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June 25, 2009


1. Thailand and Brazil followed both domestic and international law. We don't really know what Venezuela is up to, but to compare Venezuela with Thailand at this point is not fair.

2. Almost no informed observer would say that the Doha Declaration has provoked a world wide crisis of too few drug patents and too much access to generic medicine in low- and medium-income countries. Most view Doha as either a success with modest problems or not aggressive enough in support of access. For examples of recent debate, see the symposium issue 37(2) J. Law, Medicine & Ethics (2009), including the reviews by Reichman (Duke), Kapczynski (Berkeley), and several others.

3. Your comment about Thailand violating TRIPS by "imposing compulsory licenses for drugs such as Plavix® that do not readily fall within the definition of drugs for treating a public health crisis or national emergency" misunderstands the text of article 31, which does not impose this requirement in the way you imply.

Dear Kevin,

Nice observations. I am much in agreement with you in that Western patent holders would benefit by partnering with local industries. In fact, GSK's CEO back in February 13, 2009 gave a speech to Harvard Medical School about changing the way phamaceutical companies do business in least developed countries. One suggestion was partnering with local entities to be more closely linked to the local industry.

Hi Kevin,

This is a very nice Report about a topic that is extremely complex due to the many subtopics involved (international patent law, international trade, geopolitics, trends in the pharmaceutical industry, etc).

Just some point of interest:

1) Venezuela has not granted a patent since many years ago so there may not be a right to enforce (or to license in a compulsory way) in the first place.
Most big pharma companies keep filing patent applications in the country because they are focusing long term (15 years or longer) and the political reality may likely change in Venezuela (like in any other place these days).

2) Venezuela has already withdraw from the Andean Community and it has declared that Decision 486 (the regional norm regulating IP) is no longer in force. Instead, the local PO has informed that the IP Law dated from 1955 is in force. Local practitioners are litigating these facts and there are no clear final results yet.

Dear Kevin:

I think you missed the point a little. Let me be clear - I think that what many developing countries have done is perfectly legal, and did not state or imply otherwise. In fact, the great irony is that the Western nations that promoted TRIPS as a way to improve patent protection in such countries have found the opposite to be true, due to provisions of both TRIPS and Doha.

I also think that this is not only understandable but to be expected.

While the symposium results are a nice synopsis of where academics think we are today, I'm not so sure I would be complacent about the health of the pharma industry. The fact that there may not have yet arisen the repercussions that could come from a general disregard for patent rights doesn't mean they will not arise if the trend continues. Which is why I suggest that a developed world/developing world dichotomy doesn't work - partnering with local industry, which benefits both parties, is a better choice (and one that Roche and GSK are pursuing).

And if I am misinformed about the Thailand situation, then I have company (including, as I recall, the EU trade commissioner).

Thanks for the comment.

Kevin O.,

You are right that Article 31 permits a state to grant compulsory licenses in certain instances. But Article 31 also requires the payment of reasonable royalties to the patent holder. The WTO has generally adopted the Georgia-Pacific factors for calculating such royalties.

The royalty rate initially proposed by the Thai government in 2007 was less than 1% - a rate which is so low that a compulsory license becomes confiscatory.

Furthermore, I do not believe that any WTO panel has yet adopted the interpretation of Article 31 espoused by Jerry Reichman. While I agree that Reichman is largely correct, it is still unclear whether Article 31 and Doha permit the declaration of compulsory licenses on lifestyle drugs, such as Plavix.

Dear Bob:

Has the WTO taken up Thailand's "confiscatory" actions on Plavix? Do you think Sr. Chavez intends to respect any WTO decision contrary to his stated goals? (This is particularly a problem with Venezuela - what leverage does the WTO have against an oil-exporting nation?)

And isn't the term "reasonable royalty" a relative one - is the reasonableness of the royalty a pharma company gets in the U.S. the same as what it gets in Venezuela? What if Venezuela sells a drug for 20 cents a pill that sells for $5 a pill in the US - then a 5% royalty would be 1 cent in Venezuela and $1 in the US - reasonable?

Thanks for the comment.

Venezuela = Patent Fairness

Kevin, please post my comments from last week.

Dear Kevin:

Be happy to, once we receive them. E-mail them to me off-line and I'll put them up.

Don't know why you are having trouble getting through, but we will check with the webmaster.

The comments to this entry are closed.

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