by Sarah Rimmington and Robert Weissman
Submitted to The Wall Street Journal
To the Editors,
In a recent editorial (Bangkok’s Drug War, Part Two, February 27, 2008) you criticized Thailand’s efforts to lower drug prices, and praised the new Thai government’s ongoing review of the policy to provide affordable generic versions of important treatments for HIV/AIDS, heart disease and cancer.
Contrary to what your editorial states, the previous Thai government’s decision to issue “compulsory licenses” permitting the use of generic versions of brand-name drugs was legal under both international and Thai law. Thanks to the cheaper generic drugs that Thailand is able to purchase due to the compulsory licenses, thousands of Thais are being given life-saving treatments they otherwise would have been denied.
Under World Trade Organization rules, governments can issue compulsory licenses under circumstances of their own choosing. Negotiations with patent holders are not required if the licenses are issued are for “public non-commercial use” (government use), as is the case in Thailand. The Thai compulsory licenses only cover the public health system, used primarily by lower-income Thais; upper-income Thais who obtain private medical care must still use brand-name products and pay brand-name prices.
It is worth noting that the United States, among many other countries, makes frequent use of compulsory licenses for government use.
The three licenses implemented in Thailand thus far have led to dramatic cost savings and enabled the Thai public health system to expand access to life-saving medicines. Not just Thailand has benefited; the first round of Thai compulsory licenses led brand-name drug companies to cut their prices for key products on a worldwide basis. After Thailand issued its compulsory licenses, Abbott dropped its middle-income country price for the crucially important AIDS drug Kaletra from US$2,200 to $1,000, for example.
The Thai government should conduct its review of health policy on the merits, not based on misguided fears — stoked by Big Pharma and its allies — that it risks trade sanctions. But it has no legitimate fear that implementing or issuing more licenses will lead to a WTO challenge from the United States, or that it will result in any of the various penalties and trade sanctions available under the U.S. trade programs. Officials of the U.S. government say they are not considering a WTO action against Thailand, and the other concerns have no basis in US law or political reality.
We support policy frameworks that would have middle-income countries make a fair-share contribution to the costs of innovation. But such policy approaches must be designed to expand access to essential medicines, not restrict access through high and unaffordable drug prices.
Robert Weissman, Director, Essential Action, USA
Sarah Rimmington, Attorney, Essential Action, USA
Essential Action is a non-profit international public health and corporate accountability group in Washington, DC
Here is the story referred to in the letter to the editor above.
Bangkok’s Drug War, Round Two
February 27, 2008
The Wall Street Journal Asia
Thailand’s military government may be gone, but its war on drug patents is still very much alive. Just ask the new Health Minister, Chaiya Sasomsup, who is thinking about restoring intellectual property rights to their rightful owners — the pharmaceutical companies.
Mr. Chaiya, who took office this month, is trying to clean up the mess bequeathed by his predecessor, Mongkol na Songkhla. Citing a World Trade Organization loophole, Dr. Mongkol seized patents on Merck’s HIV/AIDS drug Efavirenz in 2006. In 2007, he took another HIV/AIDS patent — Abbott Laboratory’s Kaletra — and Sanofi-Aventis’s patent for a heart drug, Plavix. His last act before leaving office last month was to sign an order to seize four cancer drug patents: two from Novartis, one from Sanofi-Aventis, and one from Roche.
Mr. Chaiya is worried both about Thai patients’ access to new drugs and trade sanctions against Thailand for seizing patents. Fair enough: The WTO provision Dr. Mongkol used specifies patent seizures are allowed only after “efforts to obtain authorization from the right holder on reasonable commercial terms and conditions,” or in cases of “national emergency.” It’s unclear that Thailand’s actions fit either circumstance.
But woe be to Mr. Chaiya to utter such heresy in Thailand, where nonprofit groups such as Oxfam and Doctors Without Borders have inculcated the public with scare stories about how Big Pharma has it in for Thai consumers. The NGO packhounds immediately flooded the Thai media with scare stories about Mr. Chaiya’s proposal, forcing him to do a political backstep last week and say compulsory licensing policy has been “maintained.” The matter is still under review.
What’s missing here is the other side of the argument. Many drug companies tier their pricing, charging developed countries more and developing countries such as Thailand, less. Thailand also faces a range of delivery problems that raise the ultimate cost of drugs to consumers, including high taxes on imports. Not least, seizing patents also puts patients at risk of importing nonbranded, lower-quality drugs.
Mr. Chaiya’s job is to look after the health of the Thai people, not the political motivations of NGOs. It’s clear what serves Thais best: drug companies that are incentivized, through the profit motive, to research and develop new drugs.