NAFTA, WTO, and Global Business Strategy: How AIDS, Trade, and Terrorism Affect Our Economic Future

By Bradly J. Condon | Go to book overview

Chapter 4

Intellectual Property

OPENING CASE: THE PHARMACEUTICAL INDUSTRY, THE WTO AND THE AIDS CRISIS

On April 27, 2001, African leaders ended the continent’s first AIDS summit by declaring a state of emergency and vowing to make the fight against the disease their highest development priority. They agreed to create legislation to ensure that cheap HIV and AIDS drugs were made available and said they would immediately start removing taxes on drugs and would introduce other incentives to reduce drug prices. They supported the call by the secretary-general of the United Nations, Kofi Annan, at the opening of the conference for a seven-to-ten-billion-dollar global AIDS fund. They urged developed countries to support Africa’s fight against AIDS by donating 0.7 percent of their respective gross national products to developing countries. They planned to seek changes at the WTO to permit drug patent laws that would make treatment affordable for most Africans. 1 This later became the biggest issue dividing developed and developing countries as they prepared the agenda for the WTO meeting in Doha, Qatar, in November 2001.

The AIDS crisis created a global policy dilemma. The interests of the pharmaceutical industry are served by strong intellectual-property rights and the ability to charge the highest prices the market will bear. Developed countries face conflicting interests—on the one hand, strong patent protection benefits their pharmaceutical industries; on the other hand, high drug prices raise health care costs, even if they can afford high prices. Developing countries are in the most difficult position—they have been hardest hit by AIDS and cannot afford developed-country prices for the drugs. Finally, the global nature of the pandemic requires a global

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