TCS Daily

A Mexican Mistake?

By Roger Bate - April 22, 2003 12:00 AM

A year and a half ago in Doha, Qatar, long before it became the center of the Iraqi war effort, the war on AIDS was supposed to be re-charged by the World Trade Organization. At the Doha WTO Ministerial meeting an agreement was reached permitting poor countries to disregard patent protections for drugs designed to treat diseases that posed a special burden, an "emergency", on those impoverished societies. What the ministers had in mind in allowing the compulsory licensing of drugs was improving access to treatments for malaria and AIDS in countries like Benin and Botswana that have been hit hardest by disease epidemics. But instead the Doha declaration, as it is now known, has been used by mid-income countries such as Egypt and Peru for improving access to lifestyle drugs like Viagra.

Now Mexico is threatening to use the Doha declaration to re-write sections of its laws as they pertain to intellectual property. But the proposed legislation is a violation of WTO rules and Mexico's obligations under NAFTA and would harm trade between Mexico and the U.S. since the U.S. is expected to retaliate. Worst of all, it will do long-term harm to global efforts to combat destabilizing diseases such as AIDS.

Drug patents are granted for 20 years. It usually takes between 8 and 12 years for a chemical innovation that is patented to become a drug on the market. In the remainder of the patent's life the company that patented the drug retains the exclusive rights to make a profit to recoup research and development costs of this drug and some money for the hundreds of drugs researched that fail to make it to market.

A bill pending in the Mexican Congress seeks to undermine those patent protections. It proposes to amend Article 77 of the Mexican Patent Law, allowing compulsory licensing of products to treat any "other serious diseases".

The bill's sponsor, Congressman Jorge Gonzalez Torres, founder of the Ecologist (Green) Party, claims that if it passes it will reduce the current cost of drugs for cancer and AIDS by 10 times. Congressman Torres believes it will achieve this aim through competition. The bill proposes that any generics drug company interested in making a knock off copy of the patented product or process may request the granting of a non-exclusive "emergency" license from the Government. A special body of the Health Department will make the decision as to what constitutes an "emergency", but it is unlikely to be confined to the limited original aims of the Doha Declaration.

Conflicts of interest raise several troubling questions. Congressman Torres may have economic motives in promoting the bill. His brother, Victor Gonzalez Torres, owns Farmacias Similares, and as the name implies it is a producer of copycat medicines. In fact it is one of the largest local generics producers in the country. And the health ministry, which buys drugs, is hardly an impartial body to make decisions about confiscating patent rights.

By ignoring patents, by not recognizing the due process of law (the patent holder would be impeded in opposing the granting of the license), and by discriminating against foreign companies, the proposal contradicts several NAFTA and WTO provisions. Furthermore it discourages the incentive for drug companies to continue to develop drug treatments if their inventions are ripped-off.

Although Mexican President Vicente Fox's party does not back this proposal, since it will harm inward investment into Mexico, the legislation is popular among the poor and old who perceive that they will get cheaper medicines. So the President is unlikely to veto it.

But it's not patents that are the problem here. The embarrassing truth is that Mexicans are understandably reacting to the failure of the government to fund even the most basic health needs of poor people. Unfortunately, it appears that the Fox administration is tempted to make decisions based on hanging on to power rather than sound policy.

Grey F. Warner, Senior Vice President for Merck and responsible for that company's operations in Latin America said, "At a time when companies like ours are scaling up research, manufacturing and marketing of new medicines in Mexico, measures like these are a clear disincentive for investment."

For countries to allow numerous companies to sell rip-off Viagras for erectile dysfunction is one thing. But allowing a large country like Mexico that is relatively wealthy by global standards to abuse the Doha declaration by encouraging copies of patented drugs for any disease is another matter entirely. Mexico is no Malawi. If the initiative passes, it will undermine, possibly fatally, the Doha declaration, and harm long-term access to drugs for both the poorest and wealthiest nations alike.

Dr Roger Bate is Director of Africa Fighting Malaria and a columnist for

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