Merrill Matthews, Ph.D.
2007-05-22 07:00:00.0
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WASHINGTON -

Accusing Western drug companies of putting profits before human needs, Thailand’s military-appointed government has issued “compulsory licenses” on several patented pharmaceuticals in recent months. Most notably, Thai leaders revoked the patents of Kaletra and Efavirenz, two powerful HIV/AIDS treatments.

Amazingly, even some members of Congress support Thailand’s efforts. Unfortunately, these supporters are failing to ask a critical question: If patents cannot be protected, why would any brand-name pharmaceutical manufacturer continue to pour millions of dollars into AIDS research?

Pharmaceutical companies invest billions of dollars into research and development for AIDS treatments. But today, leftists and activists are demanding that these companies virtually give away their drugs, especially to low-income and developing countries.

Meanwhile, if the innovator company refuses, developing countries like Thailand claim they have grounds to ignore — steal, really — the company’s patent (i.e., compulsory license) and make their own generic version of the drug.

But that’s not all. The country stealing the patent may assign its own generic manufacturer to make it. In many cases, the generic producer is a company that’s partially or wholly owned by the government.

Incidentally, that’s exactly what’s happening in Thailand. And those generic companies are often big financial contributors to the same foreign politicians claiming they need to steal the patent in the first place. It’s an outrageous conflict of interest — one that has at least as much to do with enriching politicians than helping victims of AIDS.

Those who support compulsory licensing also ignore the fact that a good portion of those generic drugs will find their way to high-income countries.

In other words, Thailand isn’t simply ripping off the drugs to address a public health concern. Once Thailand’s generic manufacturer starts stamping out the product, it’s almost assured the drugs will compete against the brand-name manufacturers in developed countries.

That creates an even bigger problem. Pretty soon, other more developed countries (e.g., Brazil, with the 10th largest economy in the world) will decide they should get the same deal. Actually, Brazil has already made that announcement.

But if the brand-name manufacturer tries to point all of this out and protect its intellectual property, it is accused of profiteering from the poor, of being heartless, of putting profits before human needs.

Alas, no good drug goes unpunished.

Making matters worse, brand name companies get whipsawed in the court of public opinion.

When they develop cures for pandemics like AIDS and try to recover some of their R&D costs, they are denounced. But if they try to cross-subsidize their work on these less-profitable cures by selling high-volume drugs for cholesterol or erectile dysfunction, they are accused of ignoring real diseases like AIDS.

Compulsory-license supporters claim they are taking the moral high ground; they are doing the right thing because they are helping the poor. But that’s nonsense. There is nothing ethical about confiscating the property of a company that spends time and money developing cures for deadly diseases.

The “compassionate” argument becomes even flimsier in light of the fact that Thailand is now claiming the right to compulsory license several other non-AIDS drugs.

The reality is that Thailand provides none of the millions of dollars or thousands of man-hours needed to create new AIDS drugs. Yet the country claims a right to the final product at little or no cost.

Such actions — replicated in other countries — will eventually put pharmaceutical manufacturers like Abbott out of business. Or it will drive them into other areas of drug research. Once that happens, who will then develop our cutting-edge cures for AIDS, or other diseases?

Certainly not Thailand.

Merrill Matthews is a resident scholar with the Institute for Policy Innovation and director of the Council for Affordable Health Insurance.