Day 1 of WIPO PCDA 3, talking to the India Delegation

by Malini Aisola

On the first day of the 3rd session of the WIPO-PCDA negotiations in Geneva, I had the opportunity to interview officials from the Indian delegation and discuss the Indian government’s position on a variety of issues such as the development agenda and significant events potentially impacting India’s IP policy- the Novartis case, recent release of the controversial Mashelkar report and signing of a US-India Memorandum of Understanding (MOU).

India has been in the spotlight because of its initiative in hosting informal discussions in New Delhi about proposals contained in the “Manalo document” which was put out after the last WIPO General Assembly. A delegation official informed me that the various regional coordinators were invited to nominate three countries from their group to participate in the meeting that took place from February 5-7, 2007. Moreover, any country expressing a desire to participate was welcomed.

The objective of the meeting, attended by 22 countries representing all the regions, was to provide impetus to the PCDA process by consolidating the numerous proposals into a shorter list through general consensus and an informal, transparent process. Consequently, the 40 Annex A proposals were distilled down to a list of 22 proposals. The Indian delegate explained that at the end of the meeting some members still retained “qualifications and observations on these proposals but this provides a good way to examine them further. Let us see how member states proceed with it.”

The Indian delegation stressed the importance of moving forward with decision-making in a timely manner to avoid requests for further extensions on the period of negotiations.
Expressing frustration at the slow pace of negotiations since the adoption of a proposal for a development agenda, the Indian delegate stated, “it is imperative that the timeline is not eternal.”

It remains to be seen if this endeavor will bear any fruit and if any member will table the non-paper that is the outcome of the Delhi meeting, currently being circulated informally. In this regard, it is worth noting that on day one, a resolution was passed to format subsequent discussions on the basis of the Manalo working paper.

India has also received a lot of attention about Swiss pharmaceutical company, Novartis’ challenge of section 3(b) of the Indian Patent Act (2005) in the Chennai High Court. Novartis charges that this provision limits the scope of patentability in a way that is not TRIPS complaint and simultaneously violates Article 14 of the Indian constitution. The outcome of this case will determine the ability of Indian generic drug manufacturers to continue providing affordable medicines to patients in developing countries who are too poor to pay for patented drugs.

While a large international community is rallying against Novartis and demanding that the case be dropped, the Indian government has been charged with not taking strong enough measures to defend its patent act. Particularly conspicuous has been the absence of the Solicitor General of India during the presentation of arguments on February 15 and 16.

Speaking in a limited capacity as the Novartis case is sub judice, a representative of the Indian delegation responded that “there is no cause for concern and the Government of India is doing its job.” Further, he pointed out that the Additional Solicitor General, a local lawyer, was handling the case competently. Noting “that the Solicitor General is called upon only in cases when the constitution of India is challenged,” he stated the present position was that the Solicitor General’s constitutional expertise would be sought if the need arose in the future.

The current stance would be reassuring were it not for the fact that Novartis has hired a former Attorney General and a former law minister of India to appear on its behalf. Novartis certainly recognizes the implications this case has for access to medicines in India and the rest of the world, what will it take to shake India out of its complacence?

More bad news for generic drug companies recently came in the form of the Mashelkar report. In fact, Novartis has used this report’s recommendation in support of its case against the Indian patent law. Briefly, the government-appointed committee of IP experts headed by Mashelkar concluded that limiting the granting of patents for pharmaceuticals with new chemical entities (NCEs) or new molecular entities (NMEs) was a violation of the TRIPS agreement.

An Indian official confirmed that the Government of India has not taken any conclusive view on the report. “Given the sensitivity of the matter, it is fully within its rights to examine all the ramifications before accepting, partially accepting, or rejecting the report,” he said. The report was made immediately available on the government’s website and has since generated lots of public debate which in his opinion is facilitating and informing the government’s decision.

Hesitation on India’s part appears warranted considering the extent to which the report has been criticized by academics, industry and NGOs in India.

Yet, this is not the first time that India has been caught in an uncomfortable situation with Mashelkar.

