Pharmaceutical patents and medical supplies for epidemical diseases: The struggle in less developed countries

Table of Contents

Abbreviations

Figures and Tables

1. Introduction

2. Pharmaceutical Patents and the Poor - The Point of Departure
2.1. Public Health and the Economy in LDCs
2.1.1. The Burden of Disease
2.1.2. The Economic Consequences of Poor Health
2.2. Intellectual Property Rights in Developing Countries
2.2.1 The TRIPS Agreement
2.2.2. Bilateral Trade Agreements

3. Patents and the Pharmaceutical Industry
3.1. The Economics of Pharmaceuticals
3.2. The Economics of Patents
3.3. Diffusion vs. Creation of Knowledge

4. Pharmaceutical Patents in LDCs
4.1. Static Effects
4.1.1. The Comparative Position of LDCs
4.1.2. Extent of Effects
4.2. Dynamic Effects
4.2.1. Domestic R&D Potential
4.2.2. Market Size
4.2.2.1. Global Diseases
4.2.2.2. Diseases of the Poor
4.2.2.3. Tropical Diseases
4.3. The curse of poverty

5. The Road Ahead
5.1. Price Discrimination
5.1.1. The Theoretical Framework
5.1.2. The Political Dimension of Differential Pricing
5.2. Public Intervention and the Role of Rich Countries
5.2.1. Modified Orphan Drug Acts
5.2.2. The Purchase Fund
5.2.3. Public-Private Partnerships (PPPs)
5.3. The Politics of Pharmaceutical Development Aid
5.4. Compulsory Licenses: The Option of Last Resort?

6. Conclusion

Literature

Abbreviations

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Figures and Tables

Figure 1 Patents as Temporary Monopolies

Figure 2 The Welfare Effects of Intellectual Property Rights

Figure 3 Price Discrimination Between Rich and Poor Countries

Table 1 Life Expectancy and Mortality Rates for Selected Regions (2000)

Table 2 Selected Less Developed Countries' Membership in Multilateral, Regional and Bilateral IPR Treaties (2001)

Table 3 R&D Expenditures as Percentage of Revenues for Selected Pharmaceutical Companies

Table 4 Patent Applications in Selected Countries (2000)

Table 5 The World Pharmaceutical Market

Table 6 Diseases for which 99% or more of the Global Burden falls on Low- and Middle-Income Countries (2000)

Table 7 Health Expenditures for Selected Regions and Prevalence of HIV/AIDS

1. Introduction

The last century has been characterized by great advancements of pharmaceuticals and a worldwide rise of life expectancy. Improvements in medical research have yielded significant progress in treating diseases that only recently were incurable. This is most obvious in the case of HIV/AIDS where considerable public and private investments have converted this killer into a manageable chronic disorder for many in the developed world. Still, the developing world has suffered an exponentially growing rate of HIV infection and treatment is out of reach for almost 90 percent of the infected population. Tragically, AIDS is not the only pandemic¹ threatening the developing world. Malaria and Tuberculosis are only the most prominent of a large number of epidemical diseases affecting the world’s poor. Overall, about ten million people die through infectious diseases each year, more than 90 percent of whom in the developing world. These people do not receive treatment for their diseases - either because they cannot afford treatment or because treatment for their diseases does not exist.

Major multilateral organizations, such as the World Health Organization (WHO), have devoted substantial expertise and financial means to the development and distribution of medicines. These medicines were targeted specifically at the needs of less developed countries (LDCs). Publicly, however, the issue only gained significant momentum with the establishment of the World Trade Organization (WTO) in 1995. Indeed, the inclusion of intellectual property rights (IPRs) in form of the Agreement on Trade Related aspects of Intellectual Property Rights (TRIPS) and the simultaneous spread of the HIV/AIDS pandemic became one of the major fields of discussion and public outrage at the WTO Ministerial Conference in Seattle in 1999. On the one side, governments and industries from developed countries, argued that the introduction of patent systems in LDCs would result in a considerable flowering of innovation and growth, with significant spillovers to poor countries. In fact, concerning pharmaceuticals, they claimed that the introduction of patents could help in accelerating the process of finding treatments for currently incurable diseases such as malaria and leprosies. On the other side, developing countries and many non governmental organizations (NGOs) feared that the introduction of IPR systems in developing countries would result in higher prices for pharmaceuticals (and other goods incorporating intellectual property). Considering the low purchasing power and the high incidence of diseases, it was feared that this would worsen the already disastrous situation of public health in LDCs. This conflict is at the center of the harsh debate about institutional reform in the WTO and is the subject to be discussed in this study. The aim of this paper is to clarify the interrelation between patents and access to pharmaceuticals in developing countries and to describe possible solutions to this public health dilemma. Actually, the improvement of health standards in developing countries cannot be achieved solely by the provision of pharmaceuticals in terms of vaccines and medical treatment. Other factors, such as prophylactic measures including hygiene, education and better medical infrastructure are all important factors and, complementary to the provision of medicines. However, these measures are not discussed in this paper as their relation with patents is rather marginal.

