The Telegraph
Since 1st March, 1999
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Nobody can afford to be too ill, or too poor, to read the fine print carefully. The takers as well as the makers of life-saving medicines will react variously to the large and the fine print of the World Trade Organization’s recent deal on drugs for the likes of HIV/AIDS, malaria and tuberculosis. This now allows poor countries to import considerably cheaper copies of patented drugs in case of a public health crisis involving killer diseases. It might appear from this that the WTO has cleared the way — with an eye to patent holders’ misgivings, of course — for “compulsory licensing”, or the sanctioning of the making or import of cheap generic substitutes of astronomically expensive drugs by setting aside patent protection rules. The WTO deal involves five countries: the United States of America as the home of patent-holding global corporations, Brazil and India as the generic manufacturers, and Kenya and South Africa as poor countries needing cheap medicines. This development — the result of years of haggling and appealing — has been hailed by the WTO’s director-general as a triumph of “goodwill and good conscience”, at last making full use of the inherent “flexibilities” of the WTO’s intellectual property rules.

But both generic manufacturers and public health organizations, like Oxfam and Médecins Sans Frontières, remain deeply and indignantly sceptical. First, any instance of compulsory licensing will have to be referred to the trade-related intellectual property rights council, the poorer importing country having to prove to this body that it cannot make the drugs locally. This could be contested by any country whose economic and political interests are being compromised by the license. Second, the issue of the royalty rates — directly influencing the price of these drugs — remains unresolved between the financial capability of the importing country and the generic manufacturer. Third, the WTO requires the suppliers to introduce distinct changes in the shape, colour and packaging of the generic drugs. This is ostensibly to prevent the diversion of the generics back into other, wealthier, markets. But, in reality, this could seriously raise production costs, cutting into the manufacturers’ small margins. Hence, a rather cumbersome and prohibitive bureaucratic procedure remains in place in spite of the apparent easing of constraints. The WTO’s humanitarianism could mire itself in its hoops and hurdles.

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