Compulsory Licensing in Thailand
This article highlights role of the US and major pharmaceutical companies to undermine trade agreements, intended to protect national interests and public health. It exposes some of the lies and underhand tactics used by powerful commercial interests.
Transnational pharmaceutical companies are a highly profitable business; their 21.2-58.6% profit margin is much higher than most other businesses. Their research and development costs average only 13.9% of sales. The transnational pharmaceutical industry is able to make such high profits through the monopolistic patent system.
Even though the US succeeded in forcing the World Trade Organization to accept the Trade-Related Intellectual Property Rights Agreement (TRIPs), it was also forced to accept a balance between intellectual property monopolies against the need to maintain a ‘breathing space’ for solving problems caused by the patent system. This took the form of ‘flexibilities’. Compulsory licensing by a government for public non-commercial use is one of these special conditions where countries can override drug patents in order to save lives.
The TRIPs agreement has been in effect for over a decade, but developing and least developed countries have never dared to make use of this ‘flexibility’ for fear of trade reprisals from the US. Only recently, when public health crises over the inaccessibility of medicines peaked, did governments begin to move, in ASEAN led by Malaysia, followed by Indonesia, and more recently, Thailand.
The true nature of pharmaceutical bullies
When Thailand announced the compulsory licensing of three patented drugs, the pharmaceutical companies, anxious to stem the tide among developing countries, retaliated aggressively, using every means available. One indication of their political and economic power is the threat by the US government to use Special 301 measures against Thailand. This makes a hostage of Thai exports to the US to prevent Thailand from doing any business the US government dislikes.
Other retaliations includes the use of public relations lobbyist companies and fake NGOs, like USA for Innovation, to publicize false and misleading information in the international and local press and the internet. Abbott, one of the big US drug companies, also withdrew seven drug registration applications from the Thai Food and Drug Administration. The only possible interpretation of these actions is that to the pharmaceutical companies, profits reign supreme over human lives.
Big Lies Exposed
Allegation 1: That compulsory licensing as practised by Thailand violates the TRIPs agreement.
The fact is that the US Trade Representative, the Secretary-General of the WHO and many intellectual property rights lawyers have made statements confirming Thailand’s compliance with Article 31(b) of TRIPs.
Allegation 2: That the coup-installed government of Thailand tore up patents to save budget for arms.
The fact is that efforts to counter the life-threatening monopolies over essential drugs have been going on for more than a decade, and have been spearheaded by civil society, not the military. A multi-partite committee to implement compulsory licensing was set up under the Thaksin government. At that time, before the military coup of September 2006, this committee, chaired by the Minister of Public Health of the day, resolved to impose compulsory licensing on the second-line antiretroviral drug efavirenz, but the coup in fact stalled the process. The current Minister, Dr Mongkol na Songkhla, merely resumed this legitimate and orderly process, allowing the National Health Security Office to execute its responsibility to procure lower-cost drugs so as to serve a greater number of patients. The savings in the national health budget, which is the second largest category of government spending after education, are being used for a campaign to prevent further HIV/AIDS infections.
Allegation 3: That the Government Pharmaceutical Organization’ GPO-vir drug is ineffective and not approved by the World Health Organization.
The fact is that this drug, produced by the GPO under a Thai mini-patent, has saved tens of thousands of lives. This drug was registered and its quality was assured by the Thai Food and Drug Administration. The reduction in the costs of antiretroviral (ARV) treatment through GPO-vir from 2,000 baht to 400 baht per day has yielded savings that allowed the expansion of the universal health coverage program to ARV.
Allegation 4: That Mahidol University research found a resistance rate to GPO-vir of 39.6-58%.
The fact is that this research was a study of resistance types by the chemical structure of the drug. GPO-vir was used as a proxy for nucleotide reverse transcriptase (NRT) and non-nucleotide reverse transcriptase (NNRT). The resistance rate is based on the chemical structure, not a comparison of GPO-vir with other branded drugs.
Vicious Cycle of Fear and Bullying: Patent Law Amendments
Almost 20 years ago, the US used Special 301 measures to force the Thai government to strengthen drug patent protection and extend patent life from 15 to 20 years. The tactics used then were exactly the same as those used now. Big lies by branding Thailand as an intellectual property pirate and counterfeit drugs market, even though at that time, a process patent system was applied to pharmaceuticals in order to encourage research into better production processes, rather than patents on the final pharmaceutical product. The threat by the US to drop Thailand from the list of Generalized System of Trade Preferences (GSP) forced the Thai government to amend its Patent Law in 1992 to cover pharmaceutical product patents and a 20-year patent life, in line with US wishes. The law was amended again in 1999 to eliminate a drug-pricing body, again something the US wanted to see.
It is high time for people, not only in Thailand but around the world, to rise up in resistance, to break free from fear, and to oppose holding human lives hostage to the greedy profits of private companies.
This article is written by Jiraporn Limanpananont, Ph.D., Social Pharmacy Research Unit, Faculty of Pharmaceutical Sciences, Chulalongkorn University.
Read also the chronology leading to use of the compulsory license in Thailand.