Implications of the Trips Agreement for Developing Countries: Pharmaceutical Patent Laws in Brazil and South Africa in the 21st Century

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I. INTRODUCTION

On January 1, 1995 the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) became effective as part of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT).1 Compliance with the TRIPs Agreement requires member countries of the World Trade Organization (WTO) to establish minimum standards of intellectual property protection for foreign and domestic products and processes, including the implementation of pharmaceutical patent laws.2

Prior to WTO membership status, developing countries were able to circumvent paying the expensive prices charged by multinational pharmaceutical companies by purchasing or manufacturing comparable generic products for a small percentage of the market price.3 Before the enactment of the TRIPs Agreement, patent protection for pharmaceutical products was virtually nonexistent in many poor, developing nations.4 Consequently, the generic drug market flourished, enabling the costs of pharmaceuticals to remain relatively low.5 Piracy of patented drugs became prevalent too, as an alternative means of accessing inexpensive but illicit versions of patented pharmaceuticals.6 Post-TRIPs, however, developing countries must attempt to resolve the inherent conflict between the implementation of internationally-acceptable pharmaceutical patent laws and the need to maintain affordable medicine within the poorest communities.

Within a single multilateral agreement, it is particularly difficult to achieve synthesis of the demands originating from multinational pharmaceutical companies and the exigent concerns of developing countries during times of catastrophic health crises. Proponents of strict pharmaceutical patent laws emphasize the potential gains to be realized by pharmaceutical manufacturers and consumers as a result of protecting intellectual property on a global scale. There are, however, circumstances that justify the subordination of international intellectual property obligations, including the TRIPs Agreement, in an effort to allow public health issues to prevail.

Brazil and South Africa provide examples of the complex issues confronting WTO member countries attempting to bring domestic patent laws into compliance with TRIPs. In both South Africa and Brazil, the governments must confront the challenge of creating an effective, enforceable, domestic intellectual property infrastructure without neglecting the medicinal needs of the increasingly vast population of citizens dying from AIDS.7 Although Brazil enacted the Industrial Property Law8 in 1997 in an attempt to fulfill TRIPs requirements, the WTO recently agreed to review allegations by the United States that Brazil's law violates TRIPs by limiting patent protection only to those foreign patent holders that produce pharmaceuticals within Brazil.9

In South Africa, domestic conflict over the status of South Africa's pharmaceutical patent law prompted the Pharmaceutical Manufacturers' Association of South Africa (PMASA), which represents South African subsidiaries of approximately forty multina- tional pharmaceutical companies,10 to initiate a legal challenge to

South Africa's Medicines and Related Substances Control Amendment Act of 1997.11 While the AIDS crisis in South Africa fueled new urgency for the availability of inexpensive medication to combat the disease, the drug manufacturers contended that the Medicines Act violated the TRIPs Agreement because it empow- ered the Minister of Health to permit national drug manufacturers to reproduce generic versions of patented drugs.12 Before any protraded the litigation, the parties settled the lawsuit. The South African government agreed to implement new law in accordance with the TRIPs Agreement, while the pharmaceutical industry agreed to continue the research and development in new medicines and vaccines. The agreement was a sign of recognition that a resolution between the competing demands of a government struggling to control the AIDS epidemic and the patent rights of multinational pharmaceutical companies could only come from cooperation rather than litigation. …