. A shorter term would ensure pharmaceutical companies are adequately compensated, and give countries in need quicker access to these medications.

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