- The Washington Times - Tuesday, November 26, 2002

"We're not making a lot of progress," a U.S. trade official told us yesterday regarding efforts in Geneva to launch a new round of world trade talks. "There seems to be a fair amount of give and take: People give something and then they take it back."
At issue are intellectual property rights the laws that protect innovators and inventors from having their work pirated. Last November, trade negotiators agreed to provisions that grant the poorest countries the ability to purchase cheaper generic drugs to treat rampant diseases like malaria, tuberculosis and HIV/AIDS. Now, there's a much-needed move to clarify some of these exemptions, but left-wing activists and the generic drug industry have combined to aggressively expand them. Thanks to some pliant trade ministers, draft language currently circulating contains legal holes that would allow virtually any country to declare any ailment a "public health problem." Indeed, in August, Egypt did just that with erectile dysfunction. Now, 12 companies produce knock-off Viagra at knock-off prices to combat this so-called crisis.
Not surprisingly, the pharmaceutical industry would like some strong language that limits the patent waivers to their original intention. But so far, U.S. Trade Representative Robert Zoellick has hit a dead end, and the fear is that he may cede ground.
The temptation to do so is strong. The World Trade Organization is a house of many mansions, and bad blood spills throughout. If a solution to the patent problem isn't reached, efforts to cement other trade deals could be at risk. In addition to a new round of world trade talks, Mr. Zoellick's hope to gain bilateral trade agreements with other partners could be dashed. Many of those partners, such as Singapore and the Americas, stand to benefit greatly from looser patent protections in the drug industry. Their willingness to cut deals later on hinges on how well they are humored, and Mr. Zoellick may feel that the only way to pave the way for future progress is by appeasement now.
Of course, opening markets is an important and worthy goal. Greater competition drives greater innovation, and that benefits everyone. However, free trade's success isn't measured by how many agreements are signed, but on how the world marketplace is best served.
That's where the unlikely alliance of anti-capitalist fringe groups and aggressively capitalist generics companies falls short. All the wonder drugs out there now are made possible because of intellectual property protections, not in spite of them. After all, it isn't governments (much less generics) that develop these treatments. Terry Barnett, president of pharmaceutical company Novartis' American operations, didn't mince words in his prediction. Soft patent protections "would threaten the innovative capacity of the industry," he told us.
The victims would not just be the pharmaceutical CEOs, but everyone everywhere. Profits are just the seed capital that goes into finding new cures. Only three of every 10 new medicines that go on the market break even and only two of those actually make money. And that's just the tip of the iceberg. The pharmaceutical industry spends billions of dollars in research and development that lead to dead ends.
Indeed, pharmaceutical companies do more to help the world, rich and poor, than left-wing agitators and drug pirates. In standing firm for patent protections on drugs, Mr. Zoellick can protect not only an American industry's interests, but the world's interests, too.


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