India, Brazil and China, which insisted on differential treatment for developing countries and access to essential medicines for poor countries at the World Trade Organization’s Doha development round, now stand betrayed by American multinational companies. The WTO has failed to meet the deadline for coming to an agreement on the issue.
The problem is over article 31(f) of the WTO, which relates to the trade related aspects of intellectual property rights. This stipulates that production under compulsory licensing must be predominantly for the domestic market and hinders countries lacking manufacturing capacity from importing cheaper generics.
India and other developing countries cited paragraph four of the declaration on TRIPS and public health which says that “the TRIPS agreement does not and should not prevent members from taking measures to protect public health…each member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted…as each member has the right to determine what constitutes a national emergency...it being understood that the public health crisis including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics can represent a national emergency or other circumstances of extreme urgency”.
At the Geneva meeting of the TRIPS council, the United States of America reportedly tried to insert a clause “infectious diseases of comparable scale and gravity” along with the four major diseases so that higher prices could continue to be charged for the medicines of these diseases.
But, developing countries felt that diseases like cancer, heart disorders, diabetes or high blood pressure — neither epidemics nor infections — are fairly common in the third world and excluding them from the ambit of special and differential treatment would make these medicines unaffordable for a large section of the population.
Indian pharmaceutical companies have been lately making inroads into the African market. The big Western MNCs have however been using the WTO to thwart the development of the generic industry. This has meant that even off-patent drugs are sold in Africa at prices very few can afford. At the TRIPS meeting, representatives of US pharma MNCs issued a statement, accusing drug companies in India and other developing countries of being interested only in exporting their medicines to Africa without any intention of setting up local manufacturing facilities or transferring technology to them.
Indian pharmaceutical companies have rubbished these charges. They run registered companies in Africa along with local partners, they say. But given the size of operations and market-share in Africa, indigenous production would only make the medicines dearer than importing them. The Indians have instead offered to finance the training of African students and chemists in Indian factories. Instead of appreciating these efforts, Western companies are trying to thwart them by quibbling over the diseases to be covered under the draft decision on intellectual property and health.
Experts point to other iniquities in the new system. At present, any government wanting to import anti-AIDS drugs must first ask the original patent holder and only if the latter cannot meet its price requirement, can the government approach generic manufacturers to provide the drugs at a low price. But under the proposed regime, the generic drugs maker would have to provide the drugs at a price set by the government that seeks to import. This system hinders market access by introducing bureaucratic delays.
At the next round of negotiations to be held in September at Cuncan in Mexico, India needs to work out amendments to article 31 of the TRIPS agreement so that such delays can be avoided and poor countries can have access to cheap life-saving drugs.