ARTICLES
Patents Against People
How Drug Companies Price Patients out of Survival
MICHELLE CHEN
As our television screens toggle between
pundits squabbling over Obamacares
insurance rules and ads for erectile
dysfunction remedies, another health care
battle rages in village clinics and corporate
boardrooms. Behind the seductive commer-
cials for breakthrough treatments, multina-
tional brands and technocrats are concocting
supranational policies to hold poor patients
hostage to pharmaceutical markets across the
Global South through elaborate intellectual
property schemes in international trade.
And while the industry sutures the future
of medicine to the business of exploiting
disease, poor countries serve as an incubator
for neoliberal policies that boost the industrys
power in Washington, capitalizing on regional
inequality to degrade public health on a
global scale.
The struggle for access to medicine presents
a legal and ethical minefield for rich and poor
countries alikeone that is being fought out
as humanitarians challenge corporations over
intellectual property rights. A recent landmark
decision by the Indian Supreme Court
thrust that conflict into popular awareness.
The ruling blocked a request by the global
pharmaceutical giant Novartis for a patent
on a Leukemia drug, Gleevec. The company
claimed to be introducing a new formulation
of the drug that warranted a fresh patent. But
the court determined that the new Gleevec
was virtually identical to the old one. This
cleared the way for mass production of a
much cheaper generic version. While a cancer
patient in the United States might spend
around $70,000 for Gleevec, Indias version
could cost as little as $2,500.
The defeat of Novartis sent shockwaves
across the drug industry. Companies have
long structured their profit systems around an
obscure set of intellectual property controls,
and the ruling represented a growing
global pushback against their political and
commercial hegemony. The case raised a
preeminent question in the struggle for global
health equity: when the laws of commerce
override the human right to medicine, can
society protect public health from unbridled
private markets?
In the United States and other rich industri-
alized nations, big pharma is already the
gatekeeper for life-saving medicines. The
Global South is the next frontier in the patent
war, where public health advocates form
the front line against an industry seeking to
colonize nascent health care markets. The
Novartis ruling is just one of many legal
showdowns that have embroiled the drug
industry in recent years. Meanwhile, corpora-
tions are pushing back through trade deals
and other intellectual property reforms. The
outcome could be devastatingstripping
government and citizens of authority over
health care costs and lavishing more market
power on top drug manufacturers. The mecha-
nisms by which the drug companies pursue
this power, however, are off the public radar,
designed by international bodies determined
to evade democratic control.
Though the Novartis case jarred drug
makers, their lobbyists have been working
for years to secure their global market share
with regional and bilateral free trade agree-
ments aimed at erecting draconian transna-
tional intellectual property regimes. Just as
the ink was drying on the Novartis decision,
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PAT E N T S AG A I N S T T H E P E O P L E

the European Union was hammering out a (Australia, Brunei, Canada, Chile, Japan,
pending free trade deal with India that would Malaysia, Mexico, New Zealand, Peru,
harden intellectual property protections. Singapore, Vietnam, and the United States),
Commercial rules etched into the deal would the TPP has triggered worldwide opposition,
encourage the evergreening of medicine with many anti-globalization groups warning
patents, where companies can repeatedly that it would entail an array of neoliberal
extend patents (often by inserting, for policies aimed at undermining the autonomy
instance, a new inert ingredient) and thereby of national governments, eviscerating protec-
undermine efforts to sell the same drugs at tions for local industries, and attacking health
cheaper pricesprecisely the kind of corporate and environmental regulations.
practice that the Indian court rebuffed. Negotiators are now weighing numerous
Indias patent landscape is pivotal because provisions that could dramatically impact
it is one of the worlds largest generic drug future access to affordable drugs. According
producers, supplying much of the Global to an analysis by public health advocates
Souths medicine markets with cheaper with Mdecins Sans Frontires, the proposed
analogs of their exorbitantly priced Western policies would make it extremely difficult
counterparts. The Indian generics industry is for generic competitors to enter the market,
on track to grow from about $11 to $74 billion keeping prices unaffordably high, with devas-
by 2020, according to industry financial esti- tating public health consequences.
mates, making up for low prices with sheer The pharmaceutical industrys chief aim,
volume. And since Indias patent law structure activists fear, is to establish a new global
is still developing, many Western brand-name
drugs like Gleevec were first marketed there
without a patent and are finding local health
authorities resistant to those drugs conversion
into pricey, brand-name equivalents.
