Let me paint an ugly picture for you. If someone were to tell you that a group of 12 men (with no governmental affiliation) would be able to change the laws and policies of (at least) 153 countries as well as the health and lives of over 90% of the world’s population, how would you react? Let me also throw in the fact that these 12 men were also in a position to directly profit from certain changes they were making. Shocking?
This ugly picture unfortunately, is not a hypothetical one. The World Trade Organization’s Trade Related Aspects of Intellectual Property Rights (WTO TRIPS) Agreement is the outcome of precisely such a process. Why does this matter? The TRIPS Agreement, in the health context, determines whether or not patients are able to get access to the medicines they need and what barriers, if any, ought to be in the way of that access. This happens because the patent, which is a right to exclude other people from making, using or selling the patented product, essentially allows the patent owner to continue monopolistic behaviour and set prices as they wish. The stronger the IP, the more money the IP holder can make. This is supposed to serve as an incentive to draw in more people to innovate.
12 CEOs of MNCs representing the pharmaceutical, entertainment and software industries convened in a backroom in the early 90s, to form the spearheading body which eventually laid down the backbone of the TRIPS Agreement. This was then thrown in with the other WTO Agreements (GATT, GATS and TRIMS) that were served as a take-it-all or leave-it-all package to any state wanting to become a WTO member. With international trade being a common desirable world over, there wasn’t much of a choice really, especially for developing countries newly opening up their markets. Today it’s precisely these 3 sectors (pharma, entertainment and software) which are raising the most amounts of controversy with regards to the alleged benefits of stronger and stronger IP rights.
Aside from this political check-mate, there was also a bias in negotiating powers (while forming the Agreements) due to a certain knowledge asymmetry that was present. The non-developed countries had much newer intellectual property systems which were still going through the copy-and-grow phase that the developed countries’ IP systems had already gone through. The developed countries, due to their domestic corporate lobbying, wanted to make much stronger IP rights prevalent all over the world. Stronger IP rights would give these corporates longer periods of exclusion rights over goods. This would mean that it would be much harder to move the currently established industry leaders from their positions, preventing or retarding progress of their competition, and thus retarding overall growth as well.
While it is of course necessary to incentivise innovation, it must be kept in mind, that it is the corporate lobbyists who are determining how much of a patent period is ‘enough’ for them. Equally as important, the TRIPS Agreement also determines the innovation policy for medicines for all its signatory countries, i.e., how to go about improving existing drugs or coming up with drugs to address diseases with no currently existing treatments. Once again, it is the corporate lobbyists who are setting the policies for consumer welfare, for which, they arguably are hardly the best representatives.
This is having devastating results in today’s world. Setting higher prices is equating to focusing their products only on rich patients, and this in turn is translating to ignoring most of the developing world as a market at all. An insider from a major pharma company has even admitted to referring to anything coming from a developing countries market as a ‘bonus’. Admittedly, now, (possibly due to more informed shareholders?) some major pharma companies are being more philanthropic towards poorer markets. But philanthropy is hardly a reliable business model, especially for a crucial sector such as pharmaceuticals. Aside from this, there is also the fact that many tropical diseases, which do not affect the developed world but are a big cause of concern in developing countries, are not addressed at all, because there is not a financially big enough (but certainly populated enough) market for it.
Some may argue, that there is no other choice in today’s world. Capitalistic society works on the basis of the trickle down effect, and that this means eventually the poorer countries too will benefit from this system. This too however, is false. This system is not only bad for developing countries, but also for the developed. It’s simply that the developed have a bigger buffer, and it’s in fact the harms which are slowly trickling down to them too. Big Pharma today, has been resting on its laurels with older blockbuster drugs, many of which are set to go out of patent period in the next few years. Worringly, major breakthroughs in drug innovation seem to be hard to come by now. Simply put, how many AIDS/TB/Malaria breakthroughs have you heard of – versus – how many different types of fairness creams and other over the counter lifestyle products do you see advertised around you nowadays? Why waste money on risky (useful) products when you can make easy money off simple products – seems to be the working motto.
Unsatisfied with this, or possibly worried about their future due to the slowdown of innovation, there is now a lot of pressure to push for even stronger IP rights, but this time through various Free Trade Agreements. A prime example is the EU-India FTA, where apparently the PM’s office has been lobbied directly in order for the required strong IP provisions to be pushed through, despite the cabinet ministry wanting otherwise. Unfortunately it appears that our government is going to destroy our ugly picture a little more and sign away our health, so that someone’s pockets may be filled a little more.
Swaraj Paul Barooah
Swaraj Paul Barooah is currently a doctoral student at UC Berkeley, School of law. Having decided early in life that the working life (office/files/etc) were not for him, he tried going professional with several sports (football, tennis, table-tennis, poker). After failing miserably, he buried himself in Calvin & Hobbes before returning to academics and decided that maybe it was still possible to reconcile his non-working beliefs with academics. He also decided that the world needs saving (from similar power hungry minds) and has since been working towards justice, equity and good conscience-y things.
Image Source: [http://www.flickr.com/photos/mabi/131420563/]