[Ip-health] Robert Naiman in the Huffington Post: Brazil Should Lead on Access to Essential Medicines
thiru at keionline.org
thiru at keionline.org
Mon Oct 18 07:25:33 PDT 2010
Brazil Should Lead on Access to Essential Medicines
By the greater use of compulsory licenses, Brazil could lower drug
costs not only in Brazil, but in developing countries overall. At a
time when the New York Times is reporting that "the global battle
against AIDS is falling apart for lack of money," it is absolutely
essential that the price of lifesaving medicines in developing
countries be driven down to the absolute minimum possible.
With this in mind, I gave the following presentation on Oct. 11 at a
conference of doctors and health care workers in Sao Paulo.
I want to begin by establishing some context that I think is important
for understanding what it is that I am trying to communicate today and
what it is that I am urging you to do.
If you ask yourself, how did it come to pass that important social
reforms were won, an important part of the story is that groups of
people banded together to pursue what they perceived to be a
collective self-interest. You can't explain social change if the only
possible actor in your head is an individual who is either
individually self-interested or individually altruistic. Around the
world, human slavery used to be commonplace, now it is not, how did
that come to pass? You can't tell a story that makes sense without
collective action based on perceived collective self-interest.
If you look at the anti-slavery movement in the United States,
important leaders were themselves former slaves. You might say: That's
no surprise, they knew what they were talking about. But if they were
only acting on the basis of their individual self-interest, why
bother? They were already free. Why not simply enrich themselves and
tend their gardens?
Why is there a labor movement in Brazil or the United States? Why do
some people join such a movement? Why do some people apparently spend
so much of their free time trying to advance such a movement? Can we
really explain their behavior on the basis of individual
self-interest? There's clearly something else going on: a motivation
to act on the basis of a perceived collective self-interest.
In the United States, for example, when the government raises the
minimum wage, the major political force pushing the change is the
labor unions. You might say: That's obviously in their interest. But
very few union members are paid the minimum wage; most are paid
significantly more. Raising the minimum is not going to raise the
wages of many union members.
You could say, there is an indirect interest, because union members'
wages are determined in part by competition with non-union workers, so
if the wages of non-union workers fall too much, it's going to put
pressure on the wages of union workers. That's certainly true. But
it's important to understand that the unions, in pushing for an
increase in the minimum wage, are promoting a collective self-interest
that is broad, that extends beyond their own members. In the U.S.,
people in the labor movement call this "solidarity." I'm trying to
advance my interests, but I'm also trying to advance yours; you're
trying to advance your interests, but you're also trying to advance
mine. We're trying to advance together.
You could say all the forgoing observations should be obvious, and I
would emphatically agree. But they are not as commonplace as they
should be. You can go to college for years, take lots of classes, read
newspapers and books and magazines, listen to radio and TV, and never
or rarely see or hear anyone talking about the fact that important
social reforms occur because groups of people band together to pursue
a collective self-interest.
And thinking in terms of collective self-interest is essential for
understanding what I am about to say, and what I am going to ask you
You all know that we are in a new moment in world relations. The
relative power of the United States and Europe is declining. Brazil
and other "emerging powers" are starting to exercise more influence on
the world stage.
What is Brazil going to do with its new influence? The short and
obvious answer is: Brazil is going to pursue the national
self-interest of Brazil, just like every other country does. If we
asked every Brazilian candidate for federal office, do you think that
Brazil should pursue its interests? I would expect them all to say yes.
But how shall Brazil define the national self-interest that it
pursues? Shall it define that national self-interest narrowly, or
broadly? Here you have a real debate.
For example, a few months ago there was a spirited debate in Brazil
about Brazil's role in international diplomacy concerning Iran's
nuclear program. Some politicians and voices in the Brazilian media
said: Why is Brazil messing around with this? Brazil should mind its
own business. This reflected what the U.S. government and much of the
U.S. media were saying: Why is Brazil interfering in our turf?
