access to medicines brics alliance

8/11/2019 Access to Medicines BRICS ALliance

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ACCESS TO MEDICINES, BRICS ALLIANCES,AND COLLECTIVE ACTION

Peter K. Yu *

Introduction ..................................................................................................................................... 1I. Meet the BRICS .................................................................................................................. 4A. Brazil ....................................................................................................................... 5B. India ........................................................................................................................ 6C. China ....................................................................................................................... 7D. Russia ...................................................................................................................... 9E. South Africa .......................................................................................................... 10F. Summary ............................................................................................................... 11

II. The BRICS Coalition ........................................................................................................ 12III. Partial BRICS Alliances ................................................................................................... 15IV. Coordination Strategies ..................................................................................................... 22

A. South-South Alliances .......................................................................................... 23B. North-South Cooperation ...................................................................................... 26C. The WTO Dispute Settlement Process ................................................................. 28D. Regional or Pro-development Fora ....................................................................... 32

Conclusion .................................................................................................................................... 35

I NTRODUCTION

On December 6, 2005, shortly before the World Trade Organization (WTO) MinisterialConference in Hong Kong, WTO member states agreed to accept a protocol of amendment 1 to

* Copyright 2008 Peter K. Yu. Kern Family Chair in Intellectual Property Law & Director, Intellectual Property Law Center,Drake University Law School; Visiting Professor of Law, Faculty of Law, University of Hong Kong; Research Fellow, Center forStudies of Intellectual Property Rights, Zhongnan University of Economics and Law. Earlier versions of this Article were presented atthe Tackling Global Health Issues Through Law and Policy Symposium at Boston University School of Law and the Second EDGE

Network Annual Conference in Vancouver, Canada. The Author would like to thank Kevin Outterson and Jeremy de Beer for their kindinvitations and the participants of these events for their valuable comments and suggestions, and Jonathan Soike for excellent researchand editorial assistance.

1 General Council, Amendment of the TRIPS Agreement , WT/L/641 (Dec. 8, 2005), available at http://www.wto.org/english/tratop_e/trips_e/ wtl641_e.htm [hereinafter TRIPs Amendment].


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the Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPs Agreement). 2 This amendment sought to provide a permanent solution to implement paragraph 6 of the DohaDeclaration on the TRIPS Agreement and Public Health (Doha Declaration). 3 If ratified, thenew article 31 bis of the TRIPs Agreement will allow countries with insufficient or nomanufacturing capacity to import generic versions of on-patent pharmaceuticals.

Although the initial deadline for ratification was December 1, 2007, the deadline has been recently extended for another two years. 4 As of this writing, slightly over a quarter of the151 WTO member states, including the United States, India, Japan, China, and most recentlymembers of the European Communities, have ratified the proposed amendment. 5 Because theamendment will not enter into effect until it is ratified by two-thirds of the WTO membership,commentators have expressed concern about the delay in adopting the proposed article 31 bis .6 They have also criticized the provisions cumbersomeness and complexity, 7 which they arguedhave discouraged less developed countries from taking advantage of the available waivers. InOctober 2007, Canada became the first country to notify the WTO of its authorization of themanufacture of a generic version of the patented AIDS therapy drug, TriAvir, for export toRwanda. 8

To date, most discussions of article 31 bis focus on the right of less developed countries toissue compulsory licenses and the need for these countries to exploit flexibilities within theTRIPs Agreement. 9 While these issues remain important, there are other, and perhaps non-legal,

2 Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing theWorld Trade Organization, Annex 1C, Legal Instruments Results of the Uruguay Round, 33 I.L.M. 1197 (1994) [hereinafter TRIPsAgreement].

3 WTO, Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/DEC/2, 41 I.L.M. 755 (2002) [hereinafter DohaDeclaration].

4 William New, TRI PS Council Extends Health Amendment; Targets Poor Nations Needs , I NTELLECTUAL PROPERTY WATCH , Oct.

23, 2007, http://www.ip-watch.org/weblog/index.php?p=798.5 WTO, Countries Accepting Amendment of the TRIPS Agreement , http://www.wto.org/english/tratop_e/trips_e/amendment_e.htm(Aug. 2, 2007).

6 As Frederick Abbott and Jerome Reichman commented:[F]rom a strictly legal standpoint there is no apparent risk from delay (or rejection) of the Amendment. However,the authors have serious concerns that industry interests and supporting governments would use delay or failure ofacceptance of the Amendment as the basis for an aggressive lobbying campaign intended to undercut the vitality ofthe waiver. Moreover, there is anecdotal evidence that some governments h ave taken a wait and see attitudetoward implementation of the Decision pending formalization via the Amendment.

