Trade Pact Weakens Patent Protections

Washington, DC-Pharma companies suffered a significant setback last month when developing countries at the World Trade Organization meeting pushed through a declaration allowing nations to override patent laws to cope with health crises. Although industry officials insisted that the agreement would have little impact on profits, the language sets the stage for more competition from cheap generic products in much of the world.

Much broader economic and political issues shaped the WTO pharmaceutical declaration. US and European trade negotiators were desperate to avoid a debacle like the one in Seattle two years ago by gaining agreement from the 140 or so WTO members to launch a new round of global trade negotiations. From the beginning, it was clear that, for the talks to proceed, they had to resolve the health-patent issue.

Pharma companies went to the WTO talks in Doha, Qatar, expecting to take a hit. They hoped it would be sufficient to give poor nations an extra ten years (until 2016) to comply fully with the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement.

The trade envoys from Brazil, India, and other developing nations got the extra ten years-and much more. The TRIPS declaration specifies that WTO members may grant compulsory licenses to deal with urgent circumstances. That includes public health crises related to AIDS, tuberculosis, malaria, and "other epidemics," a phrase that observers consider broad enough to cover illnesses from diabetes to asthma.

Well prepared AIDS activists worked closely with developing-world trade reps to craft language clarifying that each member state is free to decide whether it needs to override intellectual property rights in the TRIPS agreement to cope with national emergencies.

Pharma leaders expressed relief that the delegates didn't reopen the entire TRIPS policy. A minor victory was an agreement to postpone deliberations about whether nations that don't manufacture pharmaceuticals should be able to break patents to import cheap generic products from countries-such as India and Brazil-that do. Industry leaders emphasized that the declaration still recognizes WTO members' commitment to TRIPS and the importance of intellectual property protection for the development of new medicines. But the new decision is likely to encourage poor nations to press manufacturers for cut-rate prices on needed medicines.