Mashelkar chaired the Casablanca meeting in 2005. India issued statements distancing itself from the resolution that came out of that meeting, which undermined the position of many developing country delegates on the negotiations on a new WIPO substantive patent law treaty, a project that was put on hold at the recent WIPO General Assembly.

Finally, the Indian delegates commented on the US-India memorandum of understanding on bilateral cooperation for intellectual property and its effects on India’s position on IPR in a forum such as WIPO. I was informed “India has signed MOUs with the United Kingdom, France, European Patent Office and the US. India has taken a very very unambiguous position that no bilateral cooperation or agreement with any other government shall impinge on issues relating to policy, legislation or enforcement related issues which remain the prerogative of the Government of India.”

It was encouraging to learn that the areas of agreement are restricted the “soft issues” of capacity building, human resource development and public awareness programs in IP.

Debate on WIPO Development Agenda

by Malini Aisola

On February 9, 2007 KEI hosted a brownbag lunch discussion to talk about the WIPO Development Agenda (DA). The next round of negotiations will be held in Geneva the week of February 19-23. Invited to speak were several members of the US delegation, including Paul Salmon (USPTO), Bob Watts (US Department of State), Michael Shapiro (USPTO) and Marla Poor (Library of Congress); and DC WIPO representative, Suzanne Stoll. Thiru Balasubramaniam and Jamie Love from KEI also spoke, followed by a lively discussion between the audience and panel members.

KEI’s Geneva representative, Thiru Balasubramaniam presented some background on the DA, lending context to the discussions that followed. In 2004, the WIPO General Assembly agreed to consider the proposal to incorporate development into the core of WIPO’s activities in an effort to restore balance within existing IP policies. The original DA proposal supported by 14 countries called for the:

a. reappraisal of WIPO’s norm setting activities,
b. facilitation of technology transfer,
c. evaluation of intellectual property enforcement, and
d. promotion of development-oriented technical co-operation and assistance.

Subsequently, several more proposals were tabled by member countries culminating in a total of 111 submissions. No consensus was reached at the second inter-sessional intergovernmental meetings convened to examine the proposals. Further, at the General Assembly in September-October 2006, the Kyrgyz Republic introduced a proposal containing 40 recommendations (Doc PCDA/2/3) that were identical to the Chair’s conclusions that had been rejected at the second session. Following this, it was decided to devote the upcoming third session to the discussion of these 40 proposals grouped together under Annex A. These proposals are generally considered to be less controversial as they are relatively well accepted by members.

The remaining 71 proposals which include the core recommendations put forth by the Friends of Development constitute Annex B. Annex B is scheduled to be discussed at the fourth session in June.

Proposals in each Annex were grouped under six common clusters: 1) technical assistance and capacity building; 2) norm setting, flexibilities, public policy and public domain; 3) technology transfer, information and communication technology (ICT) and access to knowledge; 4) assessments, evaluation and impact studies; 5) institutional matters including mandate and governance and 6) other issues. According to Thiru, this division of proposals under vertical silos is viewed critically by some because of the separation of the proposals from their original contexts.

Speaking next as head of the US delegation, Paul Salmon confirmed that the US has indicated its position on all 111 proposals and has signaled its support on many of those included in Annex A.

Paul expressed optimism about the third session of the PCDA, saying that after two and a half years of discussions it presented a good opportunity to bring forward changes. Salmon suggested that the forum was important for achieving results with regards to proposals enjoying emerging consensus but at the same time cautioned about the slow pace such negotiations can take. The key is to be constructive about reaching consensus while also maintaining realistic expectations, he said.

Jamie Love of KEI commented that there had been progress on some issues, as reflected in some of the 40 proposals in Annex A that had received support from the US and the EC. He noted, however, that all but one of the Annex A proposals were those that had received support from either the US or EC, and that when the Annex was first proposed in 2006 at an earlier meeting, it was seen as an insulting and very minimal response to the Friends of Development proposals. Many of the more far reaching reform proposals were at first ignored, and now have been relegated to the Annex B, which will be discussed in June.

That said, the February meeting will be useful, as WIPO will agree that issues concerning the protection of the public domain will be part of WIPO's mission -- an issue that had been disputed in a 2003 debate over a WIPO meeting on open collaborative models for knowledge goods, and that WIPO will be doing more on the control of anticompetitive practices, Love said.

