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Trade-Related Aspects of
Intellecutal Property Rights (TRIPS)
and Pharmaceuticals
by Eva Ombaka

In the signing of the convention instituting the World Trade Organization, member states also bound themselves to a number of treaties on trade in goods and services which were annexed to the convention. One of these agreements is the Trade-Related aspects of Intellectual Property rights (TRIPs) agreement. GATT and other international trade agreements did not cover pharmaceutical patents, as drugs were seen as essential products for public health. In TRIPs, pharmaceuticals are now treated as any other trade commodity and therefore it is expected to have the greatest impact on the pharmaceutical sector.

The TRIPs agreement establishes minimum standards in the fields of intellectual property. A major provision requires that member states grant patents for a minimum of 20 years to any invention of a pharmaceutical product or process that fulfils established criteria. Once granted, the patent protection must be available in all member states. Member states are therefore required to comply by modifying their national regulations within one, five, ten or eleven years depending on stage of development.

Several groups raised concern on the negative impact of TRIPs on the pharmaceutical sector in developing countries. Both empirical data and recent research indicate that prices of drugs will increase and production will concentrate in industrialized countries. As multinational firms will be free to export finished products, there will be little or no transfer of technology or foreign investment to developing countries. France, Germany, Japan, Switzerland, Italy and Sweden introduced patents only after development of their own industry. Countries such as India, Brazil, Mexico were acquiring basic technology through reverse engineering as they patented only product, not process. The TRIPs agreement will automatically prevent such development and the growing pharmaceutical industry in developing countries is likely to collapse.

While the patent system was seen as a way to generate incentives for innovation, member states were given a certain amount of freedom in modifying their regulation in order to adopt measures necessary to protect public health and prevent abuse by the patent holder. Thus member states may, in their laws, provide limited exceptions to the patent holder's exclusive rights e.g. through issuing of compulsory licensing, advanced generic registration and parallel importation of protected products as provided for in the agreement.

If developing countries could implement the TRIPs as it is, some of the concerns could be minimized. However, this is not so: increasingly they are facing political pressure and threats particularly from the US government, preventing them from implementing what is legally allowed. In the last two years, South Africa passed legislation to permit generic substitution and parallel imports in pharmaceuticals, a practice common in Europe and allowed under TRIPs. The US government, at the request of the pharmaceutical industry, using trade threats, has asked South Africa to repeal its legislation. Similarly Thailand which had a statute allowing compulsory licensing, has been threatened by US government and has repealed its own regulation! There are other examples in which the US government is opposing countries trying to enact laws that are identical to US laws! And the pharmaceutical industry is lobbying the US government to put pressure and possible economic punishment on countries for implementing TRIPs as it is. Eighty percent of the pharmaceutical industry is based in the USA and the US government appears to be lobbying for pharmaceutical company commercial interests.

These developments raise a major question: Is the TRIPs agreement going to be used by the powerful to protect corporate profit regardless of the cost in human life? How the TRIPs agreement can be used to ensure access to innovation and affordability of pharmaceuticals is the challenge that WHO, governments, NGOs, consumers and all people interested in justice face.

Eva Ombaka is a staff member of the Pharmaceutical Programme jointly sponsored by the WCC and Community Initiatives Support Services (CISS), based in Nairobi, Kenya.
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