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More on patents and capitalism

May 11th, 2007 by Nicholas Farrelly · 11 Comments

New Mandala readers keen to follow different arguments around the current patent brawl will find contributions from two of the best Thailand-focussed blogs particularly useful.

  • Thailand Jumped the Shark’s combative approach finds fresh material in a thorough deconstruction of Tulsathit Taptim’s recent The Nation op-ed.  The comments that follow are also very much worth reading. 
  • The Lost Boy (who is, by the way, worth regular visits) provides his thoughts from a very different perspective.  He also has some important commentary on the controversial www.thailies.com website (which cannot reportedly be accessed from Thailand).

As always, New Mandala reader reactions to this evolving story are very welcome here. 

Tags: Sufficiency Economy · Surayud regime · Thailand

11 responses so far ↓

  • 1 Jon Fernquest // May 11, 2007 at 4:45 am

    Thailand Jumped the Shark Blog makes some good points, and that columnist never presents very convincing arguments, but he errs in treating Thai people and Thailand as one monolithic thing. It isn’t.

    Thai nationalism constructs an imagine of unity.
    But the reality poor people face is quite different.
    Nothing is going to change, especially the distribution of income, and prostitution illegal? If you read old articles, the police publicly deny it even exists, but privately at the local level are deeply involved in trafficing and extracting rents from brothels.

    If you could somehow take pictures of all these lies and display them all simultaneously, so they could not be denied, they would still be denied.

    Furthermore, in all the situations I’ve seen, the person who breaks the law or acts immorally, gets rewarded for it, even promoted, like the mafia, after bloodying your hands.

    For instance, in a college a friend of mine taught at, one of the older male teachers was acting as a sort of escort service for his good-looking female students with local businessmen. Did he get sacked? No he got a scholarship to Australia!

    Things like this cannot and will not change if people accept them passively and non-confrontationally, but I’ve never seen it otherwise, so they end up getting what they asked for, all over again, like the wheel of samsara.

    Religion could be the way out, but the likelihood of everyone simultaneously lead upright lives like Chamlong Sri Muang, so Chamlong could govern them all, and not get kicked out as mayor, not very likely.

  • 2 roger p // May 11, 2007 at 12:03 pm

    thanks for the links, Nicholas

  • 3 Zheng Chao // May 11, 2007 at 1:51 pm

    This is an unfortunate battle. On the one hand, thousands are potentially being denied access to life-prolonging medications. On the other hand, pharmaceutical companies do dedicate a significant amount of time and money to research and development, and the idealistic notion that those companies should simply ignore patent infringement is untenable. By extension, I am reminded of the prior government’s 30 baht-treats-everything policy, wherein the government compelled hospitals to treat patients beyond the hospitals’ budgetary capacities. Even in countries with more developed national health plans, there are limits and restrictions on what treatments one may receive, and when one may receive them.

    I also would be curious to find out specific details of HIV treatment in Thailand. Medication regimens are better tolerated nowadays, but still associated with significant side-effects, and poor treatment compliance raises the risk of resistance and a need for (expensive) second-line therapy.

    That being said, I do take issue with Thailand Jumped the Shark’s assertion that HIV/AIDS is purely a problem of human behavior, and that safe sex or no sex would bring the problem to a halt. Unknowing recipients of the virus, e.g. a woman acquiring it from her spouse/boyfriend or vertical transmission of the virus from mother to child, deserve no blame for the actions of others.

  • 4 Tosakan // May 11, 2007 at 6:17 pm

    Jon-

    There is a pattern of the Thai government of using nationalism to foment hatred hatred towards foreigners usually for these reasons: 1. Distract from the incompetency of the government. 2. Blackmail foreigners into giving concessions. 3. Place blame on somebody other than the Thais.

    Here are the fact concerning Thai government/Aids drugs controversy.:

    1. Thailand is not a poor country. Whatever discrepancy in income between the rich and poor is the fault of the Thai government, not the US. The fact is that the Thai government, at any time, can raise taxes on its wealthiest and shift wealth to its poorest. The Thai government at any time can stop being corrupt and stop stealing resources from the Thai people.

    2. The Thai government purposely chose to have a universal health care system.

    3. When it purposely chose to have a universal health care system, it took on the responsibility to pay for it. At any time, it can raise taxes to pay for its health care industry and have the money to pay for its drugs.

    4. Thailand has a multi-billion dollar sex industry

    5. Thailand has done nothing to shut down its multi-billion dollar sex industry.

    6. Thailand has done nothing to tax its multi-billion dollar sex industry to pay for the health consequences of having such an industry.

    7. The Thai government wants US and French pharma companies to foot the medicine bill for the health consequences of its sex industry.

    8. Hiv/Aids is a preventable disease in most cases, with very few exceptions.

    It is universally known that unprotected sex with prostitutes and/or engaging in gay sex are considered risky sexual behaviors. We have known these facts for over 20 years. When giving blood, the Red Cross informs you of these facts.