Regarding the provision of pharmaceuticals to people in developing countries, there are two distinct issues which need separate consideration though they are related. One is the issue of medical research, and the extent to which current mechanisms for stimulating and funding medical research are appropriate to spur the development of new medicines. The other is the issue of access to the products of medical research. As will be seen, these two crucial aspects have important implications for any policy approaches dealing with the health situation in LDCs.

In order to put the discussion into perspective, the following chapter discusses the current situation of public health in LDCs and its problematic economic and social consequences. The situation is then confronted with the current state of intellectual property rights in international law. In this regard the TRIPS Agreement and its various provisions regarding developing countries are of central importance. Chapter 3 introduces the functioning and the theoretical justification of patents. For this purpose the economics of the production of pharmaceuticals are analyzed. It will be shown how certain characteristics of pharmaceuticals and their production process make a political intervention necessary. The granting of patents proves to be crucial for a sufficient provision of pharmaceuticals to society. As this policy instrument also causes social costs, the trade off between these costs and benefits is analyzed. Building on this framework, chapter 4 examines the potential effects of an international adoption of (TRIPS like) patents on the availability of drugs in LDCs. This analysis leads to certain conclusions, which form the foundation of the possible solutions to the dilemma presented in chapter 5. Chapter 6 concludes this study.

2. Pharmaceutical Patents and the Poor - The Point of Departure

The question of whether the introduction of pharmaceutical patents in developing countries represents a necessary instrument to foster innovation or rather a “heartless exploitation of the poor and suffering” (Lanjouw 1998) has been discussed quite emotionally in the public. In order not to be mislead by any of these emotional and eloquent arguments this chapter introduces the facts on which the rest of this study builds upon. Firstly, an overview of the situation of public health in LDCs is provided. After a description of the situation and a brief discussion about the economic consequences of poor public health, the situation will be confronted with the “legal globalization” of intellectual property rights.

2.1. Public Health and the Economy in LDCs

2.1.1. The Burden of Disease

The last century has been characterized by worldwide improvements in public health and life expectancy. Through the increase of daily calorie intake, advances in medical technology, and especially targeted immunization campaigns² less developed countries have been able to actively be part of this development. This is most evident considering the impressive improvements in life expectancy in developing countries, which has increased by 22 years between 1960 and 1995 (WHO 2001, p. 40). Still, enormous differences in health status and life expectancy between rich and poor countries prevail, with sub-Saharan Africa and South Asia

Table 1 Life Expectancy and Mortality Rates for Selected Regions (2000)

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Sources: World Bank 2003, World Health Organization 2002.

suffering under the highest burden of disease. In fact, as shown in Table 1, life expectancy in sub-Saharan Africa is merely 46 years, compared to 78 years in developed countries. Also, under-five mortality rate is more than ten times higher in developing countries than in high-income countries.

It is apparent that the peoples of Africa by far suffer under the worst health conditions in the world. Indeed, in 1998 the peoples of Africa, accounting for 10 percent of the world’s population, suffered a disproportionately high disease burden of 25 percent of the world’s total, measured in terms of disease-adjusted life years³ (DALYs) lost (Kettler and Collins 2002, p. 17). 68 percent of the DALYs lost were caused by communicable diseases, such as HIV/AIDS, malaria, tuberculosis (TB) and childhood infectious diseases. Though health conditions, independently of the measure used, are worst in sub-Saharan Africa the situation is quite dramatic also in the rest of the developing world. Overall, the WHO (2001, p. 40) estimates that 13.3 million people died of infectious diseases in 1998 - the great majority of them in LDCs. Tragically, the WHO further reckons that many of these deaths could have been prevented if necessary treatment was available.

Technical progress in the medical and pharmaceutical sector plays a major role in alleviating this tragic situation. Jamison, Sandbu and Wang (2001) attribute 74 percent of the worldwide decline in infant mortality rates over the period from 1962 to 1987 to technical progress. Other factors such as better education and increased income are also important, though they are thought to play a minor role. Technical progress in the pharmaceutical sector means, for the most part, the development of new and the improvement of existing medicines.

However, the benefits of drugs can only arise if patients are actually provided with access to appropriate drugs. As the numbers above indicate, in many countries this is not the case. The reasons for this can be divided into two distinctly different categories. In the first case, diseases would actually be treatable by technical means. But, the necessary money to establish effective health services and purchase the medicines is not available to the country or patient. In the second case, no effective treatment has yet been developed and thus, in the short run, money alone would not be sufficient to alleviate the situation. This, however, is rather different in the long run. As will become clear in chapter 3, the distinction between these two categories is very important for understanding the relationship between patents and access to pharmaceuticals.

A third of all deaths due to epidemical diseases in LDCs are thought to belong to the first category of diseases, i.e. the condition could actually be prevented or treated by the current standard of technology but a lack of financial means and/or medical infrastructure prevents effective treatment (WHO 2002, p. 17). The most prominent example for such “preventable deaths” is the case of HIV/AIDS, which has been responsible for an estimated 3 million deaths in 2001, 2.3 million of which occurring in sub-Saharan Africa (WHO 2001, p.47). Although treatment with antiretrovirals (ARVs) has turned HIV/AIDS into a manageable chronic disease in most western countries, the great majority of infected people lives in developing countries and lacks access to such treatment⁴. Similarly, though on a smaller scale, measles are a major killer in developing countries, causing 800,000 victims in 1998 (WHO 2001, p. 44), while vaccines and effective treatment are almost ubiquitous in developed countries.

The second category of diseases comprises conditions deemed untreatable with currently available medicines. Also, diseases for which treatment is available in developed countries, but is inadequate to the conditions in LDCs⁵ are included in this category. In most cases such diseases are confined to developing countries, mostly in tropical regions. In fact, as a consequence of their geographic and climatic characteristics tropical regions are especially affected by diseases (see Landes 1998, pp. 23-31). The most prominent of these diseases is malaria⁶, causing between one and two million deaths annually (CIPR 2002, p. 13). Also, tuberculosis (TB), affecting predominantly AIDS patients whose immune system is not able to resist the disease, causes nearly 1.7 million deaths a year worldwide. It is expected to cause 10.2 million victims by 2005. Although some treatment for TB exists in rich countries most strains affecting developing countries have acquired drug resistance and are therefore practically incurable until new drugs are developed (WHO 2002, p. 163). Also, for the African sleeping sickness (trypanosomiasis) with 66,000 and leishmaniasis with about 57,000 victims a year, treatment has yet to be developed (WHO 2001, p.80). Mostly, the main constraint to the development of new medicines tackling the diseases of this category is not of technical nature but a consequence of the low investments in research and development (R&D) for drugs curing such diseases. Indeed, Médecins Sans Frontières (2001) estimate that in 2000 research expenditures on drugs against malaria, TB, African trypanosomiasis and leishmaniasis combined was less that US$ 100 million. In contrast, in the same year public expenditure for cancer research was US$ 3.1 billion in the USA alone. The reasons for such enormous differences in research expenditures will be discussed in more detail in chapter 4.

2.1.2. The Economic Consequences of Poor Health

Overall, it is obvious that the precarious situation of public health in developing countries described above is not only an issue of concern for ethical and moral reasons. Poor public health is associated with poverty and weak prospects for economic growth. Poverty and disease thus mutually reinforce a situation, which is extremely difficult to escape.

On the one hand, health is at the basis for long term economic growth. The Nobel Laureate Amartya Sen (1999, chapter 1) has worked extensively on the role of health, not only as a basic human right, but as a fundamental contributor to economic growth⁷. He notes that health is the basis for job productivity and the capacity to learn. Therefore it has strong implications on the formation of human capital - a major contributor to economic growth. Additionally, diseases significantly affect other economic variables such as labor supply and the savings rate (Eberstadt 2002, p.38). Apart from this direct influence on economic variables, public health has also more subtle implications for the long term growth prospects of afflicted countries through the effects on social structures. For example, recent studies about the AIDS pandemic stress the social problems arising from the extremely high share of AIDS orphans in many African societies. Zambia, where almost 12 percent of children are AIDS orphans, is a case in point. Violent crimes and prostitution are often associated with these orphans, contributing to the instability in the country and depressing growth prospects (The Economist 2003a, p.89).

On the other hand, low economic growth and low income are among the main causes of a high burden of disease. Poverty is associated with low standards of infrastructure to deliver basic health care, poor standards of education and hygiene and, most importantly in the context of this paper, low purchasing power to obtain medicines.

Hence, poor countries are victims of a vicious circle between poverty, disastrous public health and, therefore, bleak prospects for economic growth. This relationship is affirmed by several empirical studies, which find a strong mutually reinforcing correlation between public health and economic growth (see e.g. Barro 1997 and Bloom, Canning and Sevilla 2001). As expected, the relationship between health and economic performance has been found to be especially strong in tropical regions, where diseases such as malaria have exceptionally strong adverse effects on economic performance (Gallup and Sachs 1999 and 2000).

Independently of whether one sees poor public health as consequence or cause of poverty, it is obvious that poor health and poverty are strongly related. It is a fact that developing countries spend the least on health in absolute (though not necessarily relative) terms and thus are seriously constrained in buying pharmaceuticals. This seriously worsens their overall health status measured in terms of life expectancy and burden of disease.

2.2. Intellectual Property Rights in Developing Countries

Intellectual property rights legislations are not new in developing countries. National IPR legislation and, specifically, patent laws for pharmaceuticals have been in force in many countries worldwide (including LDCs) for over a century. Such laws were anchored in international IPR treaties, most of them administered by the World Intellectual Property Organization (WIPO)⁸. Also, many developing countries had founded their own regional IPR agreements such as the Organisation Africaine de la Propriété Intellectuelle (OAPI) instituted by 15 members of Francophone West Africa in 1977 and the African Regional Industrial Property Organization (ARIPO) established by the 15 Anglophone African countries in 1984. Both permitted the patenting of pharmaceutical products (Attaran and Gillespie-White 2001, p. 1889). Still, none of these international agreements had a binding set of standards and effective enforcing mechanisms. As a consequence, while in the early 1990’s the great majority of developed economies allowed and enforced the patenting of pharmaceutical products and production processes, almost 50 developing countries did not allow the patenting of pharmaceuticals in their legislation (Lanjouw 1998, p. 1). These differences in patent legislation and enforcement, not only for pharmaceuticals but for a wide range of other products, became a source of growing tensions in international economic relations while the importance of intellectual property (IP) in international trade grew steadily.

At the Uruguay Round Negotiations two distinctly different positions concerning IPRs emerged. On the one side countries such as the EU and the USA claimed large losses form the imitation and use of their innovations in LDCs. Not surprisingly, these countries all have a strong comparative advantage in goods embodying IP, such as IT products, measuring and controlling instruments, recorded disks and tapes, and pharmaceuticals. They argued that the introduction of IPRs, would not only be in their own interest but that IPR enforcement could also foster development in LDCs through encouraging effects on foreign direct investment (FDI), technology transfer and greater domestic research and development (R&D). On the other hand, developing countries with a competitive disadvantage in goods embodying IP were concerned about access to these goods if the rights of patent holders were to be enhanced. Most (though not all) of these countries did not believe that positive growth effects caused by stronger IPRs could outweigh the effects of reduced access to goods incorporating IP. Ultimately, due mainly to strong pressures by the United States⁹ and the European Union, IPRs have been included into the WTO in form of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The extremely powerful enforcing mechanism of the WTO has now led to IPRs actually being introduced in all member countries.

Among economists, however, the controversy concerning the TRIPS Agreement, viewed by many as the beginning of an inclusion of non-trade items in the agenda of the WTO, was far from solved. Most eloquently, Jagdish Bhagwati (cited in Panagariya 1999, p. 2) has described the WTO as a three legged tripod whose third leg, namely TRIPS, is shorter than the other two, GATT and GATS. Professor Bhagwati fears that from this third leg other shorter legs in the form of labor and environmental standards might grow, threatening to turn the tripod into a centipede, slowing down considerably the overall forward movement of the WTO. Equally critical, but with another connotation, Joseph Stiglitz (2001, p 136) views the TRIPS Agreement as an “efficiency reducing” and “redistributive exercise” at the expense of developing countries. These arguments have been taken over in the public discussion, which started with the Ministerial Conference in Seattle in 1999.

Thereafter, public opinion and awareness were raised most notably when thirty- nine pharmaceutical companies brought a case against the Government of South Africa, challenging the provisions of the Medicines and Related Substances Control Amendment Act. Shortly after, the United States initiated a dispute settlement case¹⁰ against Brazil at the WTO for similar reasons¹¹. Although both cases were dropped, public awareness about the issue remained high. This lead to an official clarification of the issue at the WTO Ministerial Conference in Doha, Qatar in form of the Ministerial Declaration on TRIPS and Public Health¹² adopted on 14 November 2001. The following part gives an overview of the provisions concerning pharmaceuticals in the TRIPS Agreement in connection with the Doha Declaration¹³. There are various exemptions to these provisions, which will be discussed in more detail in chapter 5.

2.2.1 The TRIPS Agreement

The TRIPS Agreement is an integral Part of the WTO, defining the minimum standards of protection for various forms of intellectual property rights. These rights include copyrights, layout designs of integrated circuits, geographical origin indications, trademarks, industrial designs and - most importantly regarding pharmaceuticals - patents. All provisions of TRIPS are binding for all member states and all relevant regulations are subject to the basic WTO principles of “national treatment” and “most favored nation treatment”¹⁴. TRIPS came into force on 1 January 1996 and by then all developed country Members had to have adapted their national laws accordingly. Developing Countries were left a transition period until 1 January 2005. An extension of this transition period for LDCs until 1 January 2016¹⁵ was included in the Doha Declaration.

Patents, the most important form of IPR used by the pharmaceutical industry, have been defined by the WTO (2001) as state granted temporary monopolies, valid for a period of 20 years, awarded to persons or institutions that have discovered information with some commercial or artistic usefulness. Moreover, this information has to be both “novel” and “non-obvious” (Grimwade 1996, p. 310). During the validity period of the patent the patent owner can obtain reimbursement from anyone who makes, uses, sells or imports the product or process that is covered by the patent claims. The major TRIPS provision regarding patents can be found in Article 27, which demands that

“Patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step, and are capable of industrial application.”

Undoubtedly this includes pharmaceuticals, which therefore have to be patentable in all WTO member countries. However, TRIPS explicitly acknowledges the necessity of considering the public interest, and especially public health, in formulating domestic IP regulations. Indeed article 27:2 states that

“Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.”

Regarding public health, the most controversial area in the discussion about the TRIPS Agreement, Paragraph 4 of the Doha Declaration specifically emphasizes that “We agree that the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members' right to protect public health and, in particular, to promote access to medicines for all.”

Countries are therefore able to respond to public health crises (which they are allowed to define themselves) by temporarily overriding TRIPS provisions. Most importantly, countries can make use of compulsory licenses for pharmaceuticals. This means that, under certain conditions, countries can issue licenses to produce a certain medicine even without the consent of the patent owner. This option will be discussed in more detail in chapter 5.

2.2.2. Bilateral Trade Agreements

In addition to TRIPS, numerous regional trade and investment agreements, such as the North American Free Trade Agreement¹⁶ (NAFTA) and bilateral accords between the European Union and countries in the Middle East and North Africa, have protection of intellectual Property Rights at their core. Many of these treaties involve developing countries and include provisions concerning pharmaceutical patents. It has been observed that such bilateral treaties often contain provisions on IPRs which are more severe than TRIPS by demanding higher minimum standards or eliminating options or exemptions allowed in TRIPS (see e.g. Drahos 2001). Though it remains to be seen if pharmaceutical companies and their governments will actually demand enforcement of such higher standards, termed TRIPS Plus, LDCs are undoubtedly under pressure. Table 2 gives an overview of selected LDCs’ membership in some of the major multilateral, regional and bilateral IPR agreements. Some of these IPR treaties, most notably the bilateral agreements with the USA, might indeed restrict developing countries ability to make full use of TRIPS provisions. In fact, it is apparent that the USA has devoted substantial efforts to the establishment of such treaties even after the establishment of TRIPS.

Table 2 Selected Less Developed Countries' Membership in Multilateral, Regional and Bilateral IPR Treaties (2001)

illustration not visible in this excerpt

Sources: Drahos 2002, pp. 50-51, Lesti and Pengelli 2002, pp. 44-45.

On the one hand the USA might - as the United States Trade Representative (USTR) claims - engage in bilateral pressures simply to speed up processes within the WTO (Zoellnick 2002, p 45). On the other hand, it is, to say the least, quite feasible that the US have not been fully satisfied with the outcome of the TRIPS Agreement and might try to enact stronger IPR standards bilaterally. This paper will, however, not enquire more deeply into this discussion. Still, one should keep in mind that the TRIPS Agreement is not the only legal framework for IPRs in developing countries.