There was debate back and forth between Rob Weissman (Essential Action), Paul Salmon and Jamie Love about the degree to which WIPO has helped countries protect the poor on issues concerning flexibilities of the TRIPS. Paul Salmon was supportive of WIPO in this respect, while Rob and Jamie were more critical. There was also discussion of the need for more realism when it comes to enforcement. Developing countries would be more willing to enforce laws if the laws addressed obvious issues such as affordability of patented or copyrighted goods. Liberal limitations and exceptions to rights would in fact promote more respect for laws, in countries where incomes were low. Rob Weissman of Essential Action urged the US to play a stronger role in supporting improvements to WIPO’s technical assistance to countries on the use of flexibilities and competition policy.

There was a general discussion about the degree to which the US and European governments should pursue (a) very high levels of intellectual property protection, or (b) a more nuanced and balanced policy. According to Jamie, Germany was an example of a country that was pushing for very strong intellectual property norms at WIPO, at a time when many were questioning the wisdom of such an approach. The high rates of patenting in China and Korea suggest that 2017 might look a lot different from 2007, and some countries may be encouraged to embrace lower standards of patent quality (like the US), and use patents as protectionist measures. Neither the EC nor the United States, nor for that matter, any country, would benefit from such a race to the bottom, in the longer run.

Brad Biddle (Intel Corporation) also pointed out that as higher standards of IPR are implemented, corresponding limitations and exceptions will also have to be created. Giving the example of broadcasting, he explained that the economic value in creating these exceptions is well recognized by the industry. Matt Schruers of CCIA also advocated for finding a balance between creators’ rights and public access, noting that there was increasing consensus between creators and society on these issues.

Much of the wealth created in the United States in recent years has come from methods of sharing and using knowledge resources, rather than restrictive IPR regimes, Jamie said. Companies like Google, which are providing valuable services for the entire world and large profits for themselves, cannot operate as global services without some assurance that their core activities are legal. The EU experience with database protection has hurt the EU's domestic tech industry, not helped it, he said. Big corporations like Microsoft and Intel are now in favor of "patent reform" because they are the targets of patent litigation. The United States is now the largest purchaser of AIDS drugs in developing countries. There are indeed endless areas where US and European taxpayers are being asked to pay for drug purchases in developing countries. This is expensive and not sustainable unless you can deal with pricing abuses. The US was urged to abandon the strategy of framing issues in WIPO as "North South," and to use WIPO for serious debates about intellectual property norms and practices.

Paul Uhlir of the National Academy of Sciences also suggested several areas in which the US could take the lead in the international arena, including: promoting such features of its domestic IP policy as the low protection of federal government information that is placed in the public domain; the low statutory protection of databases; transparency in the national policy making and legislative processes; and the use of permissive licensing mechanisms such as the Creative Commons templates for providing voluntary, flexible private law alternatives to statutory IP law. [This paragraph edited Feb 19, 2007].

The US delegation provided answers to the many questions raised such as by Miriam Nisbet (American Library Association) about the PCDA process and Susan Sell (George Washington University) about the extent to which funding sources might constrain WIPO’s activities and policy. Following the open discussion among representatives of the government, academia, industry and consumer groups, many participants expressed interest in following the development agenda process. More updates from the next PCDA to come soon.

Dr. Margaret Chan to Dr. Mongkoi Na Songkhla regarding Thai CL

by James Packard Love

The following is the text of a February 7, 2007 letter sent by Dr. Margaret Chan, the DG of the World Health Organization, to Dr. Mongkol Na Songkhla, the Thailand Minister of Public Health. The letter is an apology for comments at a briefing at the Thai National Health Security Office, which led to newpaper reports in Thailand suggesting the WHO was critical of the Ministry of Health's recent decisions to issue compulsory licenses on three drugs. An image on the letter is available here (page 1, page2). Jamie

World Health Organization

20, Avenue Appia CH-12
GENEVA 27
SWITZERLAND
TEL CENTRAL +41 22 791 2111
FAX CENTRAL +41 22 791 3111

Tel direct: +41 22 791 2797
Fax direct: +41 22 791 4846

In reply please refer to: DGO

Mr. Mongkol Na Songkhla
Minister of Public Health
Ministry of Public Health
Royal Thai Government
Tivanond Road
Nonthaburi 11000
Thailand

7 February 2007

Dear Minister,

It was a pleasure to meet you last week in Bangkok, and I must express my deep appreciation to you and your staff for the warm welcome, hospitality and great efficiency demonstrated throughout my brief visit to Thailand.

