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Old Tricks Always Work


An echo from the TV set in the living room drew my attention while I was having dinner the other night. “Thailand remains on the Priority Watch List”, a woman news reporter said. It was on the 2nd of May in Thailand and the 1st of May in the United States when the Special 301 Report, a well-known annual report amongst trading partners of the United States’, was publicly launched.

Historically, the Report has been used repeatedly as a tool, alongside other forms of trade-sanction threats, to compel Thailand to make changes in its policies in favor of multinational pharmaceutical companies, regardless of the legality of Thailand’s actions and public health needs in Thailand. In many ways, it’s not so much a report as it is a blacklist issued on behalf of multinational pharmaceutical companies (and other IP-based industries in the United States).

This is not the first time that Thailand has been placed on the blacklist. Old tricks always work, and I’m afraid this one will work again if the Thai government doesn’t learn from past experience.

Thailand had its first patent law put in place in 1979, known as the Patent Act B.E. 2522. The Patent Act followed a “process” patent system and gave a patent owner the rights to solely produce and market its product for 15 years under the patented process only. The U.S. trade Representative (USTR) and PhRMA – an association of American drug companies, exerted great effort into forcing the Thai government to amend the law in such a way as to benefit the multinational pharmaceutical industry. Unfortunately Thailand couldn’t tolerate massive and constant pressures by the USTR and U.S. drug companies; the nation gave in and amended its patent law twice, once in 1992 and again in 1999, which have since had significant impacts on access to affordable medicines by Thai people.

Two years before the first patent law amendment, Thailand was placed on the Priority Watch List (PWL), an intellectual property infringement category defined by the USTR, and included in its annual review report, which is known as the Special 301 Report. This report is taken seriously by developing countries, like Thailand, whose economy heavily depends upon exports to the United States. When a country is listed in the Report, it implies that the country is at risk to face United States trade sanctions unless it takes action in response to allegations claimed by the USTR. Later in January 1991, PhRMA filed a petition asking the USTR to cut off GSP (Generalized System of Preferences) trade privileges given to Thailand, asserting that the Thai government didn’t give adequate and effective patent protection for pharmaceuticals.

The Special 301 report requests US trading partners to introduce standards of intellectual property protection that exceed minimum obligations under international trade rules; even worse, many trading partners offer to do more than what the USTR asks with the hope of retaining good economic relationships and securing trade privileges that the United States gives to those countries.

As a result, Thailand had its Patent Act amended and enacted in September 1992. Since then, the Thai patent law shifted to follow the “product” patent system. Under this system, a product patent allows exclusive manufacturing and marketing rights relating to a product, while a process patent relates to a means. To follow a product patent system, a patent owner gets more benefit than through a process patent.

Despite the fact that the WTO’s developing country members had an obligation to introduce product patenting within 6 years after the Trade-Related Aspect of Intellectual Property Rights (TRIPs) Agreement became effective in 1995, Thailand would have benefited from this grace period to increase its capacity in local pharmaceutical manufacturing. On the contrary, India, which is now a world-class generic-medicine manufacturer and the “pharmacy of the developing world”, made use of the 6-year transition period and succeeded in its request for an additional 5-year delay to fully comply with the TRIPs Agreement’s obligations. As a result, India just recently passed a new patent law in 2005 in accordance with the TRIPs Agreement’s obligations. Today, Indian generic manufacturers produce over 67% of the world’s generic medicines, and 80% of anti-retroviral medicines needed to treat HIV and AIDS.

Besides the early change to follow a “product” patent system, the patent protection term in Thailand has been extended from 15 to 20 years, delaying market competition by generic-drug manufacturers for an additional 5 years. Nevertheless, this law still gave a little light of hope to the Thai people, ensuring that they would eventually have access to medicines at reasonable prices. The law included a mandate that the government had to appoint a Pharmaceutical Patent Review Board to be given authority to control drug prices. The Board also had power to require cost and pricing information, and to allow penalties for failure to supply sufficient information.

The candle was blown out when this Board was abolished in 1999. The USTR placed Thailand on the “Watch List” in 1998, claiming that the Pharmaceutical Patent Review Board was inconsistent with the TRIPs Agreement. In 1999, Thailand remained on the same list. It ended up that the patent law was amended for the second time with the abolition of the Patent Review Board. But, Thailand still remained on the “Watch List” in 2000 on a charge of copyright issues.

The same story is recurring now. Thailand was reinstated to the blacklist as a “PWL” country in the 2008 USTR Annual Review Report, presumably in response to the decision of the Thai government to issue a number of compulsory licenses on AIDS, heart-disease, and cancer medicines in December 2006 and January 2007 to address a public health concerns due to the lack of essential medicines to treat these diseases at affordable prices. By this compulsory licensing policy, Thailand can temporarily override drug patents registered in Thailand and produce or import generic versions of the medicines to address public health concerns. This is a legal mechanism in line with both the national patent law and the WTO’s TRIPs Agreement. The compulsory licenses, alongside the inadequate and ineffective copyright protection, were alleged as key rationales in putting Thailand on the list.

In 2009, the USTR announced it would not remove Thailand from the PWL (along with the Philippines who recently challenged the power of the multinational pharmaceutical industry by passing legislation on universal access to affordable medicines that introduces public health safeguard measures in compliance with TRIPs Agreement).

In spite of the fact that the USTR has placed Thailand on the list this year for non-drug-patent issues, we cannot assume that the Thai government will follow the same path as in the past, especially under the current duress and tension of the global economic crisis. However, to submit to the requests greater than the TRIPs Agreement’s minimum requirements doesn’t guarantee that Thailand will be taken off of the list; indeed, Thailand may sacrifice a pro-public health policy for no benefits in return as it did in 1992 and 1999. The Thai government should differentiate between a breach of intellectual property rights (e.g. copyright issues) and legal public health safeguards, and should stand firm to protect the health of the public.

Photo by Tom Greenwood

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