    9. In terms of public health policy, Thailand has pursued an aggressive policy against cigarettes, alcohol and drugs, because, and this is one of many reasons, over concerns about public health. But when it comes to the sex industry, it has done nothing.

    10. The Thai Pharmaceutical Company that produces generics has not passed any international health inspection, has produced substandard generics that have put lives at risk, has used its office to make a profit, and hasn’t used those profits to invest in research and development in order to expand Thailand’s drug making capabalities.

    11. For some reason, the Thai government isn’t issuing compulsory licenses for the drugs other killer diseases linked to one’s own personal responsibility. Why not? Why attack a US pharma company and why over a political issue like Aids?

    Now, Jon, I have listed many of my unconvincing arguments.

    Please refute the facts, and try to do so without attacking the evils of US pharmaceutical companies and corporate capitalism.

    Please explain to me how the US pharma companies–regardless of how evil you think they are– are morally responsible for the immoral behavior and risky sexual behavior of Thais. And why do you think US corporations should subsidize a Thai health care system that the Thais are unwilling to pay for themselves through taxes, more investment in R and D, and improving their public health agencies that are responsible for preventing communicable diseases?

    Zheng Chao- I resent being accused of something I didn’t say.

    I never said that Hiv/Aids is “purely” a human behavior issue.

    But you can’t deny that human behavior is the main cause. It may not be politically correct to say it, but it is the truth. And anybody who thinks that Thailand’s wide open sex industry isn’t contributing to the Aids problem in Thailand is self-delusional. It is the pink elephant in the room nobody wants to acknowledge.

    And if people were more responsible about their sexual behavior, there probably would be more resources for those who are truly in need. Same goes for drinking, smoking, taking drugs.

    Personally, I have nothing against prostitution or sex, but I believe when people engage in risky behaviors concerning their own health they should be responsible for the consequences of those behaviors.

    If others want to argue that US pharm companies, because they are bad evil, should be responsible for subsidizing the health care system administered by a corrupt military junta that tolerates and profits from a multi-billion dollar sex industry, then go for it.

  • 5 Chut // May 12, 2007 at 1:03 am

    Here a some of their own “home” link: http://www.cptech.org/ip/health/cl/us-cr.html

    Another one in their backyard: http://www.cmaj.ca/cgi/reprint/167/7/765.pdf

    What about “Plavix”?

  • 6 Mike // May 12, 2007 at 11:12 pm

    There is a bit of ingnorance in thinkng this whole problem can be solved by monitoring the sex industry. It hardly addresses the half a million or so who now have the disease and need treatment (and this is what the argument is about).
    And to call the government’s argument nationalist? If a government follows it own laws (and producing generics of this drug is fully comaptible with current trade law) is this nationalism? I thought it was just what governments were supposed to do, and not obey every directive from America.
    Finally, this argument about US corporations subsidizing the Thai health system is simply a crock. The drug will make more than enough money back from its US and western europe markets, and if it doesn’t well the directors should be replaced because they’re not doing a good job. Why should the Thai market be contributing to the R&D budget of a US multinational who, face it, are going to spend most of their reserach money on rich country medicine, like heart disease, sex enhancers (or whatever you call viagra), or the cosmetic industry (and this is the biggest R&D section in pharmatecuetical).

  • 7 Vichai N // May 13, 2007 at 12:44 am

    I have a natural distrust of big monopolies (big oil, big pharma, big anything!) prompted more by gut sense than superior intellectual logic. Why must new drugs be always expensive? Suspicions suspicions and more suspicions.

    My gut sense (rather than evidence) suggests that Big Pharma would surely have rejected many ‘miracle drugs discoveries’ (from their powerful research )merely because this could NOT be patented and therefore cannot be gouged for profits.

    May I therefore be excused by reproducing Nobel economist Joe Stiglitz editorial piece below on this very subject?
    (source: http://www.bmj.com/cgi/content/full/333/7582/1279)

    ——————————
    Scrooge and intellectual property rights

    A medical prize fund could improve the financing of drug innovations

    At Christmas, we traditionally retell Dickens’s story of Scrooge, who cared more for money than for his fellow human beings. What would we think of a Scrooge who could cure diseases that blighted thousands of people’s lives but did not do so? Clearly, we would be horrified. But this has increasingly been happening in the name of economics, under the innocent sounding guise of “intellectual property rights.”

    Intellectual property differs from other property—restricting its use is inefficient as it costs nothing for another person to use it. Thomas Jefferson, America’s third president, put it more poetically than modern economists (who refer to “zero marginal costs” and “non-rivalrous consumption”) when he said that knowledge is like a candle, when one candle lights another it does not diminish from the light of the first. Using knowledge to help someone does not prevent that knowledge from helping others. Intellectual property rights, however, enable one person or company to have exclusive control of the use of a particular piece of knowledge, thereby creating monopoly power. Monopolies distort the economy. Restricting the use of medical knowledge not only affects economic efficiency, but also life itself.

