People's Democracy

AN International symposium on TRIPS and access to medicines was organised by the National Working Group on Patent Laws and Medecins Sans Frontieres (Doctors Without Borders) on June 4. This was followed by a Working Group Meeting on "Intellectual Property and Access to Drugs" in New Delhi India, on June 5 and 6, 2001. The meeting was held in the background of MSF’s ongoing "Access to Essential Medicines" campaign and the upcoming WTO Ministerial Conference. This Working Group, constituted of 25 international experts, has been set up by MSF to advise it in its campaign.

The widely evocative issue of access to anti-retrovirals, i.e. drugs that are used to treat AIDS patients, has played a major role in the way the international community today sees the pharmaceutical industry. Treatment of AIDS with a combination of drugs—called Highly Active Anti-retroviral Treatment (HAART) -- has decreased mortality from AIDS by 84 per cent in developing countries. Unfortunately less than 5 per cent of AIDS infected people across the globe have access to such treatment currently, because the estimated cost of treatment by HAART is about 12,000 dollars per person per year. At present rates, Zimbabwe, Uganda and Ivory Coast would require to spend 265 per cent, 172 per cent and 84 per cent of their respective Gross National Products, just to buy drugs to treat all their AIDS patients! This issue has been the rallying point of a major global campaign that today is demanding a closer, critical look at the TRIPS agreement.

Condemnation of the role of pharmaceutical companies reached a crescendo due to the lawsuit brought against the South African government in Pretoria’s High Court by 39 pharmaceutical companies. The lawsuit targeted a legislation by South Africa—the Medicines and Related Substances Control Amendment Act, No. 90 of 1997 -- which allowed the country access to cheaper anti-AIDS drugs. The 1998 lawsuit was supported by the US government, which placed South Africa on the Special 301 Watch List, and the European Union, which wrote to then Vice President of South Africa, Mbeki, to express its concern about the legislation. This move by the pharma majors evoked a massive counter-response across the globe, led by MSF. The companies suffered a major defeat when, in April, 2001 the companies capitulated to mounting anger and disgust over their conduct and agreed to withdraw the case unconditionally.

About two months back Brazil moved a resolution at the UN Human Rights Commission, which was approved by 52 votes in favor, 0 against and 1 abstention (USA). The resolution, among other things, called upon States, at the international level, to ensure that "the application of international agreements is supportive of public health policies which promote broad access to safe, efficient and affordable preventive, curative or palliative pharmaceuticals and medical technologies..." Today many national governments in third world countries are backing protests and demonstrations against the WTO in general and the TRIPS regime in particular. global coalition countries in Africa, Latin America and Asia, as well as organisations campaigning for access to cheap anti-AIDS drugs see India as a potential source of cheap drugs. In March 2001, an Indian company, Cipla, announced that it would offer the combination of anti-AIDS drugs at a cost of 600 dollars per patient per year, and later announce that they could bring down costs to 350 dollars. Cipla’s offer was matched within weeks by two other companies, Hetero Drugs and Ranbaxy. These offers are, till date, by far the cheapest that have been made anywhere in the world. In other words, Indian companies are now offering drugs to treat AIDS at prices that are one fortieth of global prices! Such a precipitous fall in prices can revolutionise AIDS treatment in developing countries, and save millions of lives.

The defeat for the 39 pharmaceutical companies in South Africa is not the end of the battle. Every country that has tried to interpret the TRIPS Agreement in a manner that allows access to cheaper drugs for its people is faced with a hostile reaction from the US. But it has led to the building of an unprecedented global coalition against the use of TRIPS to deny the poor access to drugs.

Participants at the symposium expressed concern at the trend in Intellectual Property protection, that is increasingly skewing the balance of the rights of patent holders and consumers, in favour of the former. Speakers noted that the TRIPS agreement marks a fundamental shift in this balance, as well as a shift in global attitudes where private profits are put ahead of social benefits. This is further fueled by dependence of economies in the developed world on industries that require strong IP protection. Of the 15 most profitable industries today, 6 are from the pharmaceutical sector and 5 from the IT sector. It was also pointed out that IP protection allows such industries to create monopolies, not only over production, but also in the control of knowledge.

