U.S., Brazil differ on aids drug patent at WTO

By JOHN ZAROCOSTAS, UPI Science News

The World Trade Organization agreed Thursday to review a complaint from the United States that a Brazilian law violates trade rules because it imposes a local production requirement in order for foreign patent holders to get protection for their patents.

The review decision drew criticism from the organization Doctors Without Borders (Médecins Sans Frontières or MSF), which says the U.S. challenge to Brazil’s law threatens the South American country’s policy on AIDS treatment, including a provision to give free drugs to citizens infected with HIV. It could also scare off others, MSN said, whom Brazil has offered to help produce AIDS drugs.

The WTO will set up a panel to review the U.S. complaint. The United States asserts that a 1996 Brazilian law unfairly imposes a "local working" requirement on the patent holder. The patent shall be subject to compulsory licensing if it is not "worked" in the territory of Brazil. The lawyer for the U.S. delegation at the WTO, Daniel Brinza, told a session of the trade organization’s Dispute Settlement Body that the Brazilian law discriminates between imported patented products and those made locally.

That is a violation of WTO rules known as the Trade-Related Aspects of Intellectual Property Rights, or TRIPS, Brinza said. The rules state that patents "shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced." They also state that the owner of a patent be given "exclusive rights ... to prevent third parties not having the owner’s consent from making, using, offering, selling or importing that product."

Brazil’s ambassador to the WTO, Celso Amorim, countered in a statement that "our legislation is fully consistent with the TRIPS agreement and the U.S. action amounts to a demand for commitments which go beyond the agreement through resort to dispute settlement procedures." Former foreign minister Amorim, who was chief negotiator during the Uruguay Round negotiations which crafted TRIPS, said the agreement "reflects a delicate balance that took developing countries to the limits of acceptability."

TRIPS allows for compulsory licensing of a patent without the authorization of the patent holder in cases of national emergency, extreme urgency, or to correct anti-competitive behavior. But it stipulates that patents may only be used in this way if efforts to obtain authorization from the patent owner on reasonable commercial terms fail.

The patent holder is to get adequate payment in each case. The global pharmaceutical industry and major industrial countries have argued that giving an importing country the right to license patented goods undermines the exclusivity of patents and adversely affects the incentive for attracting the huge investments needed for research and development. Supporters of Brazil’s law say it falls within the TRIPS exemption for goods involving a national emergency.

"We firmly believe that the United States has not given sufficiently careful consideration to the political implications of its decision, nor has it examined the many technical aspects of the case," Amorim said. In a statement in support for Brazil, MSF criticized the U.S. for "opposing Brazil’s system for granting compulsory licenses, a government’s right to override patents in certain circumstances. " Bernard Pécoul, MSF’s director for access to essential medicines campaign, said, " the lives of hundreds of thousands of patients depend on this (Brazil’s) system "

He said the U.S. action will also intimidate others which would like to take up Brazil’s offer to help them produce AIDS medicines. According to Doctors Without Borders, the Brazilian government currently is treating more than 90,000 patients either suffering from AIDS or infected with HIV with anti-retroviral, or ARV, therapy. The treatment, according to official data, has reduced deaths by 50 percent and saved the government more than $420 million in health-care costs from 1997 to 1999.

A key factor of the policy is the free distribution of ARV drugs, many of which are manufactured domestically by Brazilian companies. Brazil’s government has set up a pharmaceutical company that conducts research on producing generic versions of ARV and other kinds of AIDS medicines and transfers its findings to other companies that then produce the raw materials. The state-run firm then buys back the materials and manufactures the drugs.

(With additional reporting by Joseph Boris in Washington.)

Copyright 2001 by United Press International. All rights reserved.