Americans pay some of the highest prices for drugs in the world. We do so mainly because of our free market and our willingness to shoulder most of the global costs of new drug development. If not for the innovative work being done by the American pharmaceutical industry, global development of new drugs would slow to a crawl. Access to free world markets is critical to sustaining medical progress and ensuring that the rest of the world pays their fair share of research costs.
This important goal must recognize that the poorest countries initially need to be exempt from this social contract in order to promote public health. Hence, this week, the United States and some of the world’s poorest countries have agreed to exempt medicines ? most of which are developed by American firms — from trade rules that would require every nation to abide by patent protection laws by 2005. This exemption would allow the poorest nations, like Nigeria, South Africa and Bangladesh, to import or produce generic versions of any medicine developed after 2005 that they deemed necessary for public health as a way of reducing their cost.
Drug costs are not the most significant barrier to improving public health in developing nations. Measles vaccines are free in Africa, and yet a half a million African children still die of that disease every year. Rather, underfunded public health infrastructure, civil wars, and rampant government corruption have all sapped the ability of developing nations to respond to AIDS, malaria and tuberculosis epidemics.
Patents have rarely been a barrier to obtaining or paying for medicines in poor countries. Pharmaceutical firms rarely filed patents in developing nations because the market for their medicines there was negligible. Nearly 100 percent of the drugs the World Health Organization regards as essential are off-patent. Developing countries always had the right to effectively ignore drug patents for public health purposes and license generic companies to produce needed drugs through a process called compulsory licensing.
Still, accelerated access to cutting-edge medicines in the poorest countries will help. The agreement gives these nations a permanent exemption for patents in developing countries for any disease, provided that the exemption is limited to humanitarian organizations and non-commercial uses. Any drug production in violation of patents would be for the sake of the public health, not for profit. Rich and middle-income countries would be excluded from the exemption. Generic firms would have to make an effort to ensure that drugs actually wind up treating people, and are not stolen or diverted to profiteers.
The only interests objecting are so-called humanitarian groups like Oxfam and Medicines Sans Frontiers. (MSF). They, along with generic drug companies, are working hard to torpedo this proposal at the World Trade Organization. They don’t want to limit the generic patent exemption to humanitarian production and to poor countries. Incredibly, Oxfam opposes the humanitarian limitation because it doesn’t ? and these are its words — “provide an economic incentive to export generics.” Translation: the same activist groups that bash drug companies for putting profits before people’s lives now oppose limiting patent exemption to humanitarian relief because it will limit generic drug firm profits in developed countries.
The so-called activists wants to allow generic drug companies to export products to any country ? even the richest — at any time once a country issues a compulsory license. And they want to allow most countries to declare a public health need for any disease to allow them to either begin to manufacture or import a generic version of a new drug under a compulsory license so they can fatten their bottom line. What’s French for hypocrite? Medicines Sans Frontiers.
Generic firms aren’t interested in the diseases afflicting poor countries. If they were, they would have developed a generic drug under a compulsory license or a medicine that was off-patent years ago. Instead, under the Oxfam approach, they have lobbied their health ministries to declare erectile dysfunction a public health crisis so they can produce and export generic versions of Viagra to developed nations, as happened in Egypt.
If the activists win, American consumers will pay even more to subsidize new drugs for Europeans and other wealthy nations. Meanwhile, the production of essential medicines will slow to a trickle as profits plunge. Oxfam and other groups purport to help the poor, but their real agenda is an ideological crusade to undermine America’s free market in drug development. That they are not beneath acting as a Trojan Horse for the generic drug industry in the process should only strengthen the resolve of our government to get the entire WTO to ratify an agreement that protects our consumers and promises better health in developing countries in the years ahead.
Robert Goldberg is a senior fellow of the Manhattan Institute and director of the institute’s Center for Medical Progress.