Candace Williams

Brazil and Thailand’s Response to TRIPS and TRIPS-Plus: How can the international
community balance needs of access and innovation?

What is TRIPS?

Born with the World Trade Organization (WTO) in 1994, the Agreement on Trade-related
Aspects of Intellectual Property Rights (TRIPS) lays down universal minimum standards for
protection of copyrights, trademarks, patents, geographical indications, unfair competition, trade
secrets, and other aspects of intellectual property. The agreement is enforced by the WTO, which
has the right to levy economic sanctions. All nations who want to become members of the WTO
must agree to the package. The WTO and other proponents of the agreement hailed it as the
“greatest trade agreement in history” because of its sweeping reform of intellectual property
rights (IPRs). The United States, Japan, and the European Union take TRIPS a step further in
their bilateral trade agreements by attaching “TRIPS-Plus” or “US-Plus” IPRs to trade
agreements. These agreements extend the provisions beyond the original WTO TRIPS
agreement.

What standards does TRIPS place on pharmaceutical drugs?

There are three main standards that TRIPS places on pharmaceutical drugs. First, pharmaceutical
products and micro-organisms are patentable for 20 years after the inventor files a patent
application. Second, imported patent rights must be upheld and cannot be discriminated against
in national IPR policies. Third, patent holders are granted exclusive marketing rights. Although
there seems to be a lot of flexibility for nations to tailor intellectual property laws to fit their
development goals, the asymmetrical power relationships between developed countries,
developing countries, producers, and consumers, has a large impact on the ability of states to use
this freedom to their advantage.

Multilateral and bilateral TRIPS-Plus agreements increase the number of restrictions on generic
drugs, compulsory licenses, parallel importation and other means of opening drug access. For
example, NAFTA and CAFTA are seen as have provisions that prevent the marketing of off-
patent drugs.

What’s the big deal?

Access to pharmaceutical products is a major development issue. For example, out of the 42
million people infected with HIV and the 6 million with full-blown AIDS in the developing
world, only 300,000 are receiving anti-retroviral treatments (and 100,000 of these reside in
Brazil).
Proponents of TRIPS-style laws say that public goods would be underprovided without such
agreements because innovators need incentives to develop and market their discoveries. They
cite a controversial 2001 study by Attaran and Lee that found that patents do not restrict access to
anti-retroviral medicines in Africa. Pharmaceutical companies say that poverty and other
structural issues are the main reason why impoverished people lack access to drugs and promote
international aid and humanitarian work as an alternative to changing intellectual property laws.
Many American pharmaceutical think-tanks argue that it is unethical to have an international
market where Americans pay higher prices for drugs developed on their shores while people in
other nations get cheaper drugs.

Opponents argue that these agreements further restrict the poor’s access to drugs because it
increases the market power of companies that many say are already oligarchies. Pfizer is the
largest world company with $53 billion in revenues in 2004. Together, the five largest non-
generic pharmaceutical companies hold 33% of the global market share. These companies can
charge higher prices because they face no competition from generic or competing drug brands.
Although they are made illegal by TRIPS, generic drug brands can be between 30 to 80%
cheaper than patented drugs, the ability to offer generic drugs may be the only way that
impoverished nations can satisfy the large demand for expensive drugs.

Thailand and Brazil: Resisting TRIPS and TRIPS-Plus

Activists in Thailand have challenged drug-makers over pricing policies that restrict access. For
example, in 2002 activists argued that the US National Institutes of Health developed the drug
and that it was wrong for a private company to try to profit from incentives that are meant for the
innovators. The US threatened to impose trade sanctions if it pursued a compulsory license to
produce DDI. A Thai court cited international statutes and ruled that Thai HIV/AIDS patients
could be injured by patents and sue drug-makers that restrict the availability of drugs through
pricing policies. In 2004 Bristol-Myers-Squibb surrendered its anti-retroviral drug didanoisine
(DDI) after the verdict was upheld. Right now Thailand is renegotiating bilateral Free Trade
Agreements (FTAs) with the United States. In 2006 the Chief American WHO represented to
Thailand, Dr. William Aldis, said that AIDS deaths in Thailand have fallen by over 79% as a
result of delivery of cheap locally produced drugs to 80,000 Thais living with HIV/AIDS.

Since 1996, the Brazilian government has offered free anti-retroviral therapies to HIV/AIDS
patients. The cost of the program is high, so the government authorizes many companies to
import or produce generic drugs. The Brazilian Ministry of Health estimates a cost savings of
$1.1 billion. This program has cut AIDS death rates by over 50%. In 2001, the US filed a
complaint with the WTO because of Brazil’s violation of TRIPS. Later that year, all members of
the UN Human Rights Commission (except the US) supported the Brazilian resolution that asks
nations not to “deny or limit equal access for all persons to preventative, curative, or palliative
pharmaceutical or medical technologies used to treat pandemics such as HIV/AIDS”. The US
withdrew the WTO complaint and says that it will pursue bilateral FTAs with Brazil.
Conclusion

It is clear that some IPRs are necessary for a robust world economy that encourages innovation,
but there comes a time when patent laws put too many restrictions on the international flow of
ideas and products.