TRIPping over patent laws

Published March 22, 2005

The Daily Targum

I was racking my brain for something to write about for this week’s column the other day – believe it or not, scrambling your way up to earning a soapbox isn’t half the struggle, it’s finding something significant to say when you’re on it – when a friend of mine suggested I read an article on BBC’s online front-page.

This may be giving away far too much of my research method and robbing me of my seemingly thorough info gathering skills, but I get most of my international news from the British Broadcasting Corporation, as well as most of the seeds of interest from whence I launch into a foray of the web for more, more, more. And this was one story that unfolded from Africa to India and then across the rest of the world.

The article was about hundreds of people living with HIV or Aids in Kenya who had gathered to demonstrate at the Indian High Commission in Nairobi. The reason for the protests, also planned in Uganda and Tanzania according to the BBC, was that India’s parliament will be reviewing the Indian Patent Act of 1970 over the next few weeks and could, quite probably, begin enforcing patent laws that will end the production of generic Aids medications used to treat millions across India, Africa and other developing countries that cannot afford the branded drugs produced by large pharmaceutical companies.

The difference between generic anti-retroviral (ARV) drugs and brand-named drugs is nothing to sneeze at. While the article mentions that one African patient pays $20 a month for treatment with generic forms of drugs that would otherwise cost $395.

In Nigeria, the government has resorted to subsidizing the generic drugs themselves, which, despite being more than ten times cheaper than brand-named drugs, are still not affordable to many of the four million Nigerians estimated to be HIV-positive today. Under the program, the Indian-produced generic ARVs are given to around 14,000 Nigerians for $7 per patient per month, and that number was supposed to rise to 100,000 this year.

This is unlikely if India changes its patent laws to prohibit the generic production of patented drugs. Under current law, Indian drug companies have been able to replicate products patented in other countries as long as the process of production is not entirely the same. In other words, India recognizes patents on the process of drug-making, but not on the final product.

Working with loopholes is a forte with Indian businesses, which have learnt to thrive despite continuous entanglement in the one thing the country is never short of- red tape.

Indian pharmaceutical companies such as Cipla, Ranbaxy and Hetero have capitalized on this patent loophole in a way that would make any crafty businessman proud, effectively plagiarizing drugs that have taken years and millions of dollars’ worth of research and development by multinational pharmaceutical companies, and mass producing them for a fraction of the price, therefore cornering a market that had been monopolized by a few huge companies till the recent past.

The difference between this craftiness and any other is that thousands of lives are made better because these drugs are finally being offered at an affordable price for Aids victims and their countries, which have a responsibility to try to curb the epidemic and support those already infected as much as they can.

Such is the usefulness of these generic ARVs that the World Health Organization (WHO) has listed Cipla, amongst other low-cost generic drug producers, as a safe provider of antiretroviral drugs for United Nations purchase. William Haddad, from Cipla, called this a breakthrough, saying it was the first time the World Health Organization, "has
had the nerve to challenge the multinationals by listing generic versions of drugs that are still on patent."

India itself, the second most populous country in the world after China, has one of the highest numbers of HIV/Aids cases – over five million people. There is no doubt the Indian government would prefer home-made generic ARVs to patented imported ones. So why the move to end this industry, which also brings significant amounts of profit into India’s coffers?

India may not be the land of the free or the home of the melting pot of two-garage suburban houses with four-wheel-drive SUVs in the driveway and multi-colored people on the inside, but it has had one pride in common with the United States – its economic isolationism. Alas, both great loners have fallen into the melee of the global market. India now has to answer to the World Trade Organization (WTO) on its patent laws, and its grace period with the WTO came to an end this year.

The Trade-Related aspects of Intellectual Property Rights agreement (TRIPS), drawn up by the WTO between 1986 and 1994 to ensure intellectual property rights are respected in international trade came into effect in 1995, but different countries have had different periods after which they must comply with the law.

India’s compliance must come at the beginning of this year, or it will face severe economic penalties from the WTO. The drug companies themselves, Cipla, Ranbaxy and Hetero, amongst other generic producers, have their own incentives for withdrawing their generic drugs from the market, the fear of litigation outweighing the hefty profit margins they’ve made from generic medicines – about a sixth of the $48 billion global market for these generic drugs.

What we’re left with now is a situation where Aids victims in Kenya and Nigeria may begin to die at a rate higher than the current 500-700 a day from Aids-related diseases so that pharmaceutical multinationals don’t feel cheated out of profits.

It seems that economics overrides social welfare once again– the precedence of the WTO over the WHO when it comes to condoning or even encouraging the production of low-cost generic drugs to treat Aids patients being just one disturbing example.

The provision of the basic healthcare needed for Aids patients to survive is dependent on privatized pharmaceutical companies that want to make up in profit what they spent on research and development. Governments, trying to provide their citizens with healthcare also have their arms twisted by a supranational organization that is more interested in protecting patent laws than providing reasonable healthcare when possible. This is, of course, the best case scenario where governments do actually take an active interest in the health of their citizens.

Drugs so vital to human survival should not be subject to the laws of the market. If research and development costs are what keep the multinational drug companies from providing their latest drugs at prices that do not require them to be ripped off by the developing world in order for them to be affordable to the developing world, then there must be another solution – perhaps government funding of such research or more lax laws when ARVs and other such vital drugs are involved.