The net result of this trend, in the pharmaceutical sector, has been high cost of medicines and the consequent denial of access to medicines by the income poor across the globe. Further, it has also led to a situation where medicines required to treat disease that predominantly occur among the poor are not researched at all. Instead drugs that are being researched are drugs used for "lifestyle" diseases like baldness, impotence, obesity, etc. It was underlined that while the pharmaceutical industry claims that high prices are explained by the massive expenditure on R&D, the truth is that drugs they actually research have little relevance to real medical needs. Moreover, the kind of profits that big pharmaceutical MNCs generate are an indication of profiteering and not just legitimate profit making.

Speakers at the symposium also stressed on the need to utilise provisions available in the TRIPS agreement to ensure production of cheap drugs by domestic manufacturers in developing countries. For this, legislations in developing countries need to have licensing and other provisions that prevent abuse of monopoly positions by MNCs and also allow imports of drugs from the global market at lower prices. It was also pointed out that the next few years are going to be crucial, as developed countries challenge laws enacted by developing countries like Brazil in the WTO dispute settlement mechanism. The resolution in WTO of the complaint made by the US against Brazil for violation of the TRIPS agreement because the former has included provisions that allow it to produce cheap anti-AIDS drugs by licensing domestic manufacturers, is being seen as crucial in this context.

Speakers also commented on the adverse effect that TRIPS has on R&D and technology dissemination in developing countries. It was pointed out that such capabilities, built up in countries like India, Brazil and Argentine are under serious threat. The need to organise public funded research in these countries was stressed. Representatives from the Indian Drug Manufacturers Association and the Indian Pharmaceutical alliance spoke of the need to tailor the Indian Patent Act - still at the drafting board—to the needs of domestic industry, and domestic consumers.

Speakers also expressed concern that there are already signs that the Indian pharmaceutical industry is moving from a position of self reliance and relatively stable prices to a situation of import dependence and high prices. Following the TRIPS accord, a large number of MNCs have either closed down their plants in India or have sold them to Indian companies. This has been done in anticipation of a change in the Indian Patents Act, in line with the TRIPS accord, where imports are sought to be given the status as domestic manufacture. MNCs who have closed or sold off their assets include Ciba Geigy, Boots, Roche, Abbott, Parke Davis, Sandoz, Hoechst, Boehringer, Rhone Poulenc, Glaxo and Pfizer. It is estimated that nearly 20,000 workers, employees, scientists and technicians have lost their jobs due to the above closures. Interestingly, none of these companies have ceased their marketing in the country, but are getting their products manufactured in the small and medium scale sector in India local small and medium companies.

With the government allowing 100 per cent foreign equity in pharmaceuticals, these companies are poised to close their marketing operations in the country and depend largely on drugs imported from their parent companies. There are already ominous signs that there is increasing import dependency in the Indian pharmaceutical industry. In 1998-99 out of 96 bulk drugs monitored by the government, 32 drugs which were earlier produced in India were not produced at all! Even import of finished formulations have increased from Rs 17.3 million in 1994 to Rs 68 million in 1999, and in the first quarter of year 2000 this has reached to Rs 90 million.

Those who spoke at the Symposium include Mr S P Shukla, formerly India’s chief negotiator at GATT; Ms Ellen ‘t Hoen, Co-ordinator of MSF’s Access campaign; Prof Prabhat Patnaik and Prof Ashok Parthasarathy from JNU; Dr James Orbinski, Director MSF Working Group on Drugs for Neglected Diseases; Dr Pushpa M Bhargava, Founder Director, CCMB; Dr Nitya Nand, Chairman, NWGPL and Former Director, Central Drug Research Institute; Dr Arun Ghosh, Former Member Planning Commission; and Mr James Love, Director, Consumer Project on Technology (USA).