This is an archive of the Treatment Action Campaign's public documents from
December 1998 until October 2008. I created this website because the TAC's
website appears unmaintained and people were concerned that it
was becoming increasingly hard to find important documents.
The menu items have been slightly edited and a new stylesheet applied to the site. But none of the documents have been edited, not even for minor errors. The text appears on this site as obtained from the Internet Archive.
The period covered by the archive encompassed the campaign for HIV medicines, the civil disobedience campaigns, the Competition Commission complaints, the 2008 xenophobic violence and the PMTCT, Khayelitsha health workers and Matthias Rath court cases.
The United States has recently complained to the World Trade Organization (WTO) that Brazil's "local working" requirement in its patent law is in violation of the Agreement on Trade-related Aspects of Intellectual Property Rights, better known as TRIPS. The US argues that the local working requirement violates TRIPS as it gives the Brazilian government the power to issue compulsory licenses or import either the patented product or the product obtained from the patented process when companies fail to work their patents locally. The local working requirement thus applies when drug companies import patented drugs rather than produce them locally, but only if the companies cannot show that it is economically or legally unviable to produce locally.
While it is true that TRIPS states that patent rights are to be "enjoyable whether products are imported or locally produced", TRIPS permits local working requirements. Some of the objectives of TRIPS are that the "protection and enforcement of intellectual property rights should contribute ... to the transfer of technology" as well as socio-economic development. TRIPS also recognizes that measures may be taken to "prevent the abuse of intellectual property rights and ... the resort to practices which ... affect the international transfer of technology." Further, TRIPS allows countries to "provide limited exceptions for the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of a patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties." When read together, these (and other) provisions mean that the Brazilian local working requirement is fully TRIPS-compliant.
A point raised by drug company apologists is that there is no connection between access to drugs and local working requirements. Nothing could be further from the truth. The purpose of local working requirements is to encourage the transfer of technology by making sure that foreign patent holders set up production facilities within the patent granting country. Technology transfer is necessary for the sustainability of existing treatment programmes as it ensures that the local Brazilian pharmaceutical industry will be able to produce anti-retrovirals without the assistance of the patent-holder when the patent expires or in the event of a compulsory license being necessary before the patent expires. Pharmaceutical companies will be much more cautious about abusing patents if they know that Brazil has the knowledge, skills and capacity to manufacture a generic version of a patented drug. In addition, local working encourages sustainability by helping to insulate the price of patented medicines against currency devaluations, as well as supporting the development of local expertise which is vital in addressing local needs.
Without local working requirements, many countries are left at the mercy of foreign patent holders who will decide on the basis of their own profit-motivated interests whether or not to transfer technology. Without this technology transfer and the development of local expertise, the sustainability of national drug programmes is placed at risk. This is especially important in the case of Brazil. Under TRIPS, Brazil has recently had to extend patent protection to the pharmaceutical industry. Brazil was able to develop a national drug industry and a free treatment programme for people with HIV/AIDS precisely because it did not grant patents for drugs. With drugs now protected by patents, a prohibition on local working requirements threatens to undermine these local industries and leave the market open to supply by foreign drug companies at exorbitant prices. At the very least, local working requirements would help to ensure that Brazilian technology maintains its current levels of development, and that affordable medicines are available to Brazil's predominantly poor population of 165 million people.
But the US action is far more dangerous than its potential to force Brazil to abandon its local working requirements. One need go no further than the challenge of the Pharmaceutical Manufacturers' Association of South Africa (PMA) to the implementation of the Medicines and Related Substances Control Amendment Act, 90 of 1997, to see the chilling effect of threatened action. Just by lodging court papers more than three years ago (and without obtaining any order of court), the PMA has successfully prevented a democratically elected government from doing what the Constitution requires it to do: taking reasonable measures to realize the right of access to health care services. The US initially supported the drug companies by threatening trade sanctions against South Africa. Only activist pressure in the US, South Africa and elsewhere has reversed the US government's position.
But the current US position regarding Brazil is different. While the US may have taken only one issue to the WTO, its official policy is to pressurize developing countries outside of Africa to grant stronger patent protections than required in terms of their TRIPS obligations. Through bilateral pressures, it has continued to pressurize Brazil into dropping its compulsory licensing provisions designed to increase access to essential treatments. As the Consumer Project on Technology reports, such pressure was placed on the Brazilian government last year during a visit by then Commerce Secretary Daley, travelling with executives from drug companies Merck and Pfizer. If anything, the application of this policy is expected to increase under the Bush administration.
It would be wrong to see the US-Brazil trade dispute as a narrow technical challenge to a non-health-related concern. Such an approach is not only inaccurate, but also misleading and dangerous. The US action is aptly described by the Brazilian trade representative at the WTO:
"[T]he TRIPS Agreement reflects a delicate balance that took developing countries to the limits of acceptability. This delicate balance was reflected, in the case of Brazil, in internal legislation which is fully consistent with the letter and the spirit of the Agreement. The United States is now seeking an interpretation of TRIPs that threatens to upset such balance."
The action should be seen for what it is: the continuation of a long history of bullying weaker nations in pursuit of narrowly defined US commercial interests