From poverty to power - Oxfam-Québec

FROM POVERTY TO POWERThe vast majority of people in developing countries have to buytheir own medicines. For example, in India over three-quarters of allspending on health services is out of pocket, of which 75 per cent isspent on medicines. 69 People in the developing world are thus acutelyvulnerable to high prices.Pharmaceutical giants spend considerable amounts of moneytrying to delay the introduction of off-patent generic versions ofmedicines for as long as possible, and TRIPS rules are a vital part oftheir armoury in this effort. The gap between the prices of patentedand generic medicines is large, for a variety of reasons: R&D costs arehigh, relative to other industries, and the costs of copying a medicineare usually very low; companies pursue very different business models,with producers of patented medicines investing massively in advertising,absorbing the cost in high prices, while generics concentrate on highvolume and low costs. As long as they can retain a monopoly, pharmaceuticalcompanies know that desperate people will pay whatever theycan for the medicines that can keep them alive: it is the epitome of asellers’ market.Prior to the creation of the WTO, some 50 developing countrieseither excluded medicines from eligibility for product patents, orprovided shorter periods of protection and other safeguards. 70 Thanksto flexible IP regimes, India became known as the ‘pharmacy of thedeveloping world’, manufacturing most of the world’s generic medicinesand exporting them to poorer developing countries. Since 2001, forexample, competition among Indian generics producers has drivendown the cost of first-line antiretroviral medicines from $10,000per patient per year to the current level of less than $100 per patientper year.Although the poorest countries have a grace period until 2016,most of them do not have manufacturing capacity and therefore haveno means of producing generic medicines for their populations. Thedamage is most severe in the case of ‘new diseases’ such as HIV andAIDS, and other diseases with rising incidences such as cancer andasthma, which require new generations of drugs, all of which areunder patent. In fact, access to these medicines has already beencurtailed because the world’s major producers of generic, low-costmedicines were obliged to implement the TRIPS agreement by 2005.328