Years after the agreement was reached at the World Trade Organization to allow poor countries to continue to import cheaper generic versions of patented medicines, it has failed to deliver.

Seven years after an agreement at the World Trade Organization (WTO) to allow developing countries to import inexpensive copies of costly patented medicines, the compromise has failed to deliver on its promise as a pharmaceutical lifeline for the global poor. Since the 2003 deal was reached, just a single shipment of anti-retroviral drugs (ARVs), the only effective treatment for HIV infection, has been delivered under its terms.

With upwards of 55 million people expected to need ARV therapy by the year 2030, health experts warn that global patent rules are contributing to a looming "time bomb” as current drugs lose their effectiveness and their newer, patented replacements are priced out of reach of all but the wealthy.

Unless the system is fixed, analysts caution, the flow of affordable life-saving generic medicines to the world’s poorest could slow to a trickle and millions of lives — most of them African — will be lost.

Higher costs on the horizon

"The reason nearly 3 million Africans are now on ARV therapy is that the drugs are available for as little as $80 per patient per year,” Emi Maclean, a treatment access officer for the non-governmental Médecins sans Frontières (MSF), said.

This compares with an annual cost of over $10,000 when the patented treatments were first developed. The price drop, she says, was caused by fierce competition from Indian generics manufacturers who were free to copy the drugs under Indian law.

But that is about to change. With Indian patent laws now compliant with the WTO’s strict patent rules, she notes, it will be much harder to produce cheap generic versions of newer, more effective ARVs that are already standard in Europe and North America.

Because of serious side effects with the drugs commonly used in Africa, Ms. Maclean argues that there is already an urgent need to switch to the newer formula. But that version is "two to three times more expensive.” More advanced ARV treatments can cost 27 times more.
Finding a fix

The 2003 agreement, reached after nearly two years of hard negotiations at the WTO, was designed to create a loophole in the international rules governing medicine patents.

These rules, known as Trade Related Aspects of Intellectual Property Rights, or TRIPS grant patent holders a 20-year monopoly on their creations.

But they allow governments to override those protections under some circumstances through the issuance of a "compulsory licence” to a local manufacturer to make copies of patented products for domestic use without the patent owner’s permission.

The 2003 WTO exemption allowed poor countries without local drug-manufacturing industries to import generic drugs made under compulsory licences in other countries provided a number of steps were followed.

These included advance notification by the importer of the type and quantity of drugs ordered, and changes in the shape, colour or packaging of the products to distinguish them from the originals.

Many non-governmental medical groups and anti-AIDS activists immediately criticized the agreement as unworkable.

They argued that the need for prior notification exposed the importing countries to political and economic pressure from donors, multinational drug companies and trading partners opposed to the use of compulsory licences.

The adoption of an order-by-order approach, MSF said in a 2006 analysis, prevented generics suppliers from achieving economies of scale through mass production.

The 2003 deal was "not an easy mechanism in the first place, but it is the mechanism we have,” observes Mr. Tenu Avafia, a UN specialist on intellectual property and AIDS

Canada tests TRIPS

For this reason advocates are following Canada’s efforts to make the TRIPS compromise effective. Canada was among only a handful of countries to amend its laws to allow local companies to export drugs under the accord. The legislation was passed in 2004 and became law the following year.

Canada is also the only country to actually ship an order of medicine under the agreement’s terms, an order of ARVs from the Canadian generics company Apotex to the Rwandan government.

But according to Mr. Richard Elliott, executive director of the non-governmental Canadian HIV/AIDS Legal Network, the process revealed flaws in Canada’s legislation.

"They started with an imperfect model at the WTO and made it less perfect. Canada can make its own legislation more workable.”

The requirement that companies have a firm order before seeking a compulsory licence was one problem, Mr. Elliott says. Provisions that require new licences for each order, he notes, "are user-unfriendly. This is not how governments buy drugs. Nor is it how the pharmaceutical industry operates.”

Dr. Bruce Clark, the vice president of Apotex, confirmed to Africa Renewal that his company had problems with the Canadian legislation.

The steps needed to produce drugs for export under the law, Dr. Clark said, "are simply too difficult and complicated. As it is currently written, we will not use it again.”

Legislation that Mr. Elliott and other advocates say would streamline the law has been introduced in parliament and could be debated later this year.

Russell Williams, president of Canada’s Research-Based Pharmaceutical Companies, an industry trade group, opposes the reform legislation.

He tells Africa Renewal that problems with Rwanda’s order were unrelated to either WTO or Canadian rules, although Apotex’s Dr. Clark disputes that claim. "The law has worked once so we know it can work again,” Williams said.

Much is at stake. With virtually all major drug-exporting countries now in compliance with TRIPS, the MSF’s Ms. Maclean observes, making the 2003 exemption viable could be a matter of life and death for millions.

"You really have a crisis in waiting — not just on HIV/AIDS, but for all the diseases whose medications are priced out of reach because of patent barriers.” 

United Nations Africa Renewal