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Access to essential medicines should be made widely available if the right to health is to be
universally observed (UDHR 1948: Article 25; ICESCR: Article 12). Multinational
pharmaceutical companies (MNEs) may manufacture and produce medicines in bulk,
however, they do this primarily for commercial purposes so that their obligations towards
their shareholders are met (Zambellas 2012b:35-52). Moreover, to ensure commercial
success, MNEs protect medicines through a series of patenting, trademark and regulatory
rules (Ho 2012). MNEs are within their right to protect medicines they have developed
first through their right to property (UDHR 1948: Article 17), however, not all countries
required patent protection for medicines until patenting was made compulsory for
member states of the World Trade Organisation (WTO) via the Trade Related Agreement
for Intellectual Property Rights (TRIPS 1994; 2001).
Hence, human rights seem to be yet again in conflict with international laws and
regulations where business interests are at stake, while restricted access to essential
medicines which mostly affects developing countries, is a universal issue and a prime
obligation of states (Ruggie 2011a-b). However, MNEs have increasingly incorporated
human rights policies in their corporate social responsibility (CSR) agendas and have been
engaged in some elaborate medicine access programs since before 2000, according to UN
Human Rights and sector-specific frameworks (Hunt 2008; Ruggie 2011a; Kosla and Hunt
2012). The objective of this report is to evaluate the right to health as a fundamental
human right and to discuss how TRIPS, other free trade agreements (FTAs) and resulting
laws may act to restrict access to essential medicines in developing countries using a range
of developing countries as examples. Through this discussion, it becomes obvious that
FTAs protecting the intellectual property rights (IPRs) of medical compounds may
simultaneously imperil public health in developing countries. However, it also becomes
clear that national and commercial interests coincide in increasingly tightening IP
protection rules and therefore, it is in this framework that global governance (Zambellas
2012a; Ruggie 2011a-2014a) is called for innovative solutions to promote access to
medicines worldwide.
A. Why the need for discussing access to medicines, IP rights and corporate
responsibility?
Restricted access to medicines impacts the right to health which then may pose a direct
threat to human life, hence the UN Office of the High Commissioner for Human Rights
(OHCHR) see healthcare as fundamental human right and confirms the obligation of
states to ensure sustainable financing, availability and affordability of essential
medicines; price and quality control; dosage and efficacy of medicines; procurement
1
practices and procedures... (OCHCHR 2014). The right to health features prominently so
in UDHR (1948: Articles 3 & 25) and in the Millennium Goals (WTO 2008), while the
economic crisis has placed an additional strain in access to medicines and
pharmaceutical cost (WHO/WIPO/WTO 2013). Access to medicines is compromised in
developing countries on all four underlying determinants, namely availability of
functional public health infrastructure, accessibility to health facilities, acceptability and
of medical and scientific quality (WHO 2007: p.2). This has resulted in over one million
people dying in Africa in 2002 (Forman and Kohler 2012) and, according to more recent
data, 18 million deaths annually from Group I causes affecting the poor, a life expectancy
differential of 79.4 versus 49.2 years of age in developed countries versus the African
region, and high mortality rates in least developed countries compared with the rest of the
world (Pogge, Rimmer & Rubestein 2010).
Some would, therefore, rightly argue that access to essential medicines for LDCs should be
treated as a basic human right. But, who should primarily bear that obligation? In both
current frameworks (WHO 2007; Ruggie 2011a/b) the states bear obligation to respect,
protect and fulfil the right to health, i.e. the state is obliged to refrain from interfering from
the enjoyment of, ensure that third parties (non-state actors) do not infringe on it and
taking steps to realize the right to health. Bachman et al. (2008) assessing the right to
health in 194 countries found that more than two thirds do not recognize it in their
constitution, only 54 that have ratified the IECSR include the right to health in their
constitution or one other statute and international recognition is even weaker than
national. Furthermore, legal recognition does not automatically suggest enforcement of
the right to health in health systems, while Bachman et al. conclude, given that the right to
health is a legally-binding obligation for states, a lot of work still needs to be done from
states to attain the right to health as aspired in UDHR. Hence, how can one expect MNEs to
assume the responsibilities of states? MNEs can, however, contribute to respecting the
right to health and with appropriate CSR programs to improving access to health in
developing countries.
