The Least Developed Countries (LDCs) have submitted a "duly motivated" request to the WTO TRIPS Council for an extension of the transition period for them to comply with the TRIPS Agreement "for as long as the WTO Member remains a least developed country". The request was submitted by Haiti, on behalf of the LDCs, at a meeting of the TRIPS Council on 6-7 November 2012. The exemption will continue to allow LDCs to access affordable medicines without the risk of violating patents on the medicines. Haiti argued that because of their extreme poverty, LDCs need the policy space to access various technologies, educational resources, and other tools necessary for development. Furthermore, LDCs have such small economies that they do not represent a significant loss of profits for pharmaceutical patent owners. Most intellectual property-protected commodities are simply priced beyond the purchasing power of these countries’ governments and their nationals, the spokesperson for Haiti added. Haiti has asked for this issue to be put on the agenda of the next TRIPS Council meeting, scheduled to take place in March 2013.
Health equity in economic and trade policies
Pharmaceutical spending in Africa is expected to reach US$30 billion by 2016, driven by increases in incomes and the shifting nature of its disease burden, according to this article. Non-communicable diseases (NCDs) are expected to account for 46% of all deaths in sub-Saharan Africa by 2030, up from 28% in 2008. As a result, big pharmaceutical companies are now expressing interest in new opportunities opening up for treating chronic, non-communicable diseases (NCDs), particularly in African middle classes. The author projects that the pharmaceutical market in Africa will grow in the next decade.
Economists have predicted that tobacco consumption will double in the next 12 to 13 years in Sub-Saharan Africa unless anti-smoking policies are adopted. Besides impoverishing families, an increase in the consumption rate will result in an increase in disease burden that will generate unaffordable health costs. Implementing smoke-free policies in Africa remains a problem, however, largely due to tobacco industry interference, insufficient financial and human resources, lack of support from government officials and legislators and poor involvement of civil society. However, the author argues that poor compliance, as well as poor, often non-existent enforcement and monitoring and surveillance systems are the real threats to smoke-free laws in Africa. Therefore, there is a crucial need for efficient implementation strategies, along with proper monitoring and surveillance systems on the one hand; and on the other, a need for scientific research in order to evaluate the effectiveness of smoke-free policies in Africa.
In this report, the authors provide an in-depth evaluation of debt cancellation measures the Democratic Republic of Congo (DRC) that took place at the beginning of the 21st century. As a proxy for the effect of debt relief, the authors of this report looked into the education sector for evidence of improvements following the debt cancellation. Some positive changes, notably in the payment of wages, were found that correlated with the debt relief, but these changes did not reach further than the headquarters of the ministry of education in Kinshasa. They identified two new issues: the growing need to question the legitimacy of ‘odious debt’ incurred during a dictatorship without the population ever having received any benefits from it; and the ongoing fight against vulture funds and other rogue creditors, which buy up the debt of poor developing countries at very low prices and then sue them to enforce payment of the nominal value, including arrears of interest. Legislation outlawing the seizure of Overseas Development Assistance (ODA) funds and state-to-state loans would be an important step in that direction, the authors argue. Belgium has already passed a law to protect its ODA grants against seizure and also intends to audit the ethical basis of all sovereign credits on developing countries. (Please note that this report has only been issued in French – the English version is forthcoming.)
Advocates of capital market liberalisation argue that it leads to greater stability, as countries faced with a negative shock borrow from the rest of the world, allowing cross-country smoothing. However, the author of this paper argues that there is considerable evidence against this conclusion. He explores in detail the ways in which market integration can exacerbate contagion, whereby a failure in one country can more easily spread to others. The author examines the conditions under which such adverse effects overwhelm the putative positive effects, illustrating how capital controls can be welfare enhancing, reducing the risk of adverse effects from contagion. This paper is intended to provide an analytic framework within which policy makers can begin to address broader questions of optimal economic architectures.
The G20, a group of wealthy, industrialised nations, met for their fifth summit on 11–12 November 2010, in Seoul, Korea. On par with previous summits, the leaders’ primary focus was on economic and financial issues. While the leaders did not discuss health in a major way, it was specifically referenced in their final summit documents. Most notably, non-communicable diseases and the importance of health issues were highlighted in both the Seoul Development Consensus and the Multi-Year Action Plan for Shared Growth. The related issue of development was a prominent theme, culminating in the Seoul Development Consensus for Shared Growth. Other health-related issues, including climate change, food security, and poverty reduction, were also discussed. At the Seoul Summit, while still very limited, the G20 referenced health – directly and indirectly – more than it had at any previous meeting. According to this article, health is likely to continually increase in importance on the G20 agenda. If so, the G20 could have a major impact on global health.