But the Brazilian government said: We are minding our own business. If
some people in the U.S. government want to use war, the threat of war,
or sanctions to prevent Iran from enriching uranium, that's Brazil's
business, because Brazil enriches uranium, and therefore, it is in the
interest of Brazil to defend the right of Iran to enrich uranium. By
defending Iran's rights, Brazil was defending its own. As President
Lula said, "When we look at Iran, we see ourselves."
I give this example of a dispute over how broadly Brazil should
perceive the self-interest that it pursues because it's an example
that one could easily know about from watching the news or reading the
newspaper. Regardless of what one thinks about Iran's nuclear program,
this example shows there is a serious dispute, in Brazil and in the
world, about how Brazil should perceive its self-interest, narrowly or
But there is another very important example which one rarely sees
discussed unless one is looking for it, and that is the dispute
between countries like Brazil and countries like the United States
over what national laws and policies a country like Brazil should have
regarding intellectual property claims, in particular, regarding the
intellectual property claims of corporations headquartered in the
United States and Europe.
The US and Europe have worked to institutionalize globally a
particular set of rules and expectations regarding intellectual
property claims. This is a fairly recent phenomenon. Twenty years ago,
establishing rules regarding intellectual property claims was largely
considered a national affair.
But in 1994, when the World Trade Organization was created, the US and
other developed countries successfully added something called the
TRIPS agreement to the founding rules of the WTO. The TRIPS agreement
extended to developing countries in the WTO strong protections for the
intellectual property claims of corporations based in the US and
Western Europe. The promise of the WTO for developing countries was
that it would guarantee their access to sell in the markets of the
rich countries. So, essentially the US and Europe used the leverage of
access to their markets to impose a global set of rules on the
treatment of intellectual property claims.
It's important to understand that the addition of the TRIPS agreement
to the WTO had nothing to do with the classical theory of "free
trade." There is a longstanding, spirited debate about the theory of
free trade, and whether the grand claims that have been made about how
removing restrictions on international commerce would promote economic
growth were oversold. But the TRIPS agreement has nothing to do with
the principles of free trade.
When a government grants a patent or a copyright, it's granting a
legal monopoly, barring anyone from producing something besides the
patent or copyright holder. Granting a patent or copyright doesn't
lower prices through increased competition, the way free trade is
supposed to; it raises prices by removing competition. The grant of a
monopoly through a patent can raise the price of a patented drug
hundreds or thousands of times above what the competitive market price
There are arguments to be made in favor of patents and copyrights --
one can argue that they encourage innovation, for example, by
increasing the reward for the person who gets there first. But the
virtues of free trade are not among these arguments.
Note that I refer to "intellectual property claims," and not to
"intellectual property rights." I believe that you have the same
distinction in Portuguese. The brand-name pharmaceutical companies
love to talk about "intellectual property rights," as if these are an
inherent fact of nature. But patents and copyrights are not natural
rights, given by God or human nature. They are rights granted by
governments, with specific purposes. Historically, they were supposed
to promote the public's interest in the creation of useful inventions.
Having a particular policy with respect to patents or copyrights is a
policy choice, which should be evaluated according to whether it
promotes the public interest more or less than alternative policies.
To see that these are not natural rights, as most people would
understand it, you can compare them to things that we would all
consider to be natural rights. For example, I have a natural right not
to be killed. Note that it is permanent. I have a right not to be
killed today, next year, 20 years from now, as long as I am alive.
There's never going to be a law that says, you can't kill me now, but
you can kill me in 20 years.
Patents and copyrights aren't like that. They expire. Even in the
U.S., even under TRIPS, patents and copyrights expire. That indicates
that they are not natural rights. They are contingent. They are rights
granted by government for a particular time and purpose.
Dr. Jonas Salk, who developed the polio vaccine, was once asked who
owned the patent for the vaccine. Salk replied, "Well, the people, I
would say. There is no patent. Could you patent the sun?" Note that
Salk didn't say, well, I gave away my rightful patent because I love
humanity. He responded that the idea that it there would be a patent
on the polio vaccine struck him as ridiculous. That suggests that
patents are not natural rights. A natural right should be self-evident.
