Access to Essential Drugs

hammer1.gif (1140 bytes) People’s Democracy

(Weekly Organ of the Communist Party of
India (Marxist)


No. 24

June 17, 2001

Access to
Essential Drugs

Amit Sen Gupta

AN International
symposium on TRIPS and access to medicines was organised by the National Working Group on
Patent Laws and Medecins Sans Frontieres (Doctors Without Borders) on June 4. This was
followed by a Working Group Meeting on “Intellectual Property and Access to
Drugs” in New Delhi India, on June 5 and 6, 2001. The meeting was held in the
background of MSF’s ongoing “Access to Essential Medicines” campaign and
the upcoming WTO Ministerial Conference. This Working Group, constituted of 25
international experts, has been set up by MSF to advise it in its campaign.


The widely
evocative issue of access to anti-retrovirals, i.e. drugs that are used to treat AIDS
patients, has played a major role in the way the international community today sees the
pharmaceutical industry. Treatment of AIDS with a combination of drugs—called Highly
Active Anti-retroviral Treatment (HAART) — has decreased mortality from AIDS by 84 per
cent in developing countries. Unfortunately less than 5 per cent of AIDS infected people
across the globe have access to such treatment currently, because the estimated cost of
treatment by HAART is about 12,000 dollars per person per year. At present rates,
Zimbabwe, Uganda and Ivory Coast would require to spend 265 per cent, 172 per cent and 84
per cent of their respective Gross National Products, just to buy drugs to treat all their
AIDS patients! This issue has been the rallying point of a major global campaign that
today is demanding a closer, critical look at the TRIPS agreement.

Condemnation of
the role of pharmaceutical companies reached a crescendo due to the lawsuit brought
against the South African government in Pretoria’s High Court by 39 pharmaceutical
companies. The lawsuit targeted a legislation by South Africa—the Medicines and
Related Substances Control Amendment Act, No. 90 of 1997 — which allowed the country
access to cheaper anti-AIDS drugs. The 1998 lawsuit was supported by the US government,
which placed South Africa on the Special 301 Watch List, and the European Union, which
wrote to then Vice President of South Africa, Mbeki, to express its concern about the
legislation. This move by the pharma majors evoked a massive counter-response across the
globe, led by MSF. The companies suffered a major defeat when, in April, 2001 the
companies capitulated to mounting anger and disgust over their conduct and agreed to
withdraw the case unconditionally.

About two months
back Brazil moved a resolution at the UN Human Rights Commission, which was approved by 52
votes in favor, 0 against and 1 abstention (USA). The resolution, among other things,
called upon States, at the international level, to ensure that “the application of
international agreements is supportive of public health policies which promote broad
access to safe, efficient and affordable preventive, curative or palliative
pharmaceuticals and medical technologies…”
Today many national governments in
third world countries are backing protests and demonstrations against the WTO in general
and the TRIPS regime in particular. global coalition countries in Africa, Latin America
and Asia, as well as organisations campaigning for access to cheap anti-AIDS drugs see
India as a potential source of cheap drugs. In March 2001, an Indian company, Cipla,
announced that it would offer the combination of anti-AIDS drugs at a cost of 600 dollars
per patient per year, and later announce that they could bring down costs to 350 dollars.
Cipla’s offer was matched within weeks by two other companies, Hetero Drugs and
Ranbaxy. These offers are, till date, by far the cheapest that have been made anywhere in
the world. In other words, Indian companies are now offering drugs to treat AIDS at prices
that are one fortieth of global prices! Such a precipitous fall in prices can
revolutionise AIDS treatment in developing countries, and save millions of lives.

The defeat for
the 39 pharmaceutical companies in South Africa is not the end of the battle. Every
country that has tried to interpret the TRIPS Agreement in a manner that allows access to
cheaper drugs for its people is faced with a hostile reaction from the US. But it has led
to the building of an unprecedented global coalition against the use of TRIPS to deny the
poor access to drugs.