FREDERICK M. ABBOTT & JEROME H. R EICHMAN , ACCESS TO ESSENTIAL MEDICINES : LESSONS LEARNED SINCE THE DOHADECLARATION ON THE TRIPS AGREEMENT AND PUBLIC HEALTH , AND POLICY OPTIONS FOR THE EUROPEAN U NION iv (2007).

7 See, e.g. , C.M. Correa, Recent International Developments in the Area of Intellectual Property Rights , available at http://www.iprsonline.org/unctadictsd/bellagio/docs/Correa_Bellagio2.pdf [hereinafter Correa, Recent International Developments ];Karin Timmermans, Ensuring Access to Medicines in 2005 and Beyond , in NEGOTIATING HEALTH : I NTELLECTUAL PROPERTY ANDACCESS TO MEDICINES 41, 45 (Pedro Roffe, Geoff Tansey & David Vivas Eugui eds., 2006); Peter K. Yu, The International Enclosure

Movement , 82 I ND . L.J. 827, 876 (2007).8 See Council for Trade-Related Aspects of Intellectual Property Rights, Notification Under Paragraph 2(c) of the Decision of 30

August 2003 on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health Canada ,IP/N/10/CAN/1 (Oct. 8, 2007); see also WTO, Canada Is First to Notify Compulsory Licence to Export Generic Drug ,http://www.wto.org/english/news_e/news07_e/trips_health_notif_oct07_e.htm (Oct. 4, 2007).

9 See, e.g. , SISULE F. MUSUNGU , SUSAN VILLANUEVA & R OXANA BLASETTI , UTILIZING TRIPS FLEXIBILITIES FOR PUBLICHEALTH PROTECTION THROUGH SOUTH SOUTH R EGIONAL FRAMEWORKS , at xv xvi (2004),http://www.southcentre.org/publications/flexibilities/flexibilities.pdf; Frederick M. Abbott & Jerome H. Reichman, The Doha Rounds

Public Health Legacy: Strategies for the Production and Diffusion of Patented Medicines Under the Amended TRIPS Provisions , 10 J. I NTL ECON . L. 921, 973 77 (2007); Robert Bird & Daniel R. Cahoy, The Impact of Compulsory Licensing on Foreign Direct Investment:

A Collective Bargaining Approach , 45 A M. BUS . L.J. (forthcoming 2007) [hereinafter Bird & Cahoy, The Impact of Compulsory Licensing ]; Yu, The International Enclosure Movement , supra note 7, at 848.


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means by which countries can enhance access to essential medicines. Instead of revisiting thedebate on the TRIPs Agreement or its compulsory licensing arrangement, this Article exploresthe possibility for greater collaboration among less developed countries.

To facilitate the supply of medicines to countries with insufficient or no manufacturingcapacity, article 31 bis (3), for example, provides for special arrangements for countries belongingto a regional trade agreement. 10 Such an arrangement allows less developed countries toaggregate their markets to generate the purchasing power needed to make the development of anindigenous pharmaceutical industry attractive. 11 The arrangement also paves the way for thedevelopment of regional supply centers, 12 procurement systems, 13 and patent institutions, as wellas the facilitation of region-based technical cooperation. 14

Notwithstanding the provisions collaborative potential, this Article takes the view thatarticle 31 bis (3) alone would not provide sufficient assistance to less developed countries in

promoting access to essential medicines. In fact, because article 31 bis specifically requires thatleast developed countries make up at least half of the membership of any beneficiary regionaltrade agreement, the regional arrangement permitted under the provision is quite limited. 15 Although less developed countries in Asia, the Caribbean, and South America can form regionaltrade agreements that fit this limitation, and most of these countries certainly will embrace a

broad interpretation of article 31 bis (3), the European Communities insisted that the [provision]should be limited to what is effectively sub- Saharan Africa. 16

Thus, this Article does not focus on the regional arrangement permissible under article31bis (3). Instead, it explores how greater collaboration among the BRICS countries (Brazil,Russia, India, China, and South Africa) and between these countries and other less developedcountries can promote access to essential medicines in the less developed world. Part Iintroduces members of the BRICS countries. This Part offers a brief discussion of each countryin the area of international intellectual property protection.

