Review of Ellen F.M. ‘t Hoen, The Global Politics of Pharmaceutical Monopoly Power, Drug patents, access, innovation and the application of the WTO Doha Declaration on TRIPS and Public Health

Professor Frederick M. Abbott and Ellen 't Hoen

Cite as: Abbott, Frederick M., “Review of Ellen F.M. ‘t Hoen, The Global Politics of Pharmaceutical Monopoly Power, Drug patents, access, innovation and the application of the WTO Doha Declaration on TRIPS and Public Health” KEStudies, Vol. 3 (2009).

Review of Ellen F.M. ‘t Hoen, The Global Politics of Pharmaceutical Monopoly Power, Drug patents, access, innovation and the application of the WTO Doha Declaration on TRIPS and Public Health
Frederick M. Abbott
April 2009

Ellen ‘t Hoen has been on the front line of international efforts to promote access to medicines for people in developing countries. She has used this experience to great effect in producing a chronicle of the access to medicines and the innovation and access movements that will inform policymakers, public health experts and students for years to come. She has also insightfully identified critical unresolved problems in developing and supplying new preventives and treatments. She explains some of the more promising recommendations for addressing them. Few people could have tackled this project with more direct personal knowledge of the events, and combined that personal knowledge with such a skilled legal analysis.

Medecins sans Frontieres (MSF) (or Doctors without Borders) became involved in demanding improved access to medicines because it was confronting desperate patients throughout the developing world for whom it was unable to provide basic treatments, particularly as the HIV-AIDS pandemic emerged in sub-Saharan Africa. The treatments that patients needed were priced far beyond their financial means, and usually far beyond the means of their national governments. By the late 1990s, combination antiretroviral treatments for HIV-AIDS were in use in the developed world, but the annual per patient price was about $10,000 per year. It was clear that the manufacturing costs were far below that price, but patents held by originator pharmaceutical companies precluded generic suppliers from entering the sub-Saharan African and other developing country markets. The equation to be solved at that stage was fairly straightforward. If MSF and others were to provide treatment, the patent barriers would need to be breached.

Ellen ‘t Hoen served for a decade (1999-2009) as Director of Policy and Advocacy of the MSF Campaign for Access to Essential Medicines. In that role, she tirelessly encouraged the World Health Organization to play a more active role in providing technical support to developing countries in the use of TRIPS flexibilities. She was a key actor in the NGO movement pressuring the pharmaceutical originator companies, and the US and the European Union governments, to abandon efforts to force the South African government to withdraw its progressive 1997 Medicines Act. She was engaged in preparing and promoting adoption of the Doha Declaration on the TRIPS Agreement and Public Health of 2001, as well as several important resolutions on innovation and access at the World Health Assembly. She was instrumental in promoting establishment of the Drugs for Neglected Diseases initiative (DNDi). She has now joined UNITAID as an expert on the creation of patent pools.

In her book, ‘t Hoen recounts the factors that motivated adoption of the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS Agreement) that entered into force in 1995. This agreement was adopted almost wholly at the instigation of intellectual property rights holder interest groups, the originator pharmaceutical industry among the most powerful supporters. Up until the TRIPS Agreement, many developing countries did not provide patent protection for pharmaceutical and food-related products on grounds that these fields were of critical social importance, and that patent barriers would adversely affect the public interest. Although the consequences of the TRIPS Agreement for the pharmaceutical sector were foreseeable, public understanding of the issues was limited at the time of the negotiations, and developing country governments could not effectively resist developed country pressures. ‘t Hoen observes that entry into force of the TRIPS Agreement transformed the pharmaceutical landscape in ways that are only today becoming clear, and that the results are not by any means satisfactory from a public health standpoint. The patent system as it is presently administered is a too crude instrument for addressing the nuances of pharmaceutical development and distribution and the implications for public health.

