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March 11, 2008


What is bully Uncle Sam complaining about???

If you can have compulsive licensing to line billionare Meg Whitman's pockets in the United States, you can CERTAINLY have compulsive licensing for life-saving drugs for poor Thais.

The Thais were just following a "balanced" policy of patent "fairness."

Anyhow, the patents were probably obvious anyhow - the molecules were probably a combination of Carbons, Nitrogens, Oxygens, Hydrogens - any mathematician will DEFINITELY tell you that you can only combine these elements in a "finite" number of combinations (both formulae and structure) - seems obvious to me (I'm not a chemist but I took some chem courses in college so it seems obvious to me).

What's good for the goose is good for the sauce !!!!

We should all applaude Thailand's anti-troll policy.

Dear Anon:

We agree with you that it is politically (and perhaps morally) untenable for large Western pharma companies to expect that poor countries like Thailand will (or should) pay the same prices for lifesaving drugs as wealthy Americans. And you are probably correct that there is enough fat in corporate America that the "losses" suffered by Thailand's actions will not drive any of them out of business any time soon.

But it seems logical that, having spent all the time and effort to produce a global IP regime (under GATT/TRIPS/WTO), Western governments should encourage their innovator drug companies to proactively address the pricing issue, rather than letting the whole global drug pricing structure devolve into chaos.

And as much as I admire your spunk in thinking some college chemistry courses make you qualified to decide what's "obvious," the facts are that it takes hundreds of millions of dollars to develop a new drug, and without some return on investment people will put their money in the mortgage market or iPods. Try using that next time you get sick.

Thanks for the comment.


Article 31 of TRIPS provides an appropriate fair and balanced approach for Thailand to follow in declaring compulsory licenses. Under the TRIPS scheme, Thailand would pay a royalty rate that would be calculated based on internal market-driven factors, which are calculable using the Georgia Pacific factors as a guide. If the drugs are primarily going to the poor (e.g., retrovirals), then the royalty rate would be low. If, on the other hand, the drugs are going to Thailand's sizeable middle class and upper class, then the royalty rate would be higher.

Under TRIPS, Thailand has agreed to pay a fair royalty rate that is measured by objective economic factors and not by political fiat. Thus far, the royalty rates suggested by the Thai government are far below what TRIPS would provide.

Besides, most of these drugs (except for retrovirals) are probably going to middle-class and upper-class consumers in Thailand, whose ability to pay is no less than that of similarly situated consumers in other countries.

Further, your comments about "Uncle Sam" are overly broad. These confiscatory practices also affect innovator companies based outside of the US (e.g., Aventis, Roche, Novartis, GSK, Takeda, Bayer, etc.)

And in the background stands a Thai government that was installed by military force that desperately needs to buy off the loyalties of wealthier Thais.

I think you missed my sarcasm - I was NOT defending the Thai gov't.

I was noting that it is hypocritical of the United States to simultaneously:
a) weaken its OWN patent system; and
b) demand that trading partners (i.e. with a lower standard of living and an economic incentive to employ a "copy" business model rather than an "innovate" business model)enforce a strong patent system.

As for (a) - it is well known that the US patent system has been weakened over the past few years, and that there is a trend towards further weakening - i.e. the Ebay case which overturned 80 years of precedent and introduced Compulsory Licensing into the US, proposed patent 'reform' legislation which probably enjoys a majority in the Senate (though less than 60), the constant drumbeat we hear from the business press and American academia about how patents are 'out of control.' This all of course filters down to the 'reject reject reject' approach of the current USPTO administration. This also seems to filter down to many court decisions (alas, I'm just a humble US agent living overseas, but I think this is safe to say). This attitude also shows up in amicus briefs from non-scientist law professors.

The US cannot expect anyone else to be 'more catholic than the pope.'

The US cannot expect to weaken its own patent system without international reprecussions.

SORRY ABOUT THE LONG POST ! (which is not spelled-checked)

PS You have a GREAT blog - keep up the good work. My practice is mostly in EE/Computer Science (with some medical devices), and I enjoy your blog both as a general patent blog, and as a 'window' into the Bio/Pharm perspective of things.

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