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B. Who are the stakeholders? A global Governance Framework
Figure 1 below shows the stakeholders and how these affect access to medicines or how
they could collaborate to for policy alignment to improve access to medicines (Ruggie
2014). Public governance includes the obligation of states to ensure the right to health,
civil governance represents IGOs and NGOs responsible for policy design, alignment,
voicing and framing the issue and providing a platform for constructive discussion and
corporate governance represents the responsibilities of MNEs as they currently stand.
Figure 1: Global Governance System for Access to Medicines (adapted from Ruggie 2014).
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C. Why and how is access to medicines restricted?
Developing countries have currently agreed to join the WTO and, therefore, agreed to a
US-style health system regime by signing off TRIPS. Nevertheless, they are facing great
challenges adapting their national health systems, as, due to their resource-dependency,
they can do very little to influence the international environment. TRIPS was criticized by
the body of academia and civil governance combined (Reich 1987; Dutfield 2000;
Reichmann 2000; Abott 2002; Fellmeth 2004; Cameron 2004; Lopez & Gleeson ), from the
beginning, as it was reminiscent of U.S.s previously signed General Agreement on Tariffs
and Trade (GATT 1947) and North American Free Trade Agreements (NAFTA 1993;
Alvarado 2008) for favoring US corporations against poorer nations and for excluding the
civil society and unions from the negotiations (Elliot & Bonin 2002; Chomski 2011a/b).
Some critics claimed that pharmaceutical MNEs lobbied extensively to get TRIPS signed
from WTO members, specifically for securing IP protection for medicines amongst other
goods (Sell 2003 and Drahos 2002 in Ho 2011:xiv).
However, TRIPS contained some flexibilities from the beginning, for example TRIPS in
article 7 states the protection and enforcement of intellectual property rights should
contribute to the promotion of technological innovation and to the transfer and
dissemination of technology, to the mutual advantage of producers and users of
technological knowledge and in a manner conducive to social and economic welfare, and
to a balance of rights and obligations. Hence, under article 7, member states retain
flexibilities, including the ability to determine the grounds for issuing compulsory licenses
and for when to order government use, to allow parallel imports, to apply general
exceptions, such as early generic approval (Bolar exceptions) and to use transition
periods for developing countries, such as the one India made use of to adapt its national
legislation on (Gabble and Kohler 2014), and a longer extendible transition period for LDCs.
These flexibilities were re-affirmed by the Doha Declaration (TRIPS 20111/b) and were
used in a number of cases to improve access to medicines, such as the use of the 30 August
2003 mechanism in Rwanda, negotiation for lower prices and compulsory licenses for
antiretroviral drugs in Brazil, use of compulsory licenses in Thailand and the adaptation of
patentability criteria in India such that they align precisely with the needs of the state
(UNAIDS 2011; See Paragraph E).
Despite some encouraging examples which will be dealt with in detail in E below, studies
show poor patent-related amendments in national law of 142 countries, with the LDCs
scoring the lowest compared to higher income countries (Martin 2010; UNAIDS 2011).
There is now also an extensive body of evidence suggesting that bilateral trade
agreements under negotiation, like the Trans-Pacific Partnership and others contain
TRIPS-plus provisions which aim to restrict IP rules even further than TRIPS by extending
patents beyond the standard 20 years, limiting the ability of the state to issue compulsory
licenses and delaying testing, manufacturing and approval of cheaper generic versions,
forcing states to renounce on their strict patentability criteria and restricting parallel
imports thus preventing the cheaper supply of medicines (Sell 2011; EU-Marocco BIT 2014;
TPP 2013; 2014). However, TPP has yet a long way to go before it is signed (The Economist
2014).
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D. Evaluation of TRIPS and FTAs: Case Studies
Rwanda was the only country having utilized a TRIPS-waiver in 2011 for being a highly
debated measure, however in Rwandas case it resulted in 21000 people being treated for
HIV at the most affordable price globally in 2003-2004 by importing an ARV from a
Canadian drug company and issuing a compulsory license via the Canadian Access to
Medicines Regime.