The Indian Patent Office has rejected patent applications related to two AIDS medicines – lopinavir/ritonavir and atazanavir - on the basis that they did not merit patents under India’s patents law. The decisions mark a major victory for public health, and keep the door open for the production of more affordable generics for patients across the developing world. The patent for atazanavir bisulphate was rejected because it ‘lacked inventive ingenuity’ and the patent for lopinavir/ritonavir was rejected because it did not involve an ‘inventive step’. However the companies have filed other patent applications in relation to these two drugs which are still pending. These decisions show how India’s patent law, which prevents routine improvements from being patented, works in favour of public health by only granting patents for drugs that are truly innovative, according to Médecins Sans Frontières. The article highlights the need to safeguard India’s role as ‘pharmacy of the developing world.’ But as a part of ongoing free trade agreement negotiations, the European Union is pushing for India to accept ‘data exclusivity’ provisions that would effectively block the production of more affordable generics – even when a drug does not merit a patent under Indian law.
The implementation of intellectual property protection for pharmaceutical products in developing countries have led to concerns on access to medicine, and some countries, such as India, have tailored their legislation to limit the effect of intellectual property (IP) rights, in particular to prevent patents on incremental innovations. However, this strategy might not be yielding the desired effect, according to this study. The author examined all patent applications during the transition period allowed under the Agreement of Trade-related Aspects of IP Rights (TRIPS) before the implementation of the agreement in 2005. India is the main provider of generic medicines to developing countries, and production is legislatively supported by the prevention of patents on incremental innovations and the use of flexibilities to TRIPS rules. The laws on the book do not map neatly with laws in practice, the author found, as it appeared that, in complex cases, the Indian Patent Office lacked resources and expertise to determine whether or not a patent may be granted. He argues that the tailoring of Indian patent standards to limit patents on incremental innovations, which dominate drug patenting in the developed world, can be seen as an institutional innovation. However, in practice, resource constraints and other pressures may lead to institutional imitation, where the Indian Patent Office would simply copy developed-country practices and standards. The author predicts that the impact of TRIPS in India will be determined by the extent to which India sticks to, or departs from, international patentability standards.
International intellectual property (IP) rights are increasingly serving the needs of the global pharmaceutical industry, the authors of this article argue. IP constitutes the most substantial class of intangible assets. They are geographically mobile sources of vast corporate income that remain difficult to financially evaluate via arms length transfer pricing. This is especially true concerning transactions between subsidiaries of the same corporation. Intangible assets are often shifted to secrecy jurisdictions that specialise in IP holding companies that provide 100% tax exemption on royalty income as one of several tax holidays. The authors report that the Anti-Counterfeiting Trade Agreement (ACTA), drawn up by an ad-hoc group of high income countries and endorsed in March 2010, seeks to further lock down any loopholes on IP that may diminish the power of big pharmaceutical companies. Vessels passing through rich countries carrying generic goods for poor countries - irrespective of whether such goods are legal at source and destination jurisdictions - may be held up for seemingly as long as the intermediary nation deems fit.
The primary objective of patent rights is to foster innovation and economic growth, but the authors of this study conclude that there is little robust evidence that patents ‘work’ as intended. The authors found that stronger patent rights were related to greater patenting or research and development but could not find a direct link to economic growth. Instead, the role of stronger patent rights in generating growth and adding value at the industry level is relatively greater in richer countries, confirming that the impact of intellectual property (IP) rights may be only positive in richer countries and, conversely, negative or insignificant in poorer countries. The authors focused their research on the efficiency of patents at country and industry levels, noting that patent-intensive industries such as pharmaceuticals and chemicals respond more to patent rights and will require further research. They found that most of the existing patent-related literature contains the statistical problem of reverse causation, where the reasoning of stronger patent rights providing more research and development, innovation and economic growth can be challenged by the reverse reasoning of richer countries being more controlled by industries, such as the pharmaceutical industry, that lobby legislators to pass stronger patent laws ‘to make sure they get wealthier’.