Access to Medicines in Thailand:

Interference by the United States

Last winter, Thailand issued lawful compulsory licenses that authorize the purchase of generic versions of three important patented medicines for use within its public health system. Two of the drugs are important for the treatment of HIV/AIDS (efavirenz and lopinavir/ritonavir) and one is targeted at patients with heart disease (clopidogrel).

The brand-name versions of these medications were too expensive for the government to purchase in sufficient quantities and thousands of Thais were going without treatment. By purchasing low-cost generic versions of these drugs, the public health system will be able to save the lives of many thousands of additional patients.

Retaliation by USTR for Thailand’s lawful actions

Since issuing the licenses, Thailand has faced strong criticism and retaliation from the major pharmaceutical companies and parts of the U.S. Government. The Office of the U.S. Trade Representative (USTR) has exerted pressure on the Thai government by adding Thailand to the “Priority Watch List” in the annual Special 301 Trade report, noting the issuance of the three compulsory licenses as a rationale for this designation.

This retaliation is especially troubling because Thailand's compulsory licenses are legal under its national law and under the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property (TRIPS). The 2001 Doha Declaration on the TRIPS Agreement and Public Health - to which the U.S. is a signatory - specifically reaffirms the right of developing countries to use compulsory licenses to promote access to medicines.

Under the TRIPS Agreement and Thai law, compulsory licenses issued for government use do not require prior negotiation with the patent holder. Despite this, Thailand held price negotiations with patent holders for several years before issuing the licenses. The United States, among other nations, makes frequent use of this flexibility and does not require prior negotiations in cases of government use.

Thailand took action to provide access to life-saving medicines to the poor

The Thai government has the obligation under its universal health care program to provide its people with access to all medicines. The government spends about 12% of its annual budget on public health, a significant increase over the 7% it spent during the 1990s before universal health care was introduced.

The introduction of the public health care system in 2001 was an extremely important development in a country where 15.9 million people - 25% of its total population - live on less than $2 per day, and where the per capita income is roughly one-sixteenth the U.S. level. High brand-name drug prices, however, are an obstacle to the sustainability and expansion of the Thai health system. Many patients with life-threatening conditions are not treated because patented drugs are too expensive to be purchased by the government.

Price-lowering generic competition following from the issuance of compulsory licenses will enable Thailand to significantly expand its treatment program. That’s why President Bill Clinton, Doctors Without Borders, UNAIDS, Oxfam, and many other public health and development advocates have endorsed Thailand’s actions.

Expensive brand-name drugs threaten Thailand’s HIV/AIDS program

Thailand maintains one of the most effective HIV/AIDS treatment programs in the developing world. But the program is at risk. As patients develop natural resistance to and severe side effects from older drugs they will have to switch to newer and more expensive patented medicines. According to the World Health Organization and the World Bank, the result will be dramatically rising drug costs.

For example, according to the Thai government, at least 50,000 of the 500,000 people living with HIV/AIDS in Thailand will naturally become resistant to first-generation ARVs and will require newer second-generation treatments such as lopinavir-ritonavir in order to stay alive in the next few years. However, because of patent monopolies, these second-generation drugs are extremely expensive. The Thai government estimated that its initial savings with the compulsory license will enable it to treat 8,000 more patients than if it spent the same amount purchasing the brand-name version of lopinavir-ritonavir (brand-name Kaletra).

Before Thailand issued the compulsory license, Abbott Laboratories charged $2200 per year per patient in Thailand for Kaletra (after the license, the company lowered the price to $1,000). Thailand is able to buy generic versions for $700, a price that should fall substantially over time.

Similarly, by purchasing a generic version of Merck’s Stocrin (efavirenz) the government says it will be able to provide the drug to an additional 20,000 patients with HIV/AIDS. Before the compulsory license, Merck charged Thailand twice what manufacturers charge for the generic version.

Thailand has a well-defined process for deciding when to issue compulsory licenses

Thailand has established strict criteria to determine when to issue a compulsory license for medicines. The drug must be on the National Essential Drug list or be necessary to solve important public health problems. The price must also be too high to be affordable for the government to supply for the public health system. These criteria clearly exclude the issuance of licenses for cosmetic or lifestyle drugs.

Although TRIPS permits compulsory licenses for both the public and private sector, Thailand has limited its compulsory licenses to government use. Private health-care providers who serve many upper income Thais and medical tourists - and comprise 20% of the market in Thailand -must continue to purchase brand-name drugs.

For more information contact: Sarah Rimmington at srimmington@essentialinformation.org or (202) 387-8030.