Because the TRIPS agreement was an add-on to the WTO pushed by the
rich countries, an add-on that had nothing to do with "free trade," an
add-on that implied a big transfer of resources from poorer nations to
richer nations who held patents and copyrights, it has been very
controversial. But far and away the most controversial aspect of the
TRIPS agreement has been its impact on the availability of essential
medicines in developing countries.
As you all know, some life-saving drugs are covered by patents, and
there might not be another drug available that has the same effect
that isn't covered by a patent. In this case, if you want the
life-saving effect, you have to pay a high price. This is a big
problem in the rich countries, but of course it is a much bigger
problem in developing countries. In some poorer countries, if a
life-saving drug is covered by patent, that is likely to mean that
many people simply won't be able to afford it. They won't get the
life-saving effect, and they will die.
Developing country governments knew this at the time the TRIPS
agreement was created. So a mechanism was put in to allow governments
to curb the power of patents to protect the public interest. The main
mechanism is the compulsory license. When a government issues a
compulsory license, it gives someone else besides the patent-holder
the legal ability to produce, while paying a small royalty to the
patent holder. That competition drives down the price.
But after the TRIPS agreement was signed, the same forces in the
developed countries that wanted the TRIPS agreement in the first
place, particularly the brand-name pharmaceutical companies, fought to
limit the ability of governments to use this mechanism in practice.
Working through the developed country governments, they threatened
trade sanctions and other punishments against countries that wanted to
use these mechanisms.
So in November 2001, under pressure from developing country
governments and treatment advocates, the WTO issued the Doha
Declaration on the TRIPS Agreement and Public Health. It reaffirmed
the ability of member states to limit patent rights to achieve better
access to essential medicines. It specifically affirmed the right to
issue compulsory licenses.
The Doha Declaration increased the political space for developing
countries to exercise their rights. But it did not end efforts by
multinational pharmaceutical companies and Western governments to
bully countries into not exercising their rights.
In August 2001, Brazilian Health Minister Jose Serra announced the
Brazilian government would issue a compulsory license for the
manufacture of the antiretroviral drug nelfinavir, whose brand name
was Viracept. This announcement came after unsuccessful negotiations
between the Brazil and Roche, the patent holder, to lower the price in
Brazil. A week later, Brazil and Roche reached an agreement that Roche
would sell the drug in Brazil at a 40% discount, and Brazil withdrew
its threat to issue the compulsory license.
I realize that you are at the height of your election campaign. I saw
the commercials on TV this morning. I mention Serra's name, rather
than just saying "Brazil's Health Minister," not because I am a Serra
supporter, which I am not, but because I want to document that, at
least to the level of threats, the use of compulsory licenses is a
longstanding Brazilian government policy, supported by both major
political blocs. In the Brazilian context, this is a mainstream idea.
What is at stake here is whether or not Brazil will pursue the policy
of compulsory licenses aggressively.
With one exception in 2007, the pattern for Brazil's use of compulsory
licenses has been that set by Serra in 2001: it never actually issued
one, but used them as a threat to force the drug companies to lower
prices in Brazil. As Mariangela Simao, the director of Brazil's
program against HIV-AIDS, told National Public Radio in 2008, "the
Brazilian way is always to negotiate prices."
In May 2007 Brazil issued a compulsory license for the anti-AIDS
medication Efavirenz, for which Merck had a patent. Brazil had been
negotiating with Merck for three years to bring down the price of
Efavirenz in Brazil. Brazil complained that Merck was charging Brazil
$1.59 per capsule while Thailand was paying only 64 cents per capsule.
