Thursday, November 30, 2006

Bargain Junta-ing


Developing countries often use the rhetoric of "breaking patents" as a bargaining device to encourage Western pharma- ceutical companies to cut the prices they charge for patented drugs. However, very rarely does the rhetoric lead to actual compulsory licenses. High profile patent fights, such as Brazil's 2005 threat to break Abbott Laboratories' patent covering Kaletra, an antiretroviral useful against HIV, usually result in negotiated settlement; to avoid a compulsory license, Abbott Laboratories agreed drastically to reduce the price it charged Brazil for Kaletra. Similar threats in south and east Africa have yielded similar discounts without resort to compulsory licensing.

Enter Thailand's latest military junta. Rather than waste time negotiating, it simply announced that it will issue a compulsory license on Merck's Efavirenz, another drug used to treat HIV. Such decisive action, though likely to praised by health advocacy groups, would appear to violate the spirit, if not the letter, of both the Paris Convention for the Protection of Intellectual Property (Article 5) and the Agreement on Trade Related Aspects of Intellectual Property (Article 31). Given that the AIDS crisis in Thailand was already severe prior to this year's overthrough of democracy, the explanation for the drastic change in policy resulting in the compulsory license appears to be the military. In response, Abbott Laboratories immediately offered to cut the price it charges for Efavirenz if Thailand agrees to reverse its decision. Perhaps Thailand's soldiers prefer the ease of issuing orders to drug companies to the civilian messiness of negotiation.

The compulsory license does place human rights campaigners on the horns of a dilemma: can they praise the result - cheaper drugs for the ill - without seeming to support a military dictatorship? Thailand's junta may have chosen well to pick on a western pharmaceutical company, one of the few parties even lower down the totem pole of popularity in the developing world.

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