It was a great honour for me to have an audience with His Majesty the King, and with her Royal Highness Princess Maha Chakri Sirindhorn, in her capacity as Chair of the Board of Trustees and President of the of the Prince Mahidol Award Foundation.

I was particularly impressed with the field visit, which provided me with an opportnity to witness the work of dedicated health professionals and the community in Khon Kaen and Nam Phong. The pride and professionalism of the staff and the support of the community was obvious and most encouraging.

I also appreciated the opportunity to hear mote about the work of the National Health Security Office and the National Health Promotion Foundation. I was pleased to witness the commitment of the Royal Thai government to universal coverage with effective health care services, and to the health of the people of Thailand. I welcome the increasing budget for the universal coverage scheme, which I know understand amounts to close to 2,000 baht per person per year, and includes treatment for people with HIV/AIDS with antiretrovirals.


Minister of Public Health, Thailand Page 2

I deeply regret that my comments at the close of the briefing at the National Health Security Office were misrepresented in the media, and may have cause embarrassment to the government of Thailand. They should not be taken as a criticism of the decision of the Royal Thai government to issue compulsory licences, which is entirely the prerogative of the government, and fully in line with the TRIPS agreement.

Thailand is making good progress towards increase [sic] budget allocations for health, while simultaneously control [sic] rising health care costs with greater efficiency. Medicines are a substantial element of health care costs, and it is entirely appropriate and necessary for the government of Thailand to find means of reducing these costs to ensure sustainable financing of health care.

As I mentioned in the recent Executive Board, I firmly believe that the pharmaceutical industry-generic manufacturers and R&D companies are part of the solution. I am committed to dialogue with industry to find ways of ensuring that access to high quality essential medicines is not limited by cost considerations. I am equally committed to dialogue with people who suffer from HIV/AIDS and other conditions, and with civil society groups and NGOs.

WHO unequivocally supports the use by developing countries of the flexibilities within the TRIPS agreement that ensure access to affordable, high quality drugs. This includes the use of compulsory licensing, as described in paragraph 6 of the Doha Declaration of the TRIPS Agreement and Public Health. The decision whether to issue a compulsory license for a pharmaceutical product is a national one. There is no requirement for countries to negotiate with patent holders before issuing a compulsory licence. As a global community we need to ensure the right balance between the immediate and urgent pressing need to provide affordable medicines to the many that need them, and the need for provide continuous incentives for innovation. It is in this regard that I noted that prior negotiations with industry is a pragmatic approach that may ensure countries have access to high quality medicines at affordable prices.

Where there are urgent needs, the bottom line is that people need access to medicines.

I trust this clarifies the position of WHO concerning compulsory licensing of medicines, and I look forward to further opportunities to discuss these important issues with you in the future.


Yours faithfully,

Dr. Margaret Chan
Director-General


cc: The Minister of Foreign Affairs of Thailand, Bangkok
Permanent Mission Thailand to the United Nations Office at Geneva and the Specialized Agencies in Switzerland

A deconstruction of Novartis's defense of its challenge to the India patent regime

by Brook Baker

A deconstruction of Novartis’s defense of its challenge to the India patent regime.

Brook K. Baker, Northeastern U. School of Law, Program on Human Rights and the Global Economy, Health GAP, February 7, 2007

Given the barrage of negative publicity that Novartis has received as a result of campaigns contesting its effort to overturn India’s strict new patent regime, Novartis has issued a three-page defense of its lawsuit. http://www.novartis.com/downloads/about-novartis/Novartis_position-Glivec_Gleevec_patent_case_india.pdf This defense contains some truths, numerous half truths, and several flat out lies:

Truth: Novartis seeks secure access to middle-income consumers via patent-based monopoly rights.

