Academic journal article Journal of Australian Political Economy

Australia's Position on Medicines Policy in International Forums: Intellectual Property Protection and Public Health

Academic journal article Journal of Australian Political Economy

Australia's Position on Medicines Policy in International Forums: Intellectual Property Protection and Public Health

Article excerpt

Universal access to affordable medicines, which are safe, efficacious and of high quality, and which are appropriately used, depends on national legislation that is in turn constrained by a range of international agreements. This regulatory configuration also affects the profitability of the pharmaceutical industry, domestic and international. Tensions and contradictions between industry profitability and public health objectives relate to access, innovation and regulation.

High levels of intellectual property (IP) protection (including easy patenting, generous privileges and strong enforcement) enable longer monopoly pricing which contributes to pharmaceutical industry revenues but increases the cost barriers to consumers and the cost burden on national health systems. The access barriers associated with monopoly pricing are particularly steep for poor people with little or no social protection and are particularly burdensome for developing countries (Abbott and Dukes 2009).

High levels of IP protection are said to be necessary to fund corporate research and development (PhRMA 2013). However, funding research and development (R&D) through monopoly pricing also means that investment is selectively directed to the development of drugs which promise high commercial returns. A WHO Commission concluded in 2006 that the development of drugs for conditions which disproportionately affect people living in developing countries has been neglected because of poor expected returns (Commission on Intellectual Property Rights Innovation and Public Health 2006). High profit margins also support aggressive marketing which contributes to the over-use and misuse of medicines and further financial burdens on families and governments.

Since the advent of the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement in 1995 there has been a gradual but significant strengthening of IP protection, including for medicines, through successive bilateral and plurilateral free trade agreements (Lopert and Gleeson 2013; Roffe et al. 2007; Drahos 2002).

The TRIPS Agreement committed signatories to providing 20-year patent terms in all technology areas and for patents to be available for both products and processes (WTO 2010). Many developing countries resisted the new IP standards embedded in TRIPS but, as Drahos tells it (2002), they were ultimately coerced into agreeing. The principles enshrined in the agreement are implemented domestic legislation, which provides governments with some flexibility, as confirmed by the 2001 Doha Declaration on the TRIPS Agreement and Public Health (WTO Ministerial Council 2001; Scherer and Watal 2001). The term 'TRIPS flexibilities' refers to the discretion available to WTO members in amending domestic patent laws to conform to TRIPS. In particular, it is legal under TRIPS to legislate for the issuing of compulsory licenses and for 'parallel importation' (sourcing drugs available on the open market in other countries where these are available at lower prices than are charged by the domestic distributors). These are important flexibilities but they need to be articulated in domestic law for implementation.

There has been powerful opposition to developing countries seeking to utilise the flexibilities available under TRIPS, most famously when a consortium of 39 international pharmaceutical companies sued the government of South Africa over its use of parallel importing (Heywood 2009). This was at a time when HIV medications and other branded medicines were priced far out of the reach of patients in developing countries. The drug companies were supported by the Clinton administration, which also placed South Africa on its 301 Watch List as a precursor to trade sanctions. An international coalition of non-government groups mobilised in solidarity with South Africa. The pharmaceutical companies were effectively shamed through bad publicity and the legal case was withdrawn (Gray and Vawda 2013). …

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