Thailand had issued a compulsory license for Efavirenz in November
2006. Thus, when Brazil took its action in May 2007, it benefited in
two ways from the previous action by Thailand: Thailand set a
precedent by issuing a compulsory license for Efavirenz, and Thailand
set a benchmark for how low the price of the drug could go, which
Brazil was able to use in negotiating with Merck and then in
justifying politically its action to issue a compulsory license.
This positive spillover effect of the Thai compulsory license on
Brazil -- what economists might call a "positive externality" --
illustrates why for years treatment advocates have been lobbying
countries like Thailand and Brazil to issue compulsory licenses: not
just to lower the prices of lifesaving medicines in their own
individual countries, but also to lower the prices of lifesaving
medicines in developing countries overall. They wanted to set
precedents that would make it easier for other countries to act.
In the set of developing countries, Brazil is relatively privileged.
It can stand up to the U.S. and get away with it. Some poor country in
Africa might not be able to do the same. This fact creates a
responsibility -- privilege creates responsibility.
It might seem reasonable at first glance for Brazil to prefer to
negotiate with the drug companies more rather than move directly
towards promoting the production of generics. But that path has a cost
for Brazil and for other developing countries. Brazil negotiated with
Merck for three years before issuing a compulsory license. During
those three years, Brazil was paying significantly more than it could
have. If Brazil simply negotiates a lower price in Brazil, that may
not lower the price as far as it could go, and the effect of the
lower price may be largely limited to Brazil. If Brazil would
aggressively promote production of generic alternatives, it would
result in lower prices for Brazil, and lower prices for others.
Brazil, like India, has a generic pharmaceutical industry, but many
countries don't. It doesn't do you any good to have the right to issue
a compulsory license if you have no one to give the compulsory license
to who can produce a generic version of the drug. When developing
countries issue compulsory licenses to produce generic versions of
lifesaving medicines, the recipient of the compulsory license is often
the Indian generics manufacturer Cipla. This is a role that Brazilian
generics manufacturers could perhaps be playing, helping to improve
the accessibility of lifesaving medicines in other countries. There
have been some announcements by Brazil in the past that it would
provide lifesaving medicines to poorer countries, but as actually
implemented, these policies seem to have been very limited in scale
compared to the need.
If Brazil would issue more compulsory licenses, drug prices in Brazil
would be lower, from both direct and indirect effects. Thailand's
compulsory license helped bring about lower drug prices in Brazil. If
Brazil issued more compulsory licenses, others would too, and Brazil
As we all know, money is scarce. If Brazil negotiates a 60% reduction
in the price of a drug, one might be tempted to think, hey, Brazil got
a pretty good deal. But if the price of the drug could have been
reduced 90%, then 30% of what Brazil was spending on the drug is money
that Brazil left on the table for some foreign corporation to have,
instead of using that money, which belongs to the Brazilian people,
for the benefit of the Brazilian people.
There is a rich debate about patents and copyrights. It is argued that
patents and copyrights are necessary to encourage innovation, that
drug companies wouldn't spend money on research without the prospect
of patents and copyrights.
It is argued in response that there are alternative mechanisms for
funding research that would be more efficient. Indeed, in the U.S. the
government already spends more on biomedical research than the drug
companies do, and the current patent system encourages unproductive
and even destructive behavior by drug companies. Unproductive behavior
includes a research focus on lucrative copycat drugs or lifestyle
drugs at the expense of drugs that would be more socially useful but
not as profitable. Destructive behavior includes a tendency to mislead
governments and the public about the safety and efficacy of their
patented drugs, because the profits from doing so are so high.
But regardless of what one thinks about these arguments in general,
making lifesaving medicines available in developing countries does not
require taking on the whole system of patents as it now exists. There
is already a legal mechanism for making these drugs available, and the
drug companies are not going to come crashing down or stop developing
new drugs if developing countries make use of this mechanism. Drug
companies created new drugs before the TRIPS agreement was put in
place, and they will continue to do so if the power they gained from
the TRIPS agreement is reduced by the widespread implementation of
legal mechanisms to curtail the power of patents in the public interest.