Other countries which have used compulsory licensing to import generic medicines include
Thailand, Indonesia, Malaysia, Mozambique, Zambia and Zimbambwe (Elliot 2012).
The battle by Novartis for patent rights of its anti-cancer drug Glivec (Gabble & Kohler
2014; Chandra 2010: Novartis v Union India & Others) in India, is an example of national law
being adapted to TRIPs to protect Indian citizens, but also to address global health
concerns. Indian property law had included a very strict definition of intellectual property
which excludes ever-greening, and only a new formulation which had significantly better
efficacy than the older should be granted patent. By winning the case, India achieved two
goals, firstly it proved that a state can exercise its sovereign right to enforce IP law to the
benefit of the nations public interest, in this case public health and to protect its generics
manufacturing market and, secondly, to facilitate access to affordable medicines. India has
denied patent to a number of prototype medicines since 2005, very effectively (The
Economist 2012).
It is evident, therefore, that TRIPs flexibilities although having been greeted with
scepticism in the beginning, they have served developing countries as long as they were
able to adapt their domestic IP law accordingly. On the other, hand critiques suggest that
these provisions are too complicated and will not work for less well-regulated developing
countries and cannot be used widely to replace IP protection strategies (Bradford-Kerry &
Lee 2007; Anon 2013; Dutfield G. 2008).
With regards to MNEs responsibilities to observe the right to health in addition to MNEs
alignment with civil and public governance mechanisms to ensure that their commercial
activities are aligned to global health objectives (see Figure 1 above), sector-specific
guidelines (Hunt 2008; Kosla and Hunt 2012: pp. 39-41) specifically draw the attention of
MNEs to patents and licensing (Guidelines 26-32) which should be according to the
interests of the WTO member, while mostly the guidelines prior to 26 are aligned with WHO
Factsheet and are a useful guide for CSR strategy implementation. Indeed Davidson (2012:
pp.53-59) has remarked many an occasion where pharmaceutical companies have
implemented CSR strategies regarding access to medicine programs, but without aligning
with the four prerequisites of availability, quality, accessibility and acceptability. Finally,
Guideline 33 has to do with pricing where the MNE has to apply pricing procedure
favorable to the cost-bearing ability of the WTO member state. With regards to supplying
developing countries with essential medicines, this is also organized by WHO and, as UN 5
Human Rights and sector-specific guidelines, it is a fairly aspirational scheme, where
because there is little enforcement or ability to sanction any wrongdoing, a lot of mistakes
happen leaving people in the developing countries with poor access to essential medicines
(Davidson 2012: p. 60; PQM 2013). The PQM report is full of examples of countries where
the market is full of counterfeit medicines, e.g. anti-malarials in African countries,
indicative of lax national regulation.
IP protection is believed to promote innovation and better quality of medicine which can
then become a generic once the patent expires (Taylor 2013), but it has been argued that,
for all the benefits of the pharmaceutical industry, which counts a dramatic increase in life
expectancy, the bulk manufacturing of medicines which can be sold to many people at once
in a certainly more equitable system than if the making of medicines was entirely left to the
state and the industrys contribution to the diagnosis, prevention and treatment of many
known diseases, essential medicines are still overpriced and unavailable especially to
developing countries.
Apart from the fact that there is scarce empirical evidence that any state or private funding
could ever replace the pharmaceutical MNEs capacity for R&D, economies of scale in
innovation and bulk manufacturing capability in order to cater for public health of a
population of 9.6 bn by 2050 and growing, health fund raising initiatives like the Health
Impact Fund and the Gates Foundation may complement IPR based provisions, although
even these initiative do not go without criticism (Pogge 2010; Lidell 2010), while
differential pricing and compulsory licensing are ways to combat high cost of medicines to
improve access as described in Paragraphs C and D above. Additional methods include the
patent pools where MNEs, NGOs and research institutes to pool resources together and
license the collective effort for access to essential medicines, e.g. Knowledge Ecology
International and Essential Inventions Inc. proposal for humanitarian patent pools, e.g.
