E-drug: MSF/Oxfam response to FT editorial
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[Distributed as fair use. HH]
LETTERS TO THE EDITOR: Bringing the pharmaceuticals industry to
its senses
Financial Times; Aug 30, 2001
Sir, Your editorial "Patent nonsense" (August 24) says it would be
"a bad precedent" for Brazil to "set aside" Roche's patent. We
disagree. This is an important precedent that will bring a myopic
industry to its senses.
A patent is a contract between public and private interests. When a
patent monopoly is against the public interest, governments have
the right to free themselves from that monopoly. This is an inherent
and necessary component of any patent system and is recognised
by the World Trade Organisation, which allows for measures such
as compulsory licensing. The US issues compulsory licences all the
time on technologies such as tow-truck parts, computer
technologies and gene rights.
Roche's anti-Aids drug was consuming more than a quarter of
Brazil's spending on Aids treatment. This was an unacceptable level
of expenditure for Brazil, which negotiated with Roche for six
months for a price cut, without success.
Countries should follow Brazil's example and be able to turn to
measures to resolve market failure by allowing generic competition.
This is precisely what a united bloc of developing countries has
proposed at the WTO's trade related intellectual property rights
council. The European Union supports them, leaving the US isolated
in opposition.
Concerns that cheap generic drugs may leak back into rich
countries are old hat. Some companies already sell some medicines
and vaccines at low prices and are having no difficulty with
leakage. Pascal Lamy, the EU trade commissioner, has offered a
regulatory firewall to ensure that they do not get into the EU.
Patents can be a crucial incentive for drug research and
development. The pharmaceuticals industry is one of the most
profitable in the world and has produced vital new cures. But if vast
numbers of poor people are excluded from the benefits of these
innovations, and die as a consequence, patent monopolies are
unacceptable.
Brazil's move does not threaten hopes of finding new drugs and
vaccines. Where Aids medicines are unaffordable, profits are
non-existent. Seeking alternative sources of these medicines will
have little impact on the profitability and research activities of the
pharmaceuticals industry.
The global patent system will avoid attack if countries are allowed
to exercise their legal rights within a system that ensures that the
resultant benefits are shared with those most in need.
Phil Bloomer
Director, Cut the Cost Campaign, Oxfam
Dr Bernard Pecoul
Director, Access to Medicines Campaign
M�decins Sans Fronti�res
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LEADER: Patent nonsense
Financial Times; Aug 24, 2001
The pharmaceuticals industry is losing ground in its efforts to
maintain patent rights against the demand for cheap drugs in
developing countries.
After a humiliating defeat in a legal case against the South African
government, the industry is facing further reverses in Brazil. In June
the US government ended its attack on a Brazilian law that can
override drugs companies' patent rights. Then, on Wednesday,
Brazil threatened to end the monopoly of Roche of Switzerland over
nefinavir, its Aids drug. This would be the first time that a country
had explicitly set aside such patent rights.
It would be a bad precedent. Both sides should seek a compromise,
as Merck of the US did in March when it agreed to steep cuts in the
prices of two Aids drugs that are sold in Brazil.
There is widespread sympathy for poorer countries that are seeking
cheaper drugs. Brazil needs them for its well conceived programme
to help Aids victims. In Africa hardly any of the 25m people
infected with the HIV virus can hope for medication at present
prices.
But government attacks on pharmaceuticals companies' patent
rights - and campaigners' attempts to demonise them - are not the
way forward. The hope of finding new drugs such as a vaccine for
Aids depends on the research and the profits that patent laws
protect. In richer countries it is broadly accepted that the high cost
of drugs includes the price of progress. But a general erosion of
patent rights could jeopardise that consensus.
That is not an argument for maintaining high prices in poor
countries. In many of them, the choice is between cheap drugs or
no drugs. So, quite apart from any humanitarian considerations,
there should be an economic incentive for pharmaceuticals
companies to sell their products at close to the marginal cost.
There are obstacles to this, however. First, cheap generic drugs
may leak back into rich countries. Second, two-tier pricing may
provoke consumer revolts in the west. Third, many poor countries
lack the infrastructure to make even a free distribution of medicines
effective.
The difficulties are not insurmountable. Some drugs are already
offered at lower prices to poor countries. Still, the industry needs to
be much more pro-active. Otherwise its hand will be forced - as in
Brazil. Richer countries must also recognise that they alone will bear
the costs of drug development. They may need to offer protection
against imports of cheap drugs from the third world. And they must
be more generous to poor countries, with cash for drugs and
medical expertise.
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