Part II then advances the hypothesis that, if the BRICS countries are willing to jointogether to form a coalition, it is very likely that this coalition will precipitate a negotiationdeadlock similar to the historic stalemate between developed and less developed countriesshortly before the negotiation of the TRIPs Agreement. This Part explains why these fivecountries collectively would possess such immense power to stop the push by the United Statesand the European Communities to ratchet up global intellectual property standards whilethreatening to grind the intellectual property harmonization process to a halt.

10 TRIPs Amendment, supra note 1, art. 31 bis (3).11 See Yu, The International Enclosure Movement , supra note 7, at 848.12 See Abbott & Reichman, supra note 9, at 973 77 (discussing the potential benefits of pooled procurement strategies and the

establishment of regional pharmaceutical supply centers).13 MUSUNGU , VILLANUEVA & BLASETTI , supra note 9, at xv xvi (advocating the establishment of regional procurement systems

where they would jointly conduct tendering through an entity acting on their behalf and a central purchasing agency managing the purchases on behalf of all the member countries); see also id . at 70 73 (discussing regional procurement systems).

14 See TRIPs Amendment, supra note 1, art. 31 bis annex 5.15 See id . art. 31 bis(3) (requiring that at least half of the current membership of [the regional trade agreement] is made up of

countries presently on the United Nations list of least developed countries). 16 Abbott & Reichman, supra note 9, at 945.


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Part III questions whether these five countries can build a sustained coalition in light oftheir very different historical backgrounds; the divergent levels of political, social, economic,and cultural developments; and the well-documented historical failures for less developedcountries to build or maintain effective coalitions. In light of this question, it may be morerealistic for less developed countries to enter into alliances with one or more of the BRICS

countries. Although these partial alliances will not have the same bargaining leverage as acomplete BRICS coalition, this Part notes that the resulting alliances will still be quite effectivefor advancing the interests of less developed countries.

Part IV highlights the role that the BRICS coalition or partial BRICS alliances can play inthe international intellectual property regime. It discusses four coordination strategies throughwhich less developed countries can strengthen their collective bargaining position, influencenegotiation outcomes, and promote effective and democratic decisionmaking in the internationalintellectual property regime. This Part contends that less developed countries, through collectiveaction and better coordination, can enhance access to essential medicines by establishing aneffective negotiation agenda, fostering more coherent positions among less developed countries,and influencing the bargaining outcome. Such collaboration also helps develop a powerful voicefor less developed countries in the international debates on public health, intellectual property,and international trade.

Although the underlying premise of this Article is that cooperation and solidarity arecritical to the success of less developed countries in advancing their interests in the WTO and theinternational intellectual property regime, the Article offers concrete proposals for promotingaccess to essential medicines in the less developed world. This Part also discusses the importantstrategic choices and coalition-building strategies that can help reduce the ongoing push by theUnited States and the European Communities to ratchet up global intellectual property standardsand to further reduce the limited policy space less developed countries have in developing theirintellectual property, trade, and public health policies.

I. MEET THE BRICS

In 2003, two Goldman Sachs global economists published a study entitled Dreaming with BRICs: The Path to 2050 .17 Because of its provocative finding that the economies of Brazil,Russia, India, and China (BRIC) are likely to overtake those of many existing developedeconomies by 2050, the study has attracted considerable attention. Based on the latestdemographic projections and a model of capital accumulation and productivity growth, theanalysts cast the following projections:

In less than 40 years, the BRICs economies together could be larger than the G6 in US dollarterms. By 2025 they could account for over half the size of the G6. Currently they are worth

17 Dominic Wilson & Roopa Purushothaman, Dreaming with BRICs: The Path to 2050 (Goldman Sachs, Global Economics Paper No. 99, 2003), reprinted in available at http://www2.goldmansachs.com/ideas/global-growth/99-dreaming.pdf. For an excellentcollection of essays discussing the BRIC economies, see E MERGING ECONOMIES AND THE TRANSFORMATION OF I NTERNATIONALBUSINESS : BRAZIL , R USSIA , I NDIA AND CHINA (Subhash C. Jain ed., 2007) [hereinafter E MERGING ECONOMIES ].
http://www.gs.com/insight/research/reports/99.pdfhttp://www.gs.com/insight/research/reports/99.pdf


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less than 15%. . . . Of the current G6 (US, Japan, Germany, France, Italy, UK) only the USand Japan may be among the six largest economies in US dollar terms in 2050. 18

To help us better understand the importance of the BRICS countries, and to lay thefoundation for the discussion of the BRICