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The inconvenient truths of intellectual property

By Natalie Ngo - posted Friday, 12 October 2012

So we are told by our governments-mostly developed countries- that intellectual property is crucial in building strong economies.

And we believe them. So does the rest of the world because in 1995 158 countries signed the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) to set the minimum standards of protection for intellectual property rights.

However we rarely paid much thought to the impacts this agreement may have on the people that have yet had a chance to grasp the benefits of intellectual property. Part of the reasons is because they are fighting against something slightly more dangerous every day-HIV.


Approximately 6.64 million people in low to middle-income countries are receiving drugs treatment for HIV. One of the TRIPS's many provisions is the extension of patent protection for pharceutical products up to 20 years. A majority of HIV drugs originate from the US where patent rights are prolonged and strengthened rigorously by the TRIPS. The price of HIV medicines are thus driven up because low-cost producers in India or China have to expense approximately a third of cost price on patented formula. Patented versions of HIV drugs typically cost about 3 to 15 times more than the generic version, whose production is significant reduced by the TRIPS.

While this fact may please many pharmaceutical multinationals given whose profit margins are through the roof, it means something of the opposite effect to HIV-infected patients in developing countries. They now have significantly less access to treatments because most of them cannot afford to pay the cost. A report by Oxfam revealed in 2001 that a quarter of Kenya adult population is HIV-positive but less than 2% are receiving treatment.

While it is true that developing countries are granted more time to adjust to the provisions in the TRIPS and they can also apply for extensions through the World Trade Organization, at the end of the day, HIV-infected patients will either have to wait when the patent expires after 20 years or alternatively, die waiting. Waiting because it takes time to purchase patent, and die waiting because even if generic drugs do make it to the market, majority of HIV-positive patients cannot afford it.

Fortunately there exists a solution. An initiative called 'patent pool' has been created by international HIV charities to lower the price of patent for developing countries. It works by encouraging voluntary licenses from patent owners, thus providing low-cost access for drugs manufacturers in developing countries. This is by no means easy to implement. Sure, major drugs brands claim their primary concern is patients' well-being. However the bottom line is they are more concerned about their profits. And consequently, voluntarily giving up patented formula for next to nothing is not the best way to fatten their purse.

So can anything else be done? Countries indeed need to take initiatives here. Take Brazil's compulsory license scheme for example. This scheme basically legalises local production of generic drugs while patent protection is still in place. It has successfully cut the price of a 200mg table from $2544 to $259 per patient per year. African countries and other areas heavily impacted by HIV should definitely consider Brazil's solution to this problem.

Furthermore, the reason why only a small proportion of HIV patients in Africa is receiving treatments does not stop at the TRIPS itself. A brief prepared by Global Commission on HIV and the Law revealed that the problem also lies in individual countries' decision to incorporate the TRIPS into their respective domestic law. Countries like Angola, Ghana or Mozambique, who are eligible for the WTO waiver regarding patent protection to pharmaceuticals, are not taking advantage of this very important flexibility. African domestic laws mostly adhere completely to the TRIPS and does not provide for any exception that would significantly improve the situation for local victims of HIV.


Ultimately if governments really want to increase access to HIV treatments for their people, they should examine the extent to which certain flexibilities in the TRIPS can be incorporated into their national legal system. Additionally exploring the impact of regional intellectual property rights agreements and free trade agreements on access to medicines would also be an appropriate first step in maximizing access to treatments for HIV patients.

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About the Author

Natalie Ngo is a student at the University’s of Melbourne’s Faculty of Business & Economics and recently returned from the Global Voices WTO Australian Youth Delegation.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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