3. Patents and the Pharmaceutical Industry

Building on the situation depicted above, this chapter analyzes the relationship between pharmaceutical innovations and IPRs. As stated in chapter 2, much of the increases in life expectancy and decline in the burden of disease experienced worldwide over the course of the last century have been achieved thanks to technological advancements in the pharmaceutical industry. These innovations are closely linked to IPRs.

Indeed, pharmaceuticals belong to the group of knowledge goods and as such have certain characteristics of public goods, which make the provision of medicines prone to free-rider problems and, ultimately, market failure. To overcome these problems IPRs have been introduced in many countries over the course of the last century. In this, IPRs differ substantially from property rights for physical goods, since they have not been derived directly from natural rights, but have been introduced following a political rationale. Consequently, while there is little dispute over the question of whether the products that embody a certain kind of information (physical goods) should be assigned property rights, the case for assigning property rights to the knowledge embodied in the product is less obvious. Discussing this very interesting legal and philosophical question however is beyond the scope of this paper. This study takes a utilitarian point of view, understanding the granting of patent rights as merely an instrument of public policy designed to achieve a socially optimal outcome. Similarly, the Commission on Intellectual Property Rights (2002, p. 6) defines IPRs as “instruments of public policy […] which confer economic privileges on individuals or institutions solely for the purpose of contributing to the greater public good. The privilege is therefore a means to an end, not an end in itself.” In line with this argument, the following part will first analyze the characteristics of pharmaceuticals, which make such a political intervention necessary and then discuss the functioning of patents. The framework introduced in this chapter will then be used subsequently in chapter 4 to analyze the effects of patents on the availability of pharmaceuticals in LDCs.

3.1. The Economics of Pharmaceuticals

By its very nature the development of new pharmaceuticals is exceptionally capital intensive. The development of new drugs consists of a long process ranging from first tests of new compounds through various stages of laboratory and clinical testing. Indeed, it is estimated that until finally regulatory approval is obtained more than ten years have passed on average (Correa 2001a, p. 7).

[...]

¹ Pandemics refer to diseases, mostly of infectious nature, that travel across borders.

² It is estimated that through the joint efforts of the WHO and various other donor agencies for the first time in history 70 percent of infants worldwide received the three-dose DTP (diphtheria, tetanus and pertussis) vaccine in 1999. This alone is estimated to save three million lives a year (Kremer 2002, p. 68).

³ DALY is the standard measure used by the WHO for comparing health risks. One DALY equals to the loss of one healthy life year.

⁴ It is important to note that the HI virus mutates constantly and develops resistance against certain treatments. Although many infected people in developing countries could be treated with existing ARVs some strains of the virus, which are prominent in the developing world, are currently not curable with existing ARVs. These strains rather belong to the second category of diseases.

⁵ For example highly perishable drugs can be a problem in developing countries due to a lack of continuous cold chains and cooling facilities.

⁶ Apart from the treatment with medicines it should be noted that prophylaxis, such as the provision of clean water and the use of bednets and insect repellents, play an important role in fighting malaria.

⁷ Also see Landes (1998) and Diamond (1996) for more comprehensive discussions on the role of health in the process of economic development.

⁸ The major treaties governed by the WIPO are the Paris Convention (1883) for the protection of industrial property and the Berne Convention (1886) for the protection of artistic and literary property.

⁹ In this regard, especially America’s aggressive use of Section 301 of the US Trade Act has been widely published (see e.g. Drahos 2002).

¹⁰ WT/DS199/1

¹¹ See Shanker (2002) for a comprehensive discussion about the Brazilian policy approach to medicines and IPR protection.

¹² WT/MIN(01)/DEC/2

¹³ As the Doha Declaration has not yet been subject to any disputes it remains to be seen how the provisions will be interpreted exactly. The discussion about the Doha Declaration in this paper is based on the interpretations of the Declaration by Abbott (2002a), ‘T Hoen (2002), Vandoren and Van Eeckhaute (2003) and Correa (2004).

¹⁴ National treatment demands that nationals of other participating states may not be treated less favorably in domestic protection and enforcement of IP legislation. Most favored nation demands that any advantage conferred to one member country must be extended to all other member countries.

¹⁵ During the transition period developing countries are required to establish mechanisms for receiving and preserving priority in regard to patent applications and to allowing the grant of exclusive distribution rights when prescribed conditions are satisfied (Abbott 2002b, p. 12).

¹⁶ Chapter 17 of NAFTA commits all three members to standards of protection that are in some cases considerably stronger than those in TRIPS (Maskus 1997, p. 688).