The Nation, Bangkok
EDITORIAL: Health at stake in free-trade talks
February 08, 2006
Negotiators for the Thai-US FTA must understand the full importance of pharmaceutical patent rights. Intellectual property rights, particularly as they relate to pharmaceutical patents, represent one of the most contentious issues for negotiators trying to thrash out the Thai-US Free Trade Agreement (FTA).
This is not only because of the complicated nature of the subject and the related regulatory labyrinth, but also because of the strong economic and social implications intellectual property has for a developing country like Thailand. To understand the importance of intellectual property rights in general, and pharmaceutical patents in particular, let us first look at where the US and Thailand stand.
For the United States, intellectual property rights represent the single most valuable asset in light of the new reality of information-based economies and where they derive their national wealth. The supremacy of the US as a global power depends on how effective it is in acquiring and maintaining its ownership of knowledge assets.
From Thailand’s point of view - which, by the way, is basically not much different from that of any other developing country - we find ourselves at the receiving end of inequalities and problems related to this global redistribution of property rights in information. Compared to the US, Thailand holds claim over very few intellectual property rights that it can exploit economically. Worse, it also lacks the wherewithal to acquire marketable knowledge assets that people in the rest of the world want.
To be more specific, the US dominates the world market in pharmaceutical products and it intends to continue to do so to maximise profits and make sure that the rest of the world continues to depend on it as the main source of innovative medical goods. In other words, the US is only doing what it does best to innovate, to develop new products that people want, bring them to the market, maximise profits, plough back much of the money into costly research and development efforts to stay on top of the game, and so on.
Thailand, on the other hand, is typical of developing countries in that it depends on the US and other technologically advanced countries as the main source of usually high-priced drugs that people want because of their efficacy, effectiveness and safety. The Thai pharmaceutical industry continues to operate at the lower rung of the innovation ladder and will likely stay there for the foreseeable future.
FTA negotiations are bringing these inequalities and the virtual monopoly of knowledge assets by the US into sharper focus. The harder negotiators from both sides try to clinch the Thailand-US FTA, the more pharmaceutical patents and related issues become a topic of public debate. In Thailand public-sector medical professionals, who have long played an active role in shaping a socialistic approach to the country’s public health policy, are the most vocal critics of US proposals on pharmaceutical patents.
And this is not without good reason. The US negotiators are pushing hard for Thailand to accept a market-exclusivity extension for patented pharmaceuticals, which is the main thrust of the US’ objectives in the FTA negotiations with Thailand. This market-exclusivity extension covers patent-term compensation due to delays in patent approval and market authorisation, restrictions on compulsory licensing to cases of government use in the event of a national health crisis, five-year data exclusivity for original drug producers (protection of clinical test information of original drugs, which is an indispensable reference for market authorisation).
Even at this late stage of negotiations, the general Thai public appears to be oblivious to this aspect of the FTA negotiations, which could have a major impact on their quality of life, equality, and the cost of the public health system.
Extending the patent term would mean pharmaceutical companies could continue to monopolise the sale of their original drugs at the expense of Thai consumers because generic-drug manufacturers would be prevented from producing cheaper versions of these medicines.
Thai negotiators must conduct a careful cost-benefit analysis before making any tradeoffs on these controversial issues, which could have a serious impact on Thailand’s public-health system and the quality of life of people for years if not generations to come.
This is no ordinary quid pro quo that should be taken lightly at the negotiating table.