Federation of Pharmaceutical Manufacturers Associations (IFPMA)
13 September 2002
CIPR Report: Possibly More Dangerous to Economic Development than
the Alleged Costs of Patents and Copyrights
the Commission on Intellectual Property Rights releases their new
study "Integrating Intellectual Property Rights and Development
Policy" in Geneva. "Although the Report recognizes certain
positive aspects of intellectual property rights rules, it suggests
directions that will neither aid development nor improve access to
health care in developing countries," says Dr. Harvey Bale, Director
General of IFPMA.
Report correctly states that some IP protection is likely to be appropriate
for developing countries and that it can make an important contribution
to research and innovation in developed countries. (CIPR Report, p.6)
Second, the Report recognizes that, despite its restricted mandate
to review only the impact of IP policies on development, intellectual
property issues are only one element to promote development and better
access to medicines (CIPR Report Executive Summary, pp. 5-6). Third,
it correctly underlines the need for countries to adopt a range of
policies to improve access to medicines including additional resources
to infrastructure (CIPR Report, p. 39). Finally, it gives a fairly
balanced view of the role of existing intellectual property rules
in protecting and developing uses of traditional knowledge, and thus
expanding the stakeholder participation in the global regime of intellectual
the reports overall tone reflects a bias in the Commission to overestimate
the "costs" of IP rights, and to favor exceptions to TRIPS
rules and compulsory licensing. The CIPR Chairman was quoted in the
media as saying that patent rules "have gone too far."
Report exaggerates the negative aspects of intellectual property for
developing countries. Despite concerns expressed in the Report, more
and more developing countries recognize the benefits of patents for
pharmaceuticals and recognize that the significant issues of access
to medicines lie elsewhere - in partnerships, financing, political
and social commitment and infrastructure," says Dr. Bale.
all major developing countries and countries in transition from socialist
economies have already adopted TRIPS level protection (or even higher
standards) - including China, Brazil, Chile, Korea, Russia, Hungary,
Taiwan, Mexico, Jordan, Cambodia, and Thailand. The two major exceptions
- Argentina and India - had the only representatives from developing
countries as members of the CIPR. Dr Bale of IFPMA notes that, "Developing
countries have two models of IP protection to choose from - that of
China, Brazil, Mexico where economic growth is strong, foreign investment
is flowing in, there is no "brain drain" problem, and innovation
is beginning to take place or that of Argentina and India, both beset
by inadequate growth, a drain of skilled people to other countries,
no opportunity for innovation and (as in the case of Argentina) financial
chaos. I believe that the choice is clear."
compulsory licensing, the theoretical approach taken by the CIPR is
that weakening patents through forcing the patent holder (e.g., for
AIDS drugs) to license a product to a competitor will make medicines
accessible to millions of people not now served. Unfortunately, the
only significant beneficiary of compulsory licensing is the generic
company recipient of such licenses. "Copycat companies in Argentina
do not need licenses to get rights to manufacture drug innovations,
and yet their prices are often as high or higher than those of the
originator's prices or the prices of the same products in Brazil or
Mexico, where patents exist. And in India, there are no pharmaceutical
patents that could even theoretically block access to AIDS drugs there
and Indian "generic" companies freely copy drugs patented
elsewhere. Some companies promise to export AIDS drugs to other regions.
Yet of more than 500,000 AIDS victims in India needing access to AIDS
drugs, less than 3 percent actually receive drug treatments,"
maintains Dr. Bale.
countries in practice do not see compulsory licensing as a solution.
It is the combination of poverty, lack of access to sufficient international
financial assistance, the absence of trained medical personnel in
many regions of all developing countries, lack of diagnostic equipment,
lack of effective political leadership to address health as a priority,
and so forth. "These countries need assistance in building infrastructure
to address the healthcare needs of their populations," emphasizes
fact is that prices of drugs are independent of the issue of patents
and are driven by markets, like the prices of other products. Research-based
companies are offering AIDS and other drugs to developing countries
that are sometimes lower than even generic versions. What is needed
is not an "IP solution" but cooperation among stakeholders
- governments, international financial institutions, NGO's and industry
- to expand access to health care through improved infrastructure
and finance - and innovation in ultimately finding a cure and vaccines
for HIV/AIDS and other diseases. "This requires stronger IP rules
not weaker ones, changing companies that have capacity to do R&D
in India and Argentina from copycats to innovators," states Dr.
and perhaps most importantly, the CIPR, in its mandate to review IP
rules failed completely in its Report to address how TRIPS relates
to addressing a growing threat to developing country consumers and
to consumers around the world - the deadly trade in counterfeit medicines.
In Southeast Asia people are dying because many anti-malarial drugs
are fakes. Fake meningitis vaccines have killed thousands in Africa.
Dr. Bale notes that "The TRIPS Agreement has sound provisions
that will help to stem the rise in the export of counterfeit drugs
from one country to another. It is astonishing that despite growing
media attention to the seriousness of counterfeit medicines trade,
the Report ignores this danger completely, only referring to the existence
of counterfeit computer software."
negative attitude toward the relationship between IP and the interests
of developing countries, the Report overlooks one of the strongest
mechanisms - the TRIPS provisions on counterfeiting - to improve public
health worldwide," points out Dr. Bale. "In its misplaced
emphasis on alleged problems of patents the CIPR missed an opportunity
to help raise the issue of how the TRIPS Agreement can be of important
help in overcoming this menace of counterfeit drugs," he adds.
although the reports findings address an important issue, it reveals
very little new data. Most importantly, the report fails to underline
the real needs of developing countries to have strong intellectual
property protection in order to stimulate domestic Research and Development
as well as foreign direct investment.
intellectual property rights are essential as they provide incentives
and protection for innovation including research into finding new
drugs for diseases, which particularly affect developing countries.
Examples of these on-going efforts include important innovations in
HIV/AIDS and anti-malarial drugs. Further examples include public-private
R&D partnerships such as the Medicines for Malaria Venture (MMV)
as well as other productive partnerships to address diseases affecting
the developing world.
further information on these partnerships, please visit the IFPMA
web site: http://www.ifpma.org/.)