Participants at
the symposium expressed concern at the trend in Intellectual Property protection, that is
increasingly skewing the balance of the rights of patent holders and consumers, in favour
of the former. Speakers noted that the TRIPS agreement marks a fundamental shift in
this balance, as well as a shift in global attitudes where private profits are put ahead
of social benefits. This is further fueled by dependence of economies in the developed
world on industries that require strong IP protection. Of the 15 most profitable
industries today, 6 are from the pharmaceutical sector and 5 from the IT sector. It was
also pointed out that IP protection allows such industries to create monopolies, not only
over production, but also in the control of knowledge.

The net result
of this trend, in the pharmaceutical sector, has been high cost of medicines and the
consequent denial of access to medicines by the income poor across the globe. Further, it
has also led to a situation where medicines required to treat disease that predominantly
occur among the poor are not researched at all. Instead drugs that are being researched
are drugs used for “lifestyle” diseases like baldness, impotence, obesity, etc.
It was underlined that while the pharmaceutical industry claims that high prices are
explained by the massive expenditure on R&D, the truth is that drugs they actually
research have little relevance to real medical needs. Moreover, the kind of profits that
big pharmaceutical MNCs generate are an indication of profiteering and not just legitimate
profit making.

Speakers at the
symposium also stressed on the need to utilise provisions available in the TRIPS agreement
to ensure production of cheap drugs by domestic manufacturers in developing countries. For
this, legislations in developing countries need to have licensing and other provisions
that prevent abuse of monopoly positions by MNCs and also allow imports of drugs from the
global market at lower prices. It was also pointed out that the next few years are going
to be crucial, as developed countries challenge laws enacted by developing countries like
Brazil in the WTO dispute settlement mechanism. The resolution in WTO of the complaint
made by the US against Brazil for violation of the TRIPS agreement because the former has
included provisions that allow it to produce cheap anti-AIDS drugs by licensing domestic
manufacturers, is being seen as crucial in this context.

Speakers also
commented on the adverse effect that TRIPS has on R&D and technology dissemination in
developing countries. It was pointed out that such capabilities, built up in countries
like India, Brazil and Argentine are under serious threat. The need to organise public
funded research in these countries was stressed. Representatives from the Indian Drug
Manufacturers Association and the Indian Pharmaceutical alliance spoke of the need to
tailor the Indian Patent Act – still at the drafting board—to the needs of domestic
industry, and domestic consumers.


Speakers also
expressed concern that there are already signs that the Indian pharmaceutical industry is
moving from a position of self reliance and relatively stable prices to a situation of
import dependence and high prices. Following the TRIPS accord, a large number of MNCs have
either closed down their plants in India or have sold them to Indian companies. This has
been done in anticipation of a change in the Indian Patents Act, in line with the TRIPS
accord, where imports are sought to be given the status as domestic manufacture. MNCs
who have closed or sold off their assets include Ciba Geigy, Boots, Roche, Abbott, Parke
Davis, Sandoz, Hoechst, Boehringer, Rhone Poulenc, Glaxo and Pfizer. It is estimated that
nearly 20,000 workers, employees, scientists and technicians have lost their jobs due to
the above closures.
Interestingly, none of these companies have ceased their marketing
in the country, but are getting their products manufactured in the small and medium scale
sector in India local small and medium companies.

With the
government allowing 100 per cent foreign equity in pharmaceuticals, these companies are
poised to close their marketing operations in the country and depend largely on drugs
imported from their parent companies. There are already ominous signs that there is
increasing import dependency in the Indian pharmaceutical industry. In 1998-99 out of 96
bulk drugs monitored by the government, 32 drugs which were earlier produced in India were
not produced at all! Even import of finished formulations have increased from Rs 17.3
million in 1994 to Rs 68 million in 1999, and in the first quarter of year 2000 this has
reached to Rs 90 million.

Those who spoke
at the Symposium include Mr S P Shukla, formerly India’s chief negotiator at GATT; Ms
Ellen ‘t Hoen, Co-ordinator of MSF’s Access campaign; Prof Prabhat Patnaik and
Prof Ashok Parthasarathy from JNU; Dr James Orbinski, Director MSF Working Group on Drugs
for Neglected Diseases; Dr Pushpa M Bhargava, Founder Director, CCMB; Dr Nitya Nand,
Chairman, NWGPL and Former Director, Central Drug Research Institute; Dr Arun Ghosh,
Former Member Planning Commission; and Mr James Love, Director, Consumer Project on
Technology (USA).

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