In April Cambodian activists issued a
statement in opposition to the EU trade deal
with India, warning that the price of medicine
would skyrocket and cost lives. The coalition
of self-described representatives of garment
workers, sex workers, entertainment workers,
people living with HIV, LGBTs, university
students, feminists and human rights activists
from different networks and organisations
told the European negotiators of the impor-
tance of made-in-India drugs for millions of
people. The trade deal, they argued, must
stop right now. It is a true example of putting
profits before peoples lives and [taking]
advantage of peoples illness for corporate
profits. Our lives should not be regarded as a
business opportunity.
Their protest comes in the face of an even
larger pending agreement: the Trans-Pacific
Partnership Agreement (TTP), a free trade
scheme central to the Obama administrations
pivot to Asia. Intellectual property provi-
sions in the leaked draft of the agreement
seem designed precisely to preempt trade Action organized by Oxfam International and Doctors
barriers that protect access to medicines. Without Borders protesting the unaffordability of Novartis
Covering twelve countries in the Pacific Rim drugs (Carlos Capote, 2007, Flickr creative commons)

7 2 D ISSE N T F A L L 2 0 1 3

standard for governing the control of patents,
empowering companies to control medicine
markets more expansively and for longer
periods of time.
The TPP would set a broad standard patent
term of twenty years, with opportunities for
extensions. Moreover, at the behest of U.S.
negotiators, it could tighten the exemptions
allowed under the Trade-Related Aspects
of Intellectual Property Rights (TRIPS)
agreement, a set of rules governing patents,
intellectual property, and copyright set by the
World Trade Organization (WTO). Expanding
TRIPS is a key plank in Washingtons market-
liberalization agenda to dismantle trade
barriers and encourage corporate consoli-
dation in emerging markets in technology
and medicineironically, under the banner of
making trade more free.
The U.S. proposal for the TPP would make
it more difficult to reject evergreening patents
such as the one involved in the Novartis case,
says Krista Cox, a staff attorney with the intel-
lectual property policy think tank Knowledge
Ecology International. That would pave the
way for drug industry giants to avoid the kind
of public interest challenges at issue in the
Indian court, thus easing market expansion
throughout the Pacific Rim.
One especially harsh proposal raised in
the ongoing trade talks would bar a legal
mechanism known as pre-grant opposition,
which currently enables civil society groups to
oppose pending patent applications by chal-
lenging the validity of the proposal. Without
pre-grant opposition, a patent would typically
have to be challenged via the courts, which
could stymie generic competition for years as
the litigation is pending, even if the patent is
ultimately found to be invalid.
Though the TPP has not been finalized,
U.S. and EU negotiators are working to shape
a framework that would affix in international
law the structural asymmetries in health
care access between rich and poor nations.
Activists say these deals aim not only to
penetrate emerging pharmaceuticals markets
in participating countries, but to spread
neoliberal policies around the world that
would bolster corporate power.
Were concerned that the TPP is, in part, a
closed-door hemispheric rule-making against
PATENTS AGAINST THE PEOPLE
public health, says Peter Maybarduk, director
of Public Citizens Global Access to Medicine
program. The Obama administrations free
trade agenda, he adds, actually threatens to
unravel some of the hard-fought gains in
access to medical treatment that were initiated
under the Bush administrations international
HIV/AIDS initiatives.
From an economic development
perspective, middle-income countries that
produce generics, like India, could face a
double blow: patients would be hit with over-
priced brand-name drugs in domestic markets,
and their generic medicine industries would
face an assault from multinationals.
But the politics of free trade in drug
markets have a way of creeping northward
from the Global South as well. Health advo-
cates say free trade deals enable rich states to
implement pro-corporate policy frameworks
abroad and then import them back home
under the guise of neoliberal reform.
When it comes to the trade in medicine,
the Global Southwith an anemic regulatory
infrastructure and legions of desperately poor
patientsmakes a perfect petri dish for such
policy laundering. Intellectual property
rules that expand the already enormous U.S.
and European drug industry might provoke
opposition if aired on the floor of the U.S.