HIV/AIDS pool (Nicol & Nielsen 2010:240-241) and open source drug discovery, although
this is done in a very small scale (Srinivas 2010). Experts, however, keep stressing the
importance of transparency, monitoring and accountability and a rigorous anticorruption
policy aligned with an integrated human rights/CSR strategy and corporate governance
for pharmaceutical MNEs, to reinforce recent published data of improved access to
medicines (Lee and Kohler 2012; Zambellas 2012d; Grover 2011; Attard 2014).
Conclusively, MNEs have a social responsibility to respect and contribute along with states,
which are primarily obligated to provide access to essential medicines for their citizens. IP
protection may raise the cost of medicines and, being the main method by which MNEs can
capitalize on their investment, render profit to their shareholders and lower the trade
deficit of their home countries, free trade agreements are negotiated on the basis of joint
MNE and state interests, therefore they may inhibit widespread access to medicines to
those who cannot afford to pay for patented medicines. However, IP protection secures
innovation and therefore ensures that cheaper generic versions will be available for future
generations, while trade agreements flexibilities allow states to exercise their right to
sovereignty as is appropriate. Finally, there are a number of viable alternatives to IP
protection which can be successfully employed to contribute to better access to medicines,
until a global international human rights law treaty can hold MNEs accountable for
observing the right to health at all times.
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Note on Methods and Future Research
All references used for this report were peer-reviewed and by authors who publish
research on the topic of access to medicines, right to health, FTAs and corporate
responsibility, consistently since 1987. Literature searches were executed only using the
OU Library database by successively plugging in search words, like TRIPS, TRIPS & access
to medicines, intellectual property & access to medicines and then, successively whole
phrases from the question. Then, peer-reviewed and year filters were applied to end up with the
final list of references. 1987 was chosen as start date to give the author the chance to critically evaluate how
different FTA developed and a feeling of the debate they caused around the time they were being rolled out.
Despite investing 2/3 of total time on literature research for this report, reconciling FTAs
with human rights law and code of practice of MNEs (in paper or practice) deviates from
reaching the ideal state in every case study studied. However, states are primarily
responsible for observing right to health under the law, but this is also rarely respected to
an adequate standard.
The objectives of literature review was to (1) include policies, guidelines, academic
research and NGO critiques to evaluate all aspects of the debate, and (2) look at the
literature review since 1987 and see how the same authors would develop in, or maintain
the same, opinion about FTAs. The literature research strategy used revealed that only 2
out of more than 180, were positive about free-trade agreements and IP protection
regarding access to medicines, so there is a consensus amongst the majority of authors of
scepticism regarding FTAs. The majority of authors are very critical of the way MNEs lobby
to pass particular FTAs, while the responsibility of home states who back these FTAs is
highlighted but rarely critically evaluated.
This short report presents obvious limitations not least based on the lack of clarity on
exactly how much power FTAs hold over soft law, like human rights frameworks, and how
they are supposed to be implemented from all sides of the debate, when patent protection
for medicines needs to be reconciled with the need for access to essential medicines in the
developing countries. Additional issues and their impact, like e.g. price pressures arising
for the latter intersection, changes in the political landscape preventing beneficial FTA
provisions to be singed, like TPP under President Trump, how MNEs adapt to apply
pressure on states, like Novartis appointing Indian-born employees in key senior
management positions since the 2010 incident, will need to be continuously evaluated in
future reports.
Our conclusions provide nevertheless a sufficient scan of a body of evidence which (a)
debunks the common intuitive belief that manufacturing medicines automatically means
that MNEs will spontaneously operate to respect right to health just because medicines
are a public good, and which (b) proves that however big pharma operates to reconcile
price to include IP protection, access to medicines as well as its profit targets, should be
shaped dynamically by state regulation and civil society discourse. In this context, the
Access to Medicines UN Resolution adopted by the UN Council for Human Rights in 2016
was a welcome development which opens a new chapter in balancing effective remedies
and due diligence in the collaboration of state, civil society and MNEs regarding this issue.
7
Table of Abbreviations
8
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11
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