[Ip-health] News: Sudanvisiondialy - Human Development: From Poverty to Power

Marine Avrillon Marine at haieurope.org
Mon Nov 29 02:30:08 PST 2010

Human Development: From Poverty to Power

Posted on Sunday, November 28 


 Edited by: Alula Berhe Kidani

Oxfam International recently published an important book title: "From
Poverty to Power". "How Active Citizens and Effective States can change
the World". 


The book was edited by Duncan Green, Head of Research Oxfam GB and with
a forward from the famous economist and Nobel Laurete Amarti Sen.
Professor Sen argued that he is of the opinion of the British writer
George Bernard Shaw that, Poverty is evil and the worst crime. What is
important about this book reviewed is that it documents that the best
and most effective way in fighting poverty is the empowerment of the



Intellectual Property 



Ironically, even in the rich countries the proliferation of patents
threatens to undermine their purported aim. In many fields, firms
seeking to innovate must navigate through a 'patent thicket' protecting
existing technologies that they want to incorporate into a new design.

In stampedes such as the patent applications on hundreds of thousands of
gene sequences for fragments of human DNA, the hard slog of innovation
has given way to a Klondike-style gold rush of 'patent mining' as an
easy source of profits.



The role of technology in development follows a fairly standard path,
described by one UN report as 'a developed, innovating "North" and a
developing, imitating "South"'. All countries initially grow by
imitating and adapting existing technologies. As they approach the
global 'technological frontier', they move into innovation. One of the
reasons why countries such as China or India, which are in 'catch-up'
mode, grow so much faster than the industrialised countries is that
adapting existing technologies is much easier than creating new ones.



Historically, IP legislation has followed development: as countries have
grown richer, and as they evolve from imitation to innovation, they have
introduced more stringent IP laws. Chemical substances remained
unpatentable until 1967 in West Germany, 1968 in the Nordic countries,
1976 in Japan, 1978 in Switzerland, and 1992 in Spain, by which time
these countries' chemical industries had established themselves.66 This
pattern has been broken over the past 20 years by a combination of new
institutions such as the WTO and regional trade agreements and an
extraordinarily aggressive campaign by large corporations and their
home-country governments.

Global IP legislation also imposes a growing financial burden on poor
countries, through the costs of introducing largely irrelevant or
unsuitable IP laws to comply with the WTO and through the drain of
spiralling royalties to the owners of patents - almost always rich world
TNCs. In 2005, developing countries paid out a net $17bn in royalty and
licence fees, largely to companies in the industrialized nations. The
USA was the big winner from the system, earning a net $33bn,
considerably more than its overseas aid budget.

The spread of potentially damaging 'one size fits all' international IP
rules took off in the 1980s, when a number of pharmaceutical and other
companies scored the spectacular coup of persuading the US delegation to
include them in the Uruguay Round negotiations that led to the creation
of the WTO. Industry lobbyists overwhelmed opposition from the
secretariat of the GATT (which hosted the talks) to adding IP to the
agenda. The agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) introduced a global IP system, including a minimum patent
protection period of 20 years, along with protection for industrial
designs, trademarks, copyrights, and other IP rights. Unlike several
other WTO agreements, the TRIPS rules applied even to the poorest
developing countries, although they were given longer deadlines for

Nowhere have TRIPS been more controversial than in the drugs industry.
Each year more than ten million people in developing countries perish
from infectious and parasitic diseases, most of which could be treated
with existing drugs.68 Although there are other important factors behind
the death toll, such as dilapidated health services, high drug prices
are a key barrier to saving lives.



The vast majority of people in developing countries have to buy their
own medicines. For example, in India over three-quarters of all spending
on health services is out of pocket, of which 75 per cent is spent on
medicines.69 People in the developing world are thus acutely vulnerable
to high prices.

Pharmaceutical giants spend considerable amounts of money trying to
delay the introduction of off-patent generic versions of medicines for
as long as possible, and TRIPS rules are a vital part of their armoury
in this effort. The gap between the prices of patented and generic
medicines is large, for a variety of reasons: R&D costs are high,
relative to other industries, and the costs of copying a medicine are
usually very low; companies pursue very different business models, with
producers of patented medicines investing massively in advertising,
absorbing the cost in high prices, while generics concentrate on high
volume and low costs. As long as they can retain a monopoly,
pharmaceutical companies know that desperate people will pay whatever
they can for the medicines that can keep them alive: it is the epitome
of a sellers' market.

Prior to the creation of the WTO, some 50 developing countries either
excluded medicines from eligibility for product patents, or provided
shorter periods of protection and other safeguards.70 Thanks to flexible
IP regimes, India became known as the 'pharmacy of the developing world,
manufacturing most of the world's generic medicines and exporting them
to poorer developing countries. Since 2001, for example, competition
among Indian generics producers has driven down the cost of first-line
antiretroviral medicines from $10,000 per patient per year to the
current level of less than $100 per patient per year.

Although the poorest countries have a grace period until 2016, most of
them do not have manufacturing capacity and therefore have no means of
producing generic medicines for their populations. The damage is most
severe in the case of 'new diseases' such as HIV and AIDS, and other
diseases with rising incidences such as cancer and asthma, which require
new generations of drugs, all of which are under patent. In fact, access
to these medicines has already been curtailed because the world's major
producers of generic, low-cost medicines were obliged to implement the
TRIPS agreement by 2005.



The TRIPS agreement allowed some flexibility for developing countries to
override patent rules to protect public health, but this promptly
degenerated into a legal battleground as rich corporations and countries
turned to the courts in an effort to restrict them from doing so. In
2001, a group of 39 of the world's largest pharmaceutical companies took
the South African government to court over the terms of its 1997
Medicines Act. At that time around 4.5 million people in South Africa
were infected with the HIV virus, but the vast majority of them did not
have access to effective treatment, in part due to the extremely high
prices of ARVs. Other problems included the highly unequal health
infrastructure inherited from the apartheid period, lack of finance, and
lack of political will in some sections of the government to tackle HIV
and AIDS.

The companies decided to pursue legal proceedings despite the
devastation caused by South Africa's public health crisis, sparking
international condemnation. They argued that the Medicines Act, which
allowed 'parallel imports' (imports of cheaper patented medicines),
breached the TRIPS agreement, when in fact TRIPS is neutral on this
issue. Citizen campaigns (spearheaded by the Treatment Action Campaign
and including a global campaign by Oxfam and MSF) and public uproar
became such a serious threat to the drug companies' reputations that
they dropped the lawsuit.



The case also helped to galvanise the passage of the Doha Declaration on
TRIPS and Public Health, agreed upon by all WTO members prior to the
start of a new round of global trade negotiations in November 2001. The
Doha Declaration unequivocally recognized that the TRIPS agreement 'can
and should be interpreted and implemented in a manner supportive of WTO
members' right to protect public health, and in particular, to promote
access to medicines for all'.

The legal clarity of the Doha Declaration, combined with the bad
publicity from the episode, motivated some drug companies to stop
opposing the import or local production of generic antiretroviral
medicines, and to offer some of their ARVs and other medicines at lower
or 'no-profit' prices in sub-Saharan Africa. Yet such ad hoc initiatives
have mostly been limited to a few high-profile diseases (in addition to
HIV and AIDS, TB and malaria), and even for those diseases have fallen



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