Congress, but might be eased through in a
closed-door session among non-elected inter-
national trade representatives. This kind of
shadow politics is illustrated in Washingtons
promotion of anti-counterfeiting protections
in trade deals, which parallel similar digital
piracy policies that lawmakers unsuccessfully
tried to push in Congress amid fierce public
outcry. Even though digital-rights activists
prevailed against the Stop Online Piracy Act
on Capitol Hill, the same kinds of structures
are at play internationally in more shadowy
political arenas: insider negotiations over
intellectual property rules in pending U.S.-
backed trade accords, including the TPP, have
threatened to bolster transnational monopolies
in software and other products.
Thats one of the things that sometimes
people in the U.S. dont realize, says Brook
Baker, a senior policy adviser at the Health
Global Access Project, an HIV/AIDS-focused
advocacy group. These trade agreements not
F A L L 2 0 1 3 DI S S EN T 73
PAT E N T S AG A I N S T T H E P E O P L E
only tie our trade partners hands, they tie our
hands, too, in terms of policy. Its really a back
door effort by big pharma and other IP [intel-
lectual property] industries...[T]hey seek all
these heightened IP protections in trade agree-
ments, and then they come back and bite us.
Free Trade Rules
The purported idea behind intellectual
property protections is to create market incen-
tives for innovationin the case of the phar-
maceuticals industry, guaranteeing a return
on sales for drugs. The value proposition gets
muddy when humanitarian needs and market
dynamics divergewhen malaria treatments
for a rural village, for example, turn vastly less
profit than the hot new anti-depressant. Or
when a drugs price is derived almost entirely
from the label on the box.
The generic drug sector operates on a
different tier of the market. With production
driven in large part by India-based firms, it
still operates within a market-based system,
but generics are exponentially more affordable
for poor communities compared to the
prices charged by dominant pharmaceutical
brands. Cheap generics are the crux of global
campaigns to expand HIV/AIDS treatment and
other medical solutions for patients in poor
countries, supplying UNICEF and the U.S.-
sponsored PEPFAR program.
The medicine-related provisions of TRIPS,
crystallized in the 2001 Doha Round of WTO
talks, ensure some political flexibility for
governments to circumvent patent protections
on public health grounds. The agreement
exempts poorer countries from regular patent
enforcement rules so that governments can
expand access to affordable medicines by
granting compulsory licenses to produce
generics, which override foreign companies
patents. For now, the poorest countries are
generally exempted from the WTOs major
patent enforcement policies, thanks to an
interim grace period that allows governments
to adjust their regulatory systems.
Nonetheless, TRIPS sets the framework
for future drug marketing and manufacturing
in poor countries. Public health advocates,
including World Health Organization (WHO)
officials, contend that TRIPS and related
7 4 D ISSE N T F A L L 2 0 1 3
free trade agreements containing various
TRIPS-plus provisions are designed to
expand monopoly power and maximize
profits, deepening the health gap between
nations where new treatments are developed
and poor regions where preventable scourges
still flourish.
The HIV/AIDS epidemic is one such
marketplace for drugs. While movements
have grown to expand treatment access,
The struggle for access to medicine presents
a legal and ethical minefield for rich and
poor countries alikeone that is being
fought out as humanitarians challenge
corporations over intellectual property
rights.
corporations have bulked up artificial barriers
through intellectual property laws. Today, 26
million people worldwide are still not getting
proper treatment, and the WHO has recently
pressed wealthy donor states for a major
infusion of aid for treatment programs. Yet
those same programs are sliding on a collision
course with powerful pharmaceutical monop-
olies. Activists warn that existing TRIPS
protections for access to basic anti-retrovirals
will not cover newer, more advanced ther-
apies, including second-line anti-retrovirals,
which are deployed when patients develop
drug resistance.
Other emerging disease threats may simi-
larly intensify under the industrys commercial
barriers. Health experts warn that obstacles
to treatment access for non-communicable
diseases, such as diabetes and cancer (which
are spreading rapidly in the Global South but
tend to attract less political attention than do
infectious epidemics), will engender the next
crises in global medicine in poor countries.
