14th March 2007

THAI GOVERNMENT EXPLAINS COMPULSORY LICENCE POLICY ON PATENTED DRUGS

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Thailand’s government on 8 March released a report elucidating why it recently decided to suspend patent protections on three drugs by issuing compulsory licences for the production and import of generic versions of them.

The explanation follows much debate about the process by which Bangkok granted the licences (see BRIDGES Weekly, 31 January 2007). The pharmaceutical industry argues that the government went too far by suspending patents without adequate prior negotiations with the patent holders.

According to the WTO TRIPS Agreement, governments do not need to negotiate with patent holders prior to issuing a compulsory licence for national emergencies or public non-commercial use (though they must provide them with a royalty fee as compensation).

The Thai document emphasises that the principal rationale behind the compulsory licenses was to achieve universal access to essential medicines through the government’s non-commercial public healthcare programmes. Pointing to rapidly rising drug costs, it said that this policy demonstrated the Thai “government’s commitment to put the right to life above the trade interest.” The report stressed that the licences had been issued in full compliance with national and international laws, noting that US Trade Representative Susan Schwab did not dispute this. It also claimed that the licences would not affect the country’s very small market for patented drugs.

Addressing the demands for prior negotiation with the patent holders, the report argues that not only were such consultations legally unnecessary, the government’s attempts to work with companies between 2004 and 2006 yielded little in the way of lower prices. “It is only after the threat or the decision to use and implement compulsory licensing or government use of patent that the negotiation will be more successful and effective,” it said. The paper pointed to praise for the government’s decision from public health groups. It also described how the quality of generic versions of the drugs would be ensured. Notably, it did not rule out the possibility of further compulsory licences.

The report also pointed out that developed countries have made extensive use of compulsory licences (or the threat thereof) on public health and anti-competition grounds.

Meanwhile, drugmaker Abbott Laboratories — whose HIV/AIDS medicine was one of the three issued compulsory licenses by the government - has decided against launching new drugs in Thailand.

The report is available online at http://www.moph.go.th/hot/White%20Paper%20CL-EN.pdf.

“Abbott Won’t Launch New Drugs In Thailand After Patent Revocation,” WALL STREET JOURNAL, March 13, 2007; “Thailand Presents Report On Compulsory Licensing Experience,” INTELLECTUAL PROPERTY WATCH, 12 March 2007.