    We tolerate such restrictions in the belief that they might spur innovation, balancing costs against benefits. But the costs of restrictions can outweigh the benefits. It is hard to see how the patent issued by the US government for the healing properties of turmeric, which had been known for hundreds of years, stimulated research. Had the patent been enforced in India, poor people who wanted to use this compound would have had to pay royalties to the United States.

    In 1995 the Uruguay round trade negotiations concluded in the establishment of the World Trade Organization, which imposed US style intellectual property rights around the world. These rights were intended to reduce access to generic medicines and they succeeded. As generic medicines cost a fraction of their brand name counterparts, billions could no longer afford the drugs they needed. For example, a year’s treatment with a generic cocktail of AIDS drugs might cost $130 (£65; {euro}170) compared with $10 000 for the brand name version.1 Billions of people living on $2-3 a day cannot afford $10 000, though they might be able to scrape together enough for the generic drugs. And matters are getting worse. New drug regimens recommended by the World Health Organization and second line defences that need to be used as resistance to standard treatments develops can cost much more.

    Developing countries paid a high price for this agreement. But what have they received in return? Drug companies spend more on advertising and marketing than on research, more on research on lifestyle drugs than on life saving drugs, and almost nothing on diseases that affect developing countries only. This is not surprising. Poor people cannot afford drugs, and drug companies make investments that yield the highest returns. The chief executive of Novartis, a drug company with a history of social responsibility, said “We have no model which would [meet] the need for new drugs in a sustainable way … You can’t expect for-profit organizations to do this on a large scale.”2

    Research needs money, but the current system results in limited funds being spent in the wrong way. For instance, the human genome project decoded the human genome within the target timeframe, but a few scientists managed to beat the project so they could patent genes related to breast cancer. The social value of gaining this knowledge slightly earlier was small, but the cost was enormous. Consequently the cost of testing for breast cancer vulnerability genes is high. In countries with no national health service many women with these genes will fail to be tested. In counties where governments will pay for these tests less money will be available for other public health needs.

    A medical prize fund provides an alternative. Such a fund would give large rewards for cures or vaccines for diseases like malaria that affect millions, and smaller rewards for drugs that are similar to existing ones, with perhaps slightly different side effects. The intellectual property would be available to generic drug companies. The power of competitive markets would ensure a wide distribution at the lowest possible price, unlike the current system, which uses monopoly power, with its high prices and limited usage.

    The prizes could be funded by governments in advanced industrial countries. For diseases that affect the developed world, governments are already paying as part of the health care they provide for their citizens. For diseases that affect developing countries, the funding could be part of development assistance. Money spent in this way might do as much to improve the wellbeing of people in the developing world—and even their productivity—as any other that they are given.

    The medical prize fund could be one of several ways to promote innovation in crucial diseases. The most important ideas that emerge from basic science have never been protected by patents and never should be. Most researchers are motivated by the desire to enhance understanding and help humankind. Of course money is needed, and governments must continue to provide money through research grants along with support for government research laboratories and research universities. The patent system would continue to play a part for applications for which no one offers a prize . The prize fund should complement these other methods of funding; it at least holds the promise that in the future more money will be spent on research than on advertising and marketing of drugs, and that research concentrates on diseases that matter. Importantly, the medical prize fund would ensure that we make the best possible use of whatever knowledge we acquire, rather than hoarding it and limiting usage to those who can afford it, as Scrooge might have done. It is a thought we should keep in mind this Christmas.3 4 5 6

    Joseph E Stiglitz, professor

    1 Columbia University, New York, NY 10025, USA

  • 8 anonymous // May 13, 2007 at 3:42 am

    Indeed, Vichai. If it were so easy and cheap to discover successful new drugs, I wonder why the Thai government hasn’t tried developing any? Thaksin was probably under the payroll of Big Pharma…

  • 9 nganadeeleg // May 13, 2007 at 10:25 am

    I had read the Stiglitz before but could not remember where – that was the point I have been trying to get across both here and over at Tosakan (Fonzi’s TJTS) site.
    Thanks for another excellent post, Vichai.

  • 10 Lleij Samuel Schwartz // May 22, 2007 at 12:07 am

    As I was eating dinner (ข้าวผัดไก่ – if you must know), I had the misfortune of having my wife watch the news in the next room. The TV screen was filled with the smiling, infantile mug of Dr. Mongkol na Songkhla. As a wave of emotions (most of them disgust) splashed about in my brain, I accidentially stumbled upon the perfect solution to this patent dilemma:

    As compensationfor the compulsory licensing of American produced HIV/AIDS drugs, the U.S. will ignore the Thai protectionist lobby and finally grow and patent Thai-strain Jasmine rice on U.S. soil.

    Free Fair trade, no? Goose and ganders, my friend, goose and ganders.

  • 11 New Mandala » Lowy seminar on Thailand's compulsary licensing // Jun 15, 2007 at 11:27 pm

    [...] The resulting outcomes report will be of interest to the many New Mandala readers who are following the controversy around Thailand’s recent health policy [...]

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