‘t Hoen walks the reader through the Kefauver Commission hearings of the late 1950s and early 1960s and their critical assessment of pharmaceutical industry patent and pricing practices, though the TRIPS negotiations during the GATT Uruguay Round, through the South African Medicines Act dispute and the subsequent challenge to Brazil’s compulsory licensing legislation, to the first TRIPS Council meeting at the WTO to discuss the relationship between the TRIPS Agreement and Public Health, to adoption of the Doha Declaration and the subsequent contentious negotiations resulting in the August 30, 2003 Decision (and the 2005 Article 31bis amendment). She discusses the compulsory licenses and non-enforcement letters issued by least developed and developing countries taking advantage of TRIPS Agreement flexibilities, largely to facilitate the importation of HIV-AIDS related medicines. She takes the reader through the various studies, meetings and decisions at the WHO that have brought us today to the WHO Global Strategy and Plan of Action on Public Health, Innovation and Intellectual property.

‘t Hoen makes the point that, despite the Doha Declaration, middle-income developing countries like Thailand and Brazil that have made use of compulsory licensing and other TRIPS flexibilities nonetheless have come under tremendous pressure from the European Commission, the United States Trade Representative and the originator companies. She also takes note of the highly problematic trend for the United States and EU to negotiate even more restrictive standards in bilateral and regional trade agreements, and as a condition to WTO accession. While optimistic, ‘t Hoen clearly recognizes that this is an ongoing struggle. And, she observes that the situation of generic producers in India is becoming more difficult as the 2005 TRIPS implementing amendments to the Indian Patent Act begin to bite.

Ellen ‘t Hoen chronicles negotiation of the WTO August 30, 2003 Decision (largely in Annex 5), and the resulting Article 31bis amendment. The NGO community pressed very hard — and without compromise – for a solution that would be easy to use and that would facilitate exports without hindrance by patents. The United States was steadfast in its opposition to such a solution, with implicit and explicit support from the European Union. One point that may be somewhat underplayed in ‘t Hoen’s account is the complex environment in which developing countries negotiators were operating. They did not share a uniform position during the negotiations, and most all accepted that some set of controls would be required. The negotiations largely revolved around the level of controls that could be accepted by all sides. The developing country TRIPS delegates who were at the heart of these negotiations were very talented. They appreciated that using the August 30 solution would require some effort, but believed it would benefit public health.

‘t Hoen makes a major point regarding the OECD political backlash that confronted Thailand and Brazil with their recent issuances of compulsory licenses. Developing countries will be reluctant to try the Article 31bis solution in the face of similar political costs. No set of legal rules is going to allow developing country exports of drugs protected by OECD patents until there is a change in the political dynamic surrounding this area. If use of the Article31bis solution were insulated from the realities of global politics and power, the bureaucratic obstacles might not appear so serious. The corrosive influence of pharmaceutical industry power is a central thesis of Ellen ‘t Hoen’s book, and it is at work here.

While the initial challenge of the access to medicines movement was to force moderation of prices and increase public financing for procurement of HIV-AIDS medicines, this was only part of the longer-term challenge. The longer-term challenge is to improve the mechanisms for innovation in the pharmaceutical sector that over the past two decades have grown increasingly problematic. Pharmaceutical research is skewed between blockbuster treatments, on one side, and “me-too” extensions of existing treatments, on the other. Potentially promising avenues of research that do not fit within either of these categories are set aside. Research is concentrated in areas where there are wealthy paying customers, while the needs of the poor in developing countries are virtually ignored. Insurance schemes in the wealthier developed countries desensitize consumers to prices.

Ellen ‘t Hoen identifies a number of good ideas to address these myriad problems, such as mechanisms to decouple research and development expenditures from pricing and distribution, the award of prizes, the negotiation of a comprehensive research and development treaty, the establishment of patent pools, and the formation of public-private partnerships such as DNDi. She explains that these are options that may well be considered as part of the WHO Global Strategy and Plan of Action.

Finally, ‘t Hoen suggests, as have others, that pressures for reform of the mechanisms to develop and supply pharmaceuticals may not come from altruistic developed country concerns with the welfare of people in developing countries, but instead from real budgetary pressures facing the United States, the European Union and other developed regions. We see this already in the planning of the administration of President Obama in the United States. We have heard this song before, and the industrial healthcare lobbies have to date largely succeeded in forestalling necessary reforms. Ellen ‘t Hoen says she remains optimistic despite the seemingly endless character of the public health struggle. This is a good thing because her continuing engagement is important to us — as evidenced by this book.