September 12th, 2008

Compulsory Licensing in Thailand: Reality Bites

Posted in  Health Care  Intellectual Property  Trade 
Author: Susan Finston || Location: Washington, DC, USA

Continuing protests destabilizing Thailand’s democratically elected government appear to enjoy tacit support from the military and from former military rulers.  Given continuing threats to democracy in Thailand, it may be timely to recall some of the controversial policies of the former military junta, the last time around, like the abrogation of rule-of-law protections for private intellectual property rights, also known as compulsory licensing.

Compulsory licensing is controversial practice in which a country over-rides intellectual property rights (generally) associated with a brand name prescription drug.   On review, it turns out, this counterproductive move had little or nothing to do with  urgent public health needs, and everything to do with the junta’s need to  bite the hands of multinational companies to further their political ends.

In late 2006 and throughout 2007, the Thai military junta did great damage to that country’s international investment climate and reputation as a rule-of-law country by stripping Western companies of their intellectual property protections guaranteed under international law and custom.  Like the famously premature report of Mark Twain’s demise, assertions that Thailand took this extreme step in reaction to a threatened public health crisis appear to have been greatly exaggerated at best.  

In fact, the Thai ministry of health’s initiative targeted highly innovative, economically valuable drugs produced by multinational companies, including cholesterol therapies among others, without correlation to public health pandemics or threats.  (Or else we all somehow missed the global high-cholesterol pandemic of 2007.)  And this was a “Robin Hood” policy that stole from Western companies and awarded profitable contracts to highly profitable Indian drug manufacturers — not exactly giving to the poor.  

 Also, Thailand’s growing public health challenges have little relevance to international activists campaigns to promote compulsory licensing for HIV/AIDS drugs.

Review of the World Health Organization’s (WHO) now publicly available statistics for this period further debunks the public-health threat gambit.  Based on the WHO’s latest data, Thailand has a lot to brag about in terms of its public health achievements in the region: leadership in childhood immunization rates (95% to 99% coverage in all major categories), and related progress in curbing early childhood mortality, excellent literacy rates for both girl and boy children, and increasing life-expectancy rates rivaling much of Europe.   Overall rates of HIV/AIDS infection have fallen to 1.5% of the general population, and over 80,000 patients receiving HIV/AIDS therapies in Thailand (nearly three times the number of estimated patients getting therapy in all of India).  

Overall, despite lower than average spending for the region (and its level of economic development), the WHO statistics and related reports  show a public health snapshot that looks less and less like a poor sub-Saharan country  — countries that justifiably may rely on drug donations and other public-private partnerships to meet domestic public health goals, and have not turned to compulsory licensing.

Instead, Thailand is facing new challenges common to richer, developed states, like the United States and Europe, including an aging population, childhood obesity and the related growing need for hospice and elder-care.   So Thailand looks a lot more like us, and faces very different public health issues than its poorer, less-developed states in Asia and Africa.  

Compulsory licensing, in general, has proven to be a false harbinger of public health gains; no country has created durable social and economic benefits for their people resting on a foundation of shaky private intellectual property rights.  Thailand’s former minister of health has now tacitly acknowledged this reality, calling for Thai researchers and those in other developing countries to file for and hold IP rights for development of innovative therapies targeting tropical diseases.  (While still displaying a simplistic view of the R&D process, at least it shows increasing awareness of the value of patent protection for social and economic development.)

The bottom line: Thailand’s military junta simply wanted to burnish its populist credentials, particularly at the expense of Western companies by expropriating their exclusive rights to patented medicines.  Again, to quote Mark Twain, “If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man.”    

Thailand does not question the benefits of commercially valuable innovative drugs, which have no doubt contributed to Thailand’s increased prosperity and growth.  The leaders just don’t want to pay even discounted prices at levels intended for much poorer, needier Asian and African states.  That is another reality, though biting, to keep in mind as Thailand looks to be entering another period of vulnerability for democracy based on rule of law.