Perhaps most insidiously, new cutting-edge
medical technologies, like genetic material,
have already become new prospects for
enrichment for multinationals. Legal scholars
have warned that the systems public interest

protections do not adequately protect against
abuse of gene patents. A recent U.S. Supreme
Court decision restricts but does not ban the
commercial patenting of genetic material,
which may complicate the regulatory scope of
TRIPS.
According to Knowledge Ecology
Internationals analysis of the draft TPP
proposals, though the agreement has not
explicitly tackled gene patent issues, the U.S.
has proposed very low patentability standards
and also would require patents for diagnostic,
therapeutic and surgical methods, which
might affect policies on using genetic infor-
mation in diagnostic testing.
So who will police these new medical
frontiers? In the TPP negotiations occurring
as of this writing, business representatives
are granted special access to negotiators. Cox
explains that designated advisers from the
drug industry are able to see the text, make
proposals, and comment on proposals. Yet
on the advisory committee for intellectual
property issues, Not a single academic or civil
society group is represented....As a result, the
secretive trade negotiations make it easier for
pharmaceutical companies to get the provi-
sions they are lobbying for.
Courtroom Battlegrounds
International trade deals have set up powerful
legal structures to seal corporate power into
the enforcement of trade rules.
To ensure free access to domestic markets,
corporations can litigate patent claims through
opaque supranational investor-state tribunals.
Since patent protections are designed to
protect drug monopolies, public health
advocates say the legal arenas that review
patent disputes are inevitably rigged to serve
industry at civil societys expense.
While these quasi-courts have often
operated outside of public purvieweven
when their arbitrations relate to public
welfare issues like environmental protection
they can change public policy through legal
settlements that interfere with domestic court
rulings or regulations. Pharmaceutical giant
Eli Lilly, for example, recently announced
plans to use NAFTAs extra-judicial dispute-
settlement system against the Canadian
PATENTS AGAINST THE PEOPLE
government, in order to seek taxpayer
compensation following the governments
invalidation of patents on the attention deficit
hyperactivity disorder medication Strattera,
along with another lost patent for the schizo-
phrenia drug Zyprexa. For those two patent
cases, the company now seeks a total of $500
million in payback, claiming that Canadas
legal basis for reviewing patents violated
NAFTA treaty obligations by using overly
stringent requirements for proof of the medi-
cines efficacy. In other words, the company is
wielding trade rules to punish a government
for regulating its drug sector too tightly.
Some trade agreements have also estab-
lished special data exclusivity legal restric-
tions that preempt generic competition. As
a report from Public Citizen explains, this
mechanism enables incumbent drug makers to
bar other producers access to crucial research
data needed to obtain authorization to market
a medicine. Without that regulatory data, a
big-name manufacturer can simply stonewall
or delay the entry of a generic competitor.
According to a recent study on Colombias
generics market, data exclusivity has allowed
drug companies to siphon an extra $412
million from consumers compared to what
they would have paid in a drug market with
more price competition.
Since TRIPS was enacted, bilateral trade
deals between the United States and Chile,
El Salvador, and various other Global South
countrieswhich build on the WTOs baseline
trade ruleshave led to agreements to adopt
data exclusivity policies that could preempt or
delay generic entry into the market for years.
As an alternative to compulsory licensing,
some companies have tried to establish
so-called voluntary licensing agreements,
which enable generics to be sold in designated
countries in exchange for royalty payments to
the company. Still, such arrangements, which
might impose tight coverage restrictions, have
sometimes been criticized as a tool for corpora-
tions to retain influence over domestic markets
that are opening to generic competition.
To the humanitarian organizations doing
frontline medical work in poor regions, all
these efforts to limit the availability of generic
medicine are effectively pricing patients out of
survival. Generic competition has proven to
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be the best way to reduce prices and improve
access, says Rohit Malpani, Director of Policy
and Analysis with Mdecins Sans Frontires
Access Campaign. With restrictions to generic
competition, as potentially imposed by the
TPP, costs for treatments may go up and fewer
people will have access to treatment.
Stephanie Burgos, a policy adviser with
Oxfam America, said that when trade agree-
ments are allowed to dominate domestic intel-
lectual property policy, monopoly protections
for corporations are codified in a countrys
legislation. She added that in some cases,
Depending on the specific provisions in the
trade deal, it may be technically possible
for a government to invoke a public health
safeguard, such as a compulsory license....
