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Cheap Drugs

Finally, the world has agreed that there are times when patents should be flouted.

Drugs: Far from reach

Disappointed by the rich world's intransigence at Cancun? Take heart. All's not lost. And yes, the rich world does care.

That may not be the appropriate word, but there is evidence that the rich world is not impervious to the reasoning advanced by those who stand in opposition to some of the world's well established business rules.

The defiance game was first started by the Indian drugmaker Cipla, which insisted on suppyling its generic HIV-fighting drugs --- among them stavudine (patent: Bristol Myers Squibb) and lamivudine (patent: GlaxoSmithKline) --- to South Africa and other funds-starved African countries at throwaway prices, in early 2001. Regular HIV treatment was selling at some $10,000 per year, but Cipla crashed the cost to $1 per day.

You heard that right: a dollar a day. The commonly taken poverty-line point.

The patent-owners were incensed by this flagrant violation of trade norms, and there ensued a war of words between Cipla and GlaxoSmithKline, in particular. The global pharma industry stood by and listened in to every detail, aware that this indeed was working its way towards a major global divide.

The generic versions of their arguments were as follows.

Cipla said that intellectual property ownership is all very good, but if it's a matter of life and death, and it has the wherewithal (the drugs' formula, in this case, and the ability to make them cheap) to save life, then that's the categorical imperative, patents be damned.

GlaxoSmithKline argued that do-gooding sentiment was a poor excuse for blatant piracy. Cipla's move, as it saw it, was an infringement of its rights as the holder of the drugs' formulae - intellectual property that cost it billions in R&D to develop. If drug firms have no protection from such theft, they will simply lose the incentive to invest in finding cures for the world's worst diseases - a disaster for global health, overall.

On August 30, 2003, as a prelude to the trade talks in Cancun, the WTO struck a 'balance', as the US Trade Representative described it, in Geneva. Under conditions of life-threatening emergency, patents can now be violated in indigent markets. But no leakage is to be allowed. The super-cheap drugs must necessarily reach only the intended beneficiary - and must not find their way to rich markets where the pricing must conform with patent-honouring market rules.

A long sigh of relief, then, from Indian pharma companies. The WTO agreement has not just widened the scope of their market operations (although in a restricted way), it has handed them a moral victory.

The business benefit may not be very evident at the moment (there's not much money to be made in such rescue missions). But going by global brand salience, Cipla, in particular, has good reason to be proud of itself. Drawing mass attention to mass-forgotten problems has a logic of its own. In India, Cipla's TV campaign for asthma awareness reaches out to numbers far greater than those afflicted... but ask asthmatics, and they'll tell you what a difference it has made (inhalers are finally entering office first-aid kits). The HIV fracas, with all the international coverage it received, has also served a purpose. It's a strategy that ought to pay off, eventually.

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