Essential Drugs in the New International Economic Environment

By Velasquez, German; Boulet, Pascale | Bulletin of the World Health Organization, March 1999 | Go to article overview

Essential Drugs in the New International Economic Environment


Velasquez, German, Boulet, Pascale, Bulletin of the World Health Organization


Voir page 291 le resume en francais. En la pagina 292 figura un resumen en espanol.

Globalization and health

The term "globalization", as well as describing current world economic trends, prescribes a strategy of development based on the liberalization of markets and on the assumption that the free flow of trade, finance and information will produce the best possible outcome for economic development. However, as the Human Development Report for 1997 pointed out, "globalization has its winners and its losers. With the expansion of trade and foreign investment, developing countries have seen the gaps among themselves widen.... Poor countries often lose out because the rules of the game are biased against them, particularly those relating to international trade. The Uruguay Round hardly changed the picture" (1)

Globalization has serious implications for states, particularly for the role of the state in developing countries where the imperative to liberalize has led to reduced state involvement in the social sectors. The opening up of markets has, for instance, limited the possibilities for governments to subsidize health services for the poor. After a drastic privatization process, many states have become too weak to oppose powerful international groups (2). Structural adjustment programmes and globalization seem to weaken state influence, and current world trends clearly demand stronger states to preserve people's rights and maintain equity of access to the social sector, particularly to health services and drugs.

New international rules on drug patents

The Uruguay Round of negotiations on multilateral trade led to the creation of the World Trade Organization (WTO), which became operational in January 1995. Its purposes are to help the smooth flow of trade in a system based on mainly non-discriminatory rules, to settle trade disputes between governments, and to organize trade negotiations. It also supervises global trade agreements that were negotiated and approved during the Uruguay Round, which are essentially contracts binding all Member States to keep their trade policies within agreed limits.

Among these agreements, the Agreement on Trade-Related Intellectual Property Rights (TRIPS) links intellectual property and trade issues for the first time and provides a multilateral mechanism for settling disputes between states on intellectual property. This Agreement is the most comprehensive ever reached on intellectual property. It establishes minimum universal standards for almost all rights in this field (such as copyrights, patents, and trademarks) including patent protection for pharmaceutical products, which may have a significant impact on access to drugs in developing countries.

The purpose of intellectual property laws is to protect and reward inventors. Inventors who file patent applications in a particular state are asking that state to recognize their exclusive right to inventions within the state's territorial boundaries, and therefore to exclude others from the use of the inventions without the inventors' authorization and the payment of compensation (i.e. royalties). Because knowledge, unlike consumer goods, can be shared by any number of persons without being diminished, inventors are dependent on such legal protection against direct copying or use of the products or processes they have invented. The adoption of new international rules on the matter has been actively promoted by most industrialized countries in order to obtain worldwide protection for the innovations they generate.

The TRIPS Agreement provides minimum standards for the protection of intellectual property, and each Member State of WTO is required to incorporate these into its own laws before specified transitional periods have elapsed. Provisions in the TRIPS Agreement regarding patents, trademarks, health registration data and other items set the basic framework that virtually all countries are expected to follow, or they may be claimed before the WTO dispute settlement body.

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