“In India, Novartis is faced with a globalization dilemma that characterizes many emerging economic powers today: two markets within one country. India has a booming middle class on one hand, and a vast number of extremely poor people on the other.

[W]e take affluent India seriously as a formidable power with all the rights and obligations that such status brings with it. As a consequence, we seek to establish effective protection for pharmaceutical innovation in India.”

Half-truths: Novartis does seek monopoly rights in the India market and it does compete with Indian companies, but it faces no realistic threat that patent-free Indian generics would be shipped to its patent-protected markets in North America, Europe and Japan.

“[I]t is clear that we seek business opportunities in India’s growing economy. We also compete with Indian companies globally in attractive markets, and the export of copies of our products into richer countries is a major concern to us.”

Rich countries have stringent border controls, drug registration procedures, and prescription practices that preclude import and sale of generic versions of patented medicines. If Novartis’s complaint were true, the U.S. would be flooded with cheaper generic versions of AIDS medicines (or even of Glivec which has been produced and sold at 1/10 the cost in India), but, of course, it is not.

Half-truth: For Novartis, patents are truly non-negotiable, but it is not true that the patent system is the best or only way of promoting research and development.

“Protecting innovation is the foundation for massive R&D investments made by the pharmaceuticals industry that are vital to medical progress. Companies can continue to bring improvements and innovations to patients and societies only with effective patent laws. For a research-based company such as Novartis, patents are not negotiable.”

The public sector, especially in the United States, contributes significant resources to the basic research that is the foundation of many pharmaceutical innovations. Moreover, under the patent regime, incentives for innovation are diverted from true social need towards block-buster drugs (sales over $1 billion a year) and me-too drugs (minor variations developed primarily to extent an existing patent monopoly or to gain market share from a competing block-buster drug). Similarly, patent-based monopoly rights divert pharmaceutical research away from preventative innovations, like vaccines, and towards every-day medicines for chronic diseases that primarily impact rich consumers in rich markets. As a consequence of this perverse set of patent-based incentives, there is very little research into the diseases that primarily affect poor people in the global south.

In addition, there are many viable alternatives to the existing patent-regime with respect to global public goods like medicines. Prize funds, research and development treaties, and more robust and targeted public investment in research are but a few of the proposals under discussion that could reduce or eliminate the bloated sales forces and supra-competitive profits that make drugs so expensive.

Half truth: Novartis now, belatedly supports one narrow set of TRIPS-compliant flexibilities for accessing cheaper medicines, but it is concurrently challenging another perfectly lawful flexibility, namely defining scope of patentability so as to prioritize public health and to increase access to medicines.

“Our case does not challenge provisions that provide for access under international trade agreements, specifically the TRIPS and the Doha Declaration. These flexibilities allow production for export under compulsory licenses that have been issued for public health reasons. They have been put in place to allow poor countries to safeguard access to medicines that do not have sufficient local production capacity. In fact, political agreement on the Doha flexibilities has been reached in order to mitigate impact of TRIPS implementation in India.

Novartis supports the TRIPS conditions that promote access for developing countries.”

Novartis confirms its new-found loyalty to one-narrowly defined TRIPS flexibility – compulsory licenses issued under the August 30, 2003, Paragraph 6 Implementation Decision. In this regard it is important to note that Novartis previously joined 38 other drug companies and trade associations in challenging South Africa’s completely lawful Medicines and Controlled Substance Act that would have permitted parallel importation. Maybe it now concedes the error of that 1998-2001 challenge to a lawful TRIPS flexibility, but even now it erroneously implies that compulsory licenses can only granted pursuant to the August 30 Decision.

But more importantly, Novartis’ lawsuit directly challenges another key TRIPS-compliant flexibility, namely the right to strictly define novelty, inventive step, and industrial applicability – the baseline standards of patentability – so as to exclude patents for minor variations of existing chemical entities, for new uses of know chemical entities, and for mere combinations of existing entities. Novartis and other drug companies want to impose the same loose standards of patentability for India and other developing countries that they have gained in the IP-crazed courts and legislature of the U.S. and Europe. There is in fact a great deal of variability of patent standards between countries, and India’s stricter definition is completely permissible under existing TRIPS standards.

