It takes a lot of courage to defy the folks who make tens of billions a year selling drugs. We will find out soon whether President Obama has the backbone to stand up to Merck, Pfizer and the other major drug companies in order to protect the health and lives of hundreds of millions of people living in the world’s poorest countries.
The immediate issue is an extension of the period until the poorest countries must adopt US-type patent protections for drugs under the World Trade Organizations (WTO) rules. In 1994, the Clinton administration inserted the trade related trade aspects of intellectual property rights, or TRIPS, provisions into the agreement that established the WTO. The TRIPS provisions effectively required all WTO members to adopt US-type patent and copyright laws.
This would imply an enormous increase in the price of many items, especially drugs, which had been readily available in the developing world at the free market price. Generic versions of drugs are generally cheap, since it is rarely expensive to manufacture and distribute drugs. When we see drugs selling for tens of thousands or even hundreds of thousands of dollars it is almost always because a drug company holds a government-granted patent monopoly on its sale.
President Clinton added the TRIPS provisions to the WTO, after years of negotiations, at the urging of the pharmaceutical and entertainment industries. By imposing US-type patent and copyright protections they would be able to extract more profits from the developing world. However harmful this policy might be to developing countries, they had little choice unless they wanted to be left out of the WTO.