Chronicle Pharmabiz Special
Intellectual Property Rights - An obstacle to development?
In my innocence, I thought that Intellectual Property meant nothing to people like us living in small developing countries. Given the high cost of patents, the chances of an inventor in a developing country being able to effectively protect an invention and successfully exploit it are almost none. Developing country inventors own less than 5 % of world patents. If we exclude the big developing countries like India and Brazil and the Newly Industrialized Countries, this figure drops to less than 1 % of worldwide patents. How then can I living in a developing country hope to gain anything from the world Intellectual Property system? The world Intellectual Property system appeared to have little relevance to me and I thought it would in no way affect me and that I should have little difficulty living with it.
But I thought wrong. The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), which all members of the World Trade Organization (WTO), including most developing countries, are forced to implement, has transformed the entire Intellectual Property scenario. TRIPS will make us pay more for many of our everyday needs and delay further what little chances we had of achieving the oft-proclaimed goals of developing countries, industrialization and development.
The costs of pharmaceuticals decreased drastically in Sri Lanka about ten years ago with the discovery that Indian drugs were much cheaper than those imported from the West. Indian patent law had consistently refused to recognize product patents and permitted the manufacture and sale of patented products produced by a distinctly different process. These processes were developed by Indian scientists who could patent them and use them to manufacture drugs for the market. Many such drugs were marketed in India and most of them could be offered at well below prevailing world market prices. The prices of drugs in the Indian sub-continent were therefore much lower than in the industrialized countries.
Was India being unfair on inventors by not recognizing product patents? Not really. India was merely following the example of many European countries, which did not recognize product patents until their pharmaceutical industries could stand on their own feet. Even Switzerland, home of many of the pharmaceutical multinationals began recognizing product patents only in 1977.
The non-recognition of product patents has not only meant cheaper medicines for India and its neighbours but also the strengthening of the pharmaceutical industry in India. Multinational companies selling drugs in India were moreover forced to sell their products in India at prices far below those in other markets in order to compete with the domestic industry.
With TRIPS, all this has changed. All members of the World Trade Organization (WTO) are compelled to recognize product patents. No longer can Indian pharmaceutical companies devise alternate methods for manufacturing patented products. This means that cheap medicines will no longer be available to developing countries like Sri Lanka. Developing countries with weak or no pharmaceutical industries have little hope of building up a vibrant pharmaceutical sector within their economy. The strategy successfully used by India to develop its own pharmaceutical industry has been closed to them by TRIPS and the WTO.
If multinational companies sell drugs at lower prices in India than in other developing countries, there should no reason why other developing countries cannot import these drugs from India at these low prices rather than at the high prices often charged from other countries by the companies. If they could do so, the prices of brand name drugs in developing countries would be much less. Such imports of the identical drug from cheaper sources are called parallel imports and TRIPS has provisions on international exhaustion of intellectual property rights, which permit developing countries to do so. However the multinational drug companies and their patrons are so powerful that they can twist the arms of developing countries and prevent their governments introducing provisions, which would permit parallel imports when formulating their Intellectual Property Laws.
The recent success of South Africa in fighting the efforts of multinational companies to maintain their patent rights and thereby the high prices for anti-HIV drugs in that country drew the World's attention to compulsory licensing as a method of obtaining drugs cheaper at times of national health crises. Although the Doha meeting of the WTO last year reiterated the availability of compulsory licensing as a strategy open to WTO members, the pharmaceutical lobby worldwide prevents developing countries including such provisions in their Intellectual Property Laws.
Although the United States itself used the threat of compulsory licensing in order to obtain the antibiotic Cipro from Bayer at lower prices to fight anthrax, they frown on developing countries taking the same path. Only recently did we in Sri Lanka know that as long ago as 1991, the Bush administration had signed a bilateral agreement with Sri Lanka limiting the grounds for the use by Sri Lanka of compulsory licensing of patents. Not only were our internationally accepted rights bartered away, they were done in secret.
As far as health is concerned, intellectual property has therefore meant higher drug prices and lower access to health to us in Sri Lanka. The WTO has through TRIPS dealt a fatal blow to the World Health Organization's Global Strategy for Health for All by the Year 2000. The pressure to enforce third party Intellectual Property Rights (IPR) in developing countries has been increased with TRIPS, which apparently is the only international agreement containing articles requiring its enforcement.
On the one hand, everybody laments on the need to bridge the digital divide, which separates the industrialised countries from developing countries and urban elites in developing countries from their rural compatriots. On the other hand, we have an essentially monopolistic Microsoft Corporation threatening developing countries of the dire consequence of not actively protecting the rights of Microsoft in these countries. Lawyers usually lobbyists for Microsoft are frequent visitors to developing countries extolling the virtues of providing copyright protection for software and its role in developing their own flourishing information technology industry.
Software programs often costs more than $ 500, a sum that represents a little more than one percent of the per-capita income in the United States but sixty percent of the per-capita income in Sri Lanka. And Microsoft Corporation whose net assets are more than seventy times that of Sri Lanka wants the Sri Lankan government to devote a large part of its Budget to maintain an enforcement system to protect the intellectual property rights of Microsoft Corporation and ensure that every nickel that is "due" to Microsoft is squeezed out of the pockets of the poor people of the country.
For most of the people of developing countries like Sri Lanka, Intellectual Property has therefore become a vehicle to prevent rather than assist access to information technology. The investments required for improving human resources in information technology and to keep up with developments in the field has grown enormously and is now far beyond the resources of many of the schools and Universities in developing countries. Fees have multiplied to generate funds for the payment of international developed country prices for copyrighted software making education available to only the very rich. The WTO, which promised developing countries expanded trade and rapid development is hampering the modernization process in developing countries through TRIPS and ensuring that the digital divide within these countries will deepen.
There are a few areas like genetic resources where developing countries can boast of some advantage in relation to IPR. Most developing countries are repositories of a rich and varied biodiversity. If such countries could somehow exploit these renewable resources and convert them into useful products like drugs or pesticides for the international market, they could perhaps employ IPR as a constructive tool in their development strategy.
The low state investment in science and the limited research facilities available in the developing countries are however insufficient for making advances which would lead to the creation of IPR. There appears to be no alternative for developing countries but to collaborate in research with developed countries or multinational corporations if any meaningful research is to be carried out on exploiting their biodiversity.
The Convention on Biological Diversity (CBD) generated a lot of excitement amongst developing countries, which recognized in the CBD a device, which could promote such collaboration while protecting their own interests. The Convention required member countries to formulate laws, which would create the conditions for providing international access to their biodiversity while at the same time ensuring that they receive fair and equitable benefits from its exploitation.
More than eight years have elapsed after the Convention entered into force and over one hundred and sixty countries have ratified it, but sadly very few countries have CBD legislation in their statute books. Even the few countries like the Philippines and countries of Latin Americas that have legislated for the CBD appear to be unable to implement the laws. One cannot be faulted for perceiving a connection, however tenuous, between the failures of the CBD and the fact that the USA remains one of the few industrialized countries, which has failed to ratify the Convention.
With CBD too remaining largely a paper treaty and of no help to developing countries, the world Intellectual Property system has little to offer the citizens of small developing countries like Sri Lanka. Their very future depends on their ability to mobilise international support in devising strategies, which would help protect them from its detrimental effects.
(Courtesy: Midweek Review)