However, most governments are intimidated
by pharmaceutical companies into refraining
from even considering such action.
Reclaiming Medicine
While the WTO has long militated against the
sovereignty of vulnerable countries health
systems, some governments in the Global
South are learning to resist monopolies while
working within the market to keep medicines
affordable.
In recent years, public health groups in
Asia, Latin America, and the United States
have launched campaigns to break the
monopoly of Abbott Laboratories, a major
manufacturer of anti-retrovirals Kaletra and
Aluvia, and to promote access to generic
versions of these critical medicines. Some
advocates have filed formal requests for
generic licensing; in Brazil and India, health
organizations have waged legal challenges to
the companys patent claims in order to break
its monopoly. Treatment providers and health
groups in China, Malaysia, and Vietnam
have also formally requested permission for
generic manufacturing. Public Citizen notes
that Ritonavir, one of Abbotts lucrative AIDS
drugs, is in fact a product of U.S. government
supported research, underscoring the fact
that many of the innovations that have been
monopolized by pharmaceutical brands were
cultivated in publicly financed laboratories.
Indonesia, home to some 380,000 HIV/
AIDS patients, enacted a presidential
7 6 D ISSE N T F A L L 2 0 1 3
decree in March authorizing compulsory
licenses for medications not only for HIV
but also Hepatitis B. Predictably, the
Switzerland-based International Federation
Free trade deals enable rich states to
implement pro-corporate policy frameworks
abroad and then import them back home
under the guise of neoliberal reform.
of Pharmaceutical Manufacturers and
Associations criticized the move as an abuse of
compulsory licensing rules that could reduce
the incentive to invest in future research
and development. Activists have nonetheless
continued to campaign for Indonesias prerog-
ative to determine how medicines are priced
in accordance with its public health priorities.
And in South Africa, officials are consid-
ering an overhaul of domestic intellectual
property regulations to stop patent ever-
greening, with the aim of preventing the kind
of IP trickery that the Indian courts struck
down in the Novartis case.
The pushback against corporate patent
regimes is just one facet of an emerging public
debate about global health justice. Seeking
more radical solutions to corporate drug hege-
monies, some advocates envision alternative
systems for developing medicines to serve
the highest-need communitiesfocusing on,
say, children with untreated HIV instead of
middle-aged consumers of brand-name sleep
aids.
Some health activists are envisioning
democratized pharmaceutical production
systems. A global patent pool, for example,
would safeguard public access to scientific
discoveries and technologies that could be
used for developing treatments. The system
would be based on open-access medical
publishing and free exchange of research,
without the traditional proprietary restric-
tions. One alternative research model,
proposed to the WHO by Bangladesh,
Barbados, Bolivia, and Suriname in 2009, is

a centralized innovation fund, which would
pool research and develop treatments like
antibiotics and vaccines aimed at serving
vulnerable communities. For HIV/AIDS
drug development, the Medicines Patent
Pool, based in Switzerland and funded by
the United Nations, has already established a
global knowledge-sharing platform to expand
production of low-cost medicines.
Since so many treatments are generated
through publicly funded research, some say
the corporations that eventually commercialize
those innovations should be forced to reinvest
in public, open scientific research, thus
returning some of their profits to the public
institutions.
Can we do better than the existing
system, asks Public Citizens Maybarduk,
where we treat pharmaceutical company
interests as proxies for the public interest, and
allow those companies to design the rules
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PATENTS AGAINST THE PEOPLE
that they find most appropriate and charge
the prices that they find necessary, and [to] set
that out as the deal?
A truly global health system would invert
that profit structure and move medicine back
into the control of the public trust.
But today, the idea of medicine as a social
good is overshadowed by the commodifi-
cation ofhealth itself. Under the global intel-
lectual property regime, the worlds poorest
patientsthose who pay their life savings
for a life-saving cancer treatment, or line up
to vaccinate their children from diseases that
more fortunate nations eradicated generations
agoare priced out of a medical market that
thrives on the pathology of capital.
Michelle Chen is a contributing editor at In These Times and
associate editor of CultureStrike. Follow her on Twitter
@meeshellchen.
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