Nationally and internationally, health budgets are finite. This past
week, the Global Fund to Fight AIDS, Tuberculosis and Malaria failed
to reach even its lowest "austerity level" fund-raising target which
it had said it needed just to keep putting patients on treatment at
current rates. The New York Times described this as "another signal
that the global battle against AIDS is falling apart for lack of
money." This shows why the price of AIDS drugs must be driven down to
the absolute lowest level possible in developing countries: the status
quo, the road that we are now on, is that some people are going to die
for lack of treatment.
So, I hope you see now why I started out talking about collective
self-interest. Brazil can advance further by advancing together with
other developing countries.
In the dispute over international diplomacy around Iran's nuclear
program, Brazil showed that it was capable of effectively advocating a
broad notion of self-interest. It might seem remarkable that in such a
high-profile confrontation with the U.S., Brazil did not back down.
And yet, with respect to making life-saving medicines more widely
available, Brazil is pursuing a far more cautious course.
I think that part of the reason for this is that issues of war and
peace get more publicity than issues of economic violence. Political
violence grabs our attention in a way that economic violence does not.
If you deny someone lifesaving medicines, you kill them as surely as
if you dropped a bomb on their house. But if you drop a bomb on them,
more people will notice.
I think Brazilian doctors and health care professionals have a unique
role to play here, a unique role in bringing these issues to public
attention and in shaping public opinion and the opinions of
policymakers. If you look at the remarkable success of efforts to
change policies in many countries to discourage smoking, public health
advocates played a big role. At some point in the past whether people
smoked cigarettes was largely considered a lifestyle choice of
individuals; a bad thing, perhaps, but not something that public
policy should be overly concerned about. Public health professionals
had a lot to do with turning this around.
I think Brazilian doctors and health care professionals could play a
similar role here, moving public opinion and policymakers in the
direction of a more robust campaign to make lifesaving medicines
affordable, not just in Brazil, but around the world.
This is not a pie-in-the-sky utopian project. In April 2010, Ecuador
issued a compulsory license for lopinavir/ritonavir, an AIDS
medication. When Ecuador announced its intention to issue compulsory
licenses last fall, it was praised by the health ministers of the
UNASUR countries, including Brazil. So this is not a wild, radical
idea; it's an idea that the Brazilian government officially supports.
The question is how aggressively Brazil will pursue it.
At the time Ecuador issued this compulsory license, the patented
version of the drug cost Ecuador's public health sector roughly $1,000
per patient per year. As a result of the compulsory license, Ecuador
was expected to be able to access generics for half that cost. For a
country like Ecuador, saving $500 per patient per year is a very big
deal. Actually, saving $500 per patient per year should be a big deal
for every country. If it were revealed that a developing country
health ministry were handing over $500 per patient per year to a
foreign corporation for nothing, would this not be a scandal? But in a
sense, that's what Ecuador was doing before it issued the compulsory
So, this is my appeal, that you take this up. I know that all your
plates are already full. It's the way of the world. It's the
already-busy who move things forward. I'm asking you to consider, as
Brazilian doctors and health care professionals, what you can do to
help move public opinion and government policy in Brazil in the
direction of a more aggressive policy towards making lifesaving
medicines more widely available. About what you can do, you know
better than me. But any effort, large or small -- a presentation, an
article, a letter to the newspaper, resolutions by professional
organizations -- could help tip the balance.
This is a critical time to try to expand this discussion in Brazil, as
the country is about to change presidents. The new president is going
to have some choices to make in foreign policy. One of those choices
will be how aggressively to push back against the intellectual
property regime promoted by the United States. Public opinion,
especially opinions expressed by advocates in the health sector, could
shape the outcome. Both major political blocs in Brazil have had a
policy of pushing back somewhat; both could have done more.
The last few years have already seen significant changes in the
international dynamics around these issues; the limited efforts so far
have led to some big decreases in prices. If the government of Brazil
would make this a priority, it could have a huge impact in the world.
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