Lie: The Mashelkar Committee report did not directly address, let alone hold, that certain provisions of the India Patent Act were non-compliant with TRIPS.

“Many of the points we have raised around India’s patent laws have been corroborated by the recent Mashelkar Committee report on patent issues in India. The Government-established Mashelkar Committee voiced its views in favor of incremental innovation and held that certain provisions of the Indian Patent Act are not compliant with international agreements, specifically WTO’s TRIPS agreement (Trade-related Aspects of Intellectual Property Rights).”

The Mashelkar Committee in India was tasked with determining “whether it would be TRIPS compatible to limit the grant of patent for pharmaceutical substances to new chemical entity or to new medical entity involving one or more inventive steps.” This definition would be even more restriction than the version of section 3(d) of the Act that Novartis is challenging. The only thing that the Mashelkar Committee actually said about the current India’s Patent Act is that “There is a perception that even the current provisions in the Patents Act could be held to be TRIPS non-compliant.” (¶5.11.) A “perception” is not a “holding.”

Lie: Research-based pharmaceutical companies like Novartis do not make their investment decisions based on monopoly marketing rights in developing country markets – which has been produced and sold at 1/10 the cost in India in rich country markets where their medicines enjoy even higher standards of intellectual property protection.

“Knowing we can rely on patents in India benefits government, industry and patients because research-based organizations will know if investing in the development of better medicines there is a viable long-term option.”

Many research-based drug companies are exploring and cementing strategic sub-licensing partnerships with Indian drug companies given their comparative cost advantages in manufacturing for global sales and given prospects for lower-cost clinical trials in India. However, drug companies make 90% of their global sales in the U.S., Canada, Europe, and Japan. India comprises only 1.3% of the global market. Does Novartis really want people to believe that its going to make fundamental investment decisions based on 1.3% of the global market instead of the 90%? It will set up shop in India in order to make even more profits in rich country markets not because of higher patent standards in India.

Donations are not an adequate defense: The best defense that Novartis mounts is that because poor people can’t afford its drug it gives much of it away in poor countries like India.

“In 2006, our access-to-medicines program reached 33.6 million patients. Novartis spent USD 755 million last year alone. ... The Glivec International Patient Assistance Program (GIPAP) is one of the most far-reaching patient assistance programs every implemented on a global scale. In India, 99% of patients who receive Glivec receive it free from Novartis [6,600 people].”

However, corporate donations are not a sustainable solution: (1) they are frequently hard to access, (2) they are revocable, (3) they are not offered across the broad spectrum of patented medicines that poor people need, and (4) they are designed primarily to forestall generic competition by removing market incentives.

Novartis’s efforts to sanitize its efforts to eviscerate the heart of India’s stringent patent regime are, in the end, indefensible. Its defense of its cancer-drug patent today will undermine access to medicines for HIV/AIDS, for heart disease, for diabetes, in fact for every new medicine needed by desperately poor people in developing countries. Charity does not hide avarice. By protecting its “fundamentals” – its non-negotiable patent-right aspirations – Novartis is revealing the cold and cruel logic of Big Pharma: profits over people; letting poor people die is less important than selling to middle-class Indians.

Pharma's Seven Deadly Lies about Thai Compulsory Licenses

by Brook Baker

Brook K. Baker, Health GAP
Feb. 1, 2007

As Thailand issues more TRIPS- and Thai-compliant compulsory licenses for AIDS and heart treatment, the drug industry is unleashing an ever more strident disinformation campaign.

Lies Number One and Two - Abbott: "We do not view [the compulsory license on Kaletra] legal or in the best interest of patients" says Melissa Brotz, spokeswoman for Abbott.

Truth: Thailand's compulsory license on Kaletra is lawful in every respect: (1) it is a fully TRIPS-compliant Article 31(b) license issued on valid public health grounds and for government, non-commercial use, which requires no advance negotiation with the patent holder; (2) it is fully complaint with Thai law which directly authorizes government, non-commercial use licenses without prior negotiation; and (3) it sets a royalty at .5% of the sale price.

