|
|
|
|
CIAO DATE: 04/05/07
Strong Medicine: The Pharmaceutical Industry’s Compact with Society
by Mitul Desai
India, as required by membership in the World Trade Organization, amended its patent act earlier this year to comply with the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Of the many amendments to the law, the most significant will result in legal protection for pharmaceutical products, not just processes. This change, which prohibited the ability to make copies of patented drugs at low cost, has transformed India into the next great frontier for the global pharmaceutical industry. Several leading drug companies drawn by the large middle-class market and high-quality, low-cost talent pool are already expanding operations in India.
Resistance among the amendments’ critics serves as a microcosm of the global debates over patent protection and access to medical coverage that shape public perception of the pharmaceutical industry. First, in order to understand these connections, the global resentment towards intellectual property laws must also be understood. Second, the history of pharmaceutical companies and patent laws in India needs to be examined in order to understand the developed and developing world’s divergent outlook on the industry. Third, the industry must acknowledge the importance of public relations strategies and a global outlook. By taking these steps, the industry can positively transform its image in India and beyond, and in the process help reenergize U.S. global economic leadership.
Resentment: A Global Epidemic. Drug companies attract a level of scrutiny unlike any other industry. Critics focus their attention on issues regarding patents, or intellectual property rights, and access to medicines. Some attack the entire patent system, arguing that it leads to high drug prices few can afford. Others criticize the industry’s insistence on including the TRIPS agreement in the World Trade Organization (WTO) system as an illadvised move that improperly linked intellectual property and international trade. Before TRIPS intellectual property was largely unregulated internationally. In pushing for TRIPS’s enactment, the United States employed what were seen as heavy-handed negotiating tactics; consequently, the very introduction of this agreement has left lingering resentment in the minds of activists, academics, and the Indian government itself.
Early on, India expressed “serious reservations…about the relevance and utility of the TRIPS negotiations as long as measures of bilateral coercion and threat continued [by the U.S.]” At the 1999 WTO meeting in Seattle, the U.S. pharmaceutical industry and government were attacked by NGOs for having included TRIPS in the WTO. Criticism of TRIPS’s inclusion in the WTO has also been leveled by economists who argue that forums like the World Intellectual Property Organization and the Paris and Bern conventions are better suited for multilateral intellectual property agreements.
Attacks on the industry grew to unprecedented heights after notable cases in South Africa and Brazil. In 2000 thirty-nine multinational pharmaceutical companies sued to prevent the South African government from importing generic AIDS drugs for which the companies held patents. The drug companies argued that such importation would violate intellectual property rights and discourage important research. Furthermore, they said that they were already providing “tier-pricing” for drugs in South Africa. Protests and editorials criticizing the industry immediately followed. In the face of widespread criticism, the industry eventually backpedaled, offering the drugs for free or at steeply reduced prices, but not before causing lasting damage to its reputation.
In 2001 U.S. business interests persuaded the government to bring WTO action against Brazil for failure to revoke a law allowing compulsory licensing of patents on products not made in Brazil. Although a technical violation of WTO rules, the law was not actually being enforced by Brazil. The matter was ultimately settled, but the pharmaceutical industry further damaged its reputation and empowered anti-patent groups in Brazil and elsewhere.
Mitul Desai is Senior Attorney at Merck & Co., Inc.