Patents vs. People
Love, James, Multinational Monitor
INTENSE PRESSURE BY U.S. TRADE NEGOTIATORS and multinational drug companies on Argentina to adopt wider-reaching intellectual property laws may succeed in eradicating the Argentine system of providing relatively cheap pharmaceuticals to its citizens.
Argentine drug companies competitively manufacture and sell a wide variety of drugs that are controlled as legal monopolies under patent laws in the United States and other countries that extend patent protection to pharmaceutical inventions. Argentina, which does not issue patents on drugs, currently boasts one of the world's largest pharmaceutical industries and drug prices are generally far lower in Argentina than in countries that do enforce patent protection on pharmaceutical drugs. Domestic Argentine companies currently control roughly half of the $3 billion Argentine market for pharmaceutical drugs.
For many years, multinational drug companies have been trying to change national policy in Argentina by lobbying the Argentine government, funding "think tanks" which promote the use of patents for pharmaceuticals and lobbying the United States and other countries to impose stiff trade sanctions against countries which do not recognize patents on pharmaceuticals.
While attempts to persuade the Argentine government that it is in the country's best interest to recognize patents on pharmaceutical drugs have failed, multinationals have been quite successful in obtaining help from U.S. trade negotiators. The U.S. Trade Representative has lobbied extensively for tough intellectual property provisions in the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT) and has been very aggressive in bilateral negotiations, threatening Argentina and other countries with trade sanctions if they don't adopt laws providing U.S.-style intellectual property rights for pharmaceutical inventions.
The costs of yielding to U.S. demands would be high for Argentina. Argentine drug companies stand to lose hundreds of millions of dollars if the Argentine government adopts the patent law changes sought by the multinational drug companies and the U.S. trade negotiators, as a monopoly patenting system would give exclusive control of many drugs to U.S. and other multinational pharmaceutical corporations. Argentine consumers would also suffer, since the country's current pro-competition system has led to much lower prescription drug costs.
In response to pressures from U.S. trade negotiators, the Argentine executive branch asked the Argentine Congress in 1991 to consider legislation that would fundamentally reform the country's intellectual property laws and extend patent protection to pharmaceutical drugs. The legislation met stiff domestic resistance from the Centro Industrial de Laboratorios Farmaceuticos Argentinos (CILFA), the trade association representing domestic Argentine pharmaceutical companies.
In spring 1994, the United States dramatically increased the pressure on the Argentine government. In late March, Vice President Al Gore, on an official visit to Argentina, announced that unless Argentina passed U.S.-backed legislation on pharmaceutical patents, it would be included on a list of "priority foreign governments" to receive trade sanctions from the United States. After he met with Gore, Argentine President Carlos Menem told the Argentine newspaper Pagina, on March 22, that Argentina would not be included on a "short list" for entry into NAFTA unless it passed legislation on pharmaceutical patents.
On April 30, 1994, U.S. Trade Representative Mickey Kantor announced that he was giving the Argentine government just 60 days to pass U.S.-backed legislation on patents or face trade sanctions from the United States under Section 301 of the U.S. Trade Act.
Kantor's threat, together with high-profile lobbying by U.S. Ambassador James Cheek, sparked a backlash in the Argentine Congress and embarrassed the Menem administration, which until then had been highly supportive of U. …