Likewise, Thailand's compulsory license is in the best interest of both patients and the Thai government. Abbott has systematically refused to lower its middle-income discount price below $2200/patient/year despite multiple protests by AIDS patients and their advocates. Not only will Thailand and its patients be able to access Kaletra at half the cost of Abbott's firmly-held, best-and-last-offer price, but the costs of such medicines will undoubtedly fall as greater and more secure demand creates economies of scale for Indian and eventually Thai generic producers.

Lie Number Three - Teera Chakajnarodom, Thai Pharmaceutical Research and Manufacturers Association: "After the company does 10 years of research, and then suddenly the Thai government would like to impose the compulsory license, taking away their property, their assets."

Truth: Patents are not "property" in the traditional sense - they are government granted rights that are intended to balance the interests of innovators and the public at large, and which are granted by governments with many express and implied conditions, including the right to issue compulsory licenses. Governments around the world, including the United States, have issued thousands of compulsory licenses since the late nineteen century, including on pharmaceutical products. Moreover, Thailand had its compulsory license law on the books when all three companies, Merck, Abbott, and Sanofi-Aventis, filed their patent claims in Thailand. How exactly was a patent granted by government, but only subject to its rights to issue a compulsory license, suddenly transformed into an absolute right that is violated when a license is actually issued?

Lie Number Four - Teera Chakajnarodom, Thai Pharmaceutical Research and Manufacturers Association: "Everything is negotiable."

Truth: For monopoly-based drug companies, everything isn't negotiable. Abbott has flatly refused for nearly six months to lower its $2200/year mid-tier price for Kaletra. (It did so in Brazil only because of Brazil's drawn-out threat to issue its own compulsory license.) Moreover, even when negotiating deeper discount prices, drug companies frequently extract promises that countries will refrain from seeking other cheaper sources of supply. In this context, drug companies are mainly interested in preventing generic competition. Paradoxically, in pursuing the generic-freeze-out option, drug companies will occasionally give concessions to bigger middle-income countries that "make the market" - like Thailand and Brazil - even though they would not do so for smaller and poorer countries like Guatemala.

Lies Number Five and Six - Harvey Bale, International Federal of Pharmaceutical Manufacturers and Association: "Compulsory licensing cannot be a route to commercial abuse and can put patients at risk." Merck, Abbott, and Sanofi-Aventis also warn that overriding patents risks jeopardizing quality.

Truth: Monopolies and excessive pricing are not commercial abuse, but competition and lower prices are - go figure. For the hugely rich, R&D drug industry (more than 90% of the global pharmaceutical market) to complain about commercial abuse by generic producer (less than 10% of the global pharmaceutical market) is deeply ironic.

In terms of product quality, Bale roll outs out another old chestnut - "generics are inferior." He neglects to mention that multiple generic versions of efavirenz have received pre-qualification at the WHO. (Note: generic versions of Kaletra are still awaiting pre-qualification). Similarly, the U.S. FDA has approved dozens of India anti-retroviral products, producing them in some of the 70 FDA/GMP-approved pharmaceutical plants in India.

Lie Number Seven - all of the above, compulsory licenses will reduce incentives for innovation.

Truth: All of Asia (except Japan) and all of Africa comprise only 5.1% of the global pharmaceutical market according to Information Management Group. Even though low- and middle-income markets are growing faster that developed country markets, drug companies continue to make that vast bulk of their profits off of sales in the U.S., Canada, Europe, and Japan, which collectively buy nearly 89% of drugs by dollar volume. Drug companies always argue that compulsory licenses interfere with their R&D incentives, but they never admit that developing C.L.s never affect their monopoly profits in rich country markets. How can South and Southeast Asia's infinitesimal share of the global market really affect R&D incentive?

Journalists covering the Thai compulsory license stories should begin to ask real questions to drug company representatives instead of acting as PhRMA press agents by simply reproducing their patently false assertions. For balance, journalists should also at least occasionally present the countervailing and easily accessible fact-based refutations of PhRMA's misrepresentations.