The American Spectator

Special Report

Stealing Drugs, Hurting the Poor

By Doug Bandow on 8.16.07 @ 12:07AM

(Page 2 of 2)

Yamin emphasizes that governments have a responsibility to meet these alleged international obligations, including by acting "to deliberately block intellectual property reform," that is, to steal patented pharmaceuticals. Other activists emphasize the duty of companies to essentially give away their products, irrespective of R&D costs. After Abbott, which has reduced prices on its medicines in middle- as well as low-income countries, announced that it was no longer going to market drugs in Thailand -- which was expropriating one of its products -- AIDS Access director Nimitr Tien-udom declared: "Now they have pulled off the mask, we can see how greedy they are."

YET PATENTS ARE NOT THE CHIEF BARRIER to treatment of the poor. The vast majority of medicines on the World Health Organization's "Essential Medicines" list have not been patented in any poor nation. Moreover, many companies discount and even donate their drugs in poorer states. Some work with NGOs and governments to create a workable health infrastructure and distribute ARVs and other pharmaceuticals.

Unfortunately, attacks on drugmakers -- whether seizing patented products or imposing price controls -- discourage the creation and distribution of the very medicines which are most needed. Patents enable firms to earn back the money spent to develop their products as well as to invest in further R&D efforts. Governments can only steal drugs already on the market or in the pipeline: doing so inevitably will discourage companies from producing new medicines in the future.

Nowhere would the human cost of discouraging R&D be greater than in treating AIDS. Some 80 anti-AIDS drugs are currently being developed, including almost 20 vaccines.

Attacking the research drug industry in industrialized states also will discourage development of a research industry in developing states. Note several analysts in a study for the Campaign for Fighting Diseases (CFD):

Weak [intellectual property] laws enable the emergence of copycat industries at the expense of innovator industries -- with negative consequences for economic growth because the added value of the copycat industries is typically lower than that of innovator industries. In addition, innovator companies based in countries with strong IP protection will be less likely to engage in joint knowledge-oriented projects with firms in countries with weak intellectual property protection.

Stronger IP protection also will spur additional investment, foreign and local, in local firms to research diseases that disproportionately afflict the local population. India has adjusted its law to improve IP protection. Reports CFD: India currently has the largest number of FDA approved pharmaceutical manufacturing companies outside the U.S., and has increased spending on R&D from 4 percent, five years ago, to 8 percent today."

WHAT TO DO? THERE IS A MORAL IMPERATIVE to distribute life- saving products in impoverished states, but the duty of doing so falls on all of us -- including activists who raise money by attacking the drugmakers. It would be far better if industry critics, such as Oxfam and Medecins Sans Frontieres, raised money to purchase needed drugs for patients in poor nations.

In contrast, prosperous but stingy countries like Thailand and Brazil should be held accountable for their misbehavior. If sweet reason doesn't change their behavior, drugmakers, like Abbott in Thailand, should refuse to market any of their goods in offending nations.

Moreover, Washington should insist on IP protection in negotiating trade liberalization agreements. The U.S. Trade Representative has asked Thailand to reconsider its decision, but the U.S. government must be prepared to penalize states that violate patent rights by filing complaints under U.S. and international law. The USTR could be empowered to suspend patents issued by countries that do not respect IP and end any special trade benefits (both Brazil and Thailand enjoy lower tariffs under the Generalized System of Preferences).

America's task has been made harder by the World Health Organization's refusal to defend production of the drugs it seeks to distribute around the world. Moreover, nearly two score congressmen, led by Rep. Henry Waxman (D-Calif.), have endorsed Thailand's theft of the drug patents.

Protection of American intellectual property is a vital economic and health issue. Pharmaceuticals save lives. Stealing patents is really stealing the health future of Americans -- who pay a disproportionate share of the globe's pharmaceutical R&D -- and disadvantaged peoples around the world.

Letter to the Editor

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