Ethics Case Studies » Thailand’s Compulsory Licenses for HIV Anti-Retrovirals

Thailand’s Compulsory Licenses for HIV Anti-Retrovirals

Gordon Hull / Philosophy and Religious Studies / Iowa State Univ.

I. Introduction and Concepts

MoleculeTo understand the issues here, you need to develop a basic grasp of a few concepts and terms that may not be familiar:

  • The World Trade Organization (WTO) is an umbrella organization that helps countries manage their trade relations and serves as a forum for negotiating agreements on more specific trade issues.  Most nations are members.
  • Among the agreements the WTO manages is TRIPS (Agreement on Trade Related Aspects of Intellectual Property Rights).  TRIPS establishes international agreement on minimal standards for intellectual property protection, and agreement to TRIPS is compulsory for WTO membership.  Signatory countries agree, among other things, to bring their domestic intellectual property protection in line with TRIPS minimums.  The U.S. has been aggressively pursuing bilateral free trade agreements (FTA’s) with several countries (including Thailand) which would substantially ratchet up intellectual property protection over the baseline established by TRIPS.
  • Intellectual Property (IP) refers to property rights granted over information commodities.  There are three main categories of IP: Copyright, patent, and trademark.
  • Patent rights are designed to encourage the development of useful inventions.  Thus, to receive patent protection in the U.S., a product must be useful, non-obvious, and new.  Patent protection then grants the inventor (or owner of the patent rights) exclusive rights to market the invention and to stop others from doing so.  After a period of time, the patent rights expire; this period of time is relatively short for pharmaceutical products (you’ll notice the expiry of a patent when cheap, generic versions of a product appear).
  • Patent rights have a straightforward utilitarian justification, which can be set out in a series of propositions.  A sample argument might go something like this:
  1. Many inventions have high social utility
  2. Many inventions are commercially viable – people will buy them
  3. It is expensive to develop such inventions
  4. It is very cheap to copy and sell the inventions of others
  5. Without a law to the contrary, people will copy inventions and sell them cheaply
  6. Therefore, without a law, inventors will be unable to recoup their development costs.
  7. If inventors cannot recoup their development costs, they won’t be able to invent things.
  8. Therefore we need a law to stop people from copying inventions.

Patent law thus has to try to balance two things:

  • The need for inventors to have financial incentives to pursue their inventions
  • The social good obtainable by the inventions being widely available

II. Thailand’s Compulsory Licenses

TRIPS has a clause, reaffirmed in the Doha Declaration of 2001, that allows countries facing a public health emergency to grant compulsory licenses for patented pharmaceutical products.  These compulsory licenses allow the country to either manufacture and distribute the product itself, or to import it from a country that does, thus overriding patent rights on the product.

Widespread distribution of anti-retrovirals coincided with a sharp decline in the number of officially reported AIDS deaths in Thailand – from 5,020 in 2004 to 1,640 in 2005 (see “HIV & AIDS in Thailand, n35 and accompanying text).  Starting in Dec. 2006, Thailand has issued compulsory licenses for a number of HIV/AIDS retroviral drugs and a heart medication, citing the need to keep costs down while maintaining public health policy.  Pharmaceutical companies are not happy about this.

Partly in response to pressure from the pharmaceutical industry, the U.S. government has been lobbying Thailand for some time to sign a bilateral (i.e., just between the U.S. and Thailand) free trade agreement (FTA) that would restrict the ability of the Thai government to issue compulsory licenses.  The TRIPS agreement and the proposed FTA thus offer different frameworks and options for thinking about balancing public health and IP.

III. Reading:

Optional/other sources.  These might help or be of interest:

  • “Safe at any Cost?” Asian Sentinel (Jan. 24, 2007), analyzing Thai domestic production capabilities.
  •  “HIV & AIDS in Thailand,” information about Thailand’s long term struggle with HIV/AIDS from avert.org.
  • Bristol-Meyers-Squibb’s page on Sustiva, the brand-name version of efavirenz
  • “Public Health at Risk,” An Oxfam policy paper arguing against the bilateral agreement proposed by the U.S.
  • Peter K. Yu, “TRIPS and Its Discontents,” Marquette Intellectual Property Law Review 10 (2005), a legal analysis giving several narratives of how TRIPS came about, and suggesting ways that developing countries might protect their interests within the framework of the treaty.

IV. Discussion

  1. Identify the relevant stakeholders for Merck.  What are the specific interests and values of each, and what policy would best advance those interests in each case?
  2. Construct a utilitarian argument against the Thai policy.
  3. Construct a utilitarian argument in favor of the Thai policy.
  4. Merck proposed selling efavirenz to Thailand at a reduced price.  Friedman says that it is wrong for corporations to act on social responsibilities if that reduces their profits.  Would Friedman condemn the Merck proposal?  What factors are at play here?  To what extent is Friedman’s analysis applicable in an international setting?
  5. The U.S. is pressuring Thailand to enter into a bilateral trade agreement that would expand the scope of patent protection beyond TRIPS and reduce the ability of the Thai government to circumvent patent protections.  Construct an argument, on utilitarian grounds, both for and against this U.S. policy.
  6. Are there non-utilitarian values at play here?  If so, what are they, and how should one try to protect them in a policy framework?
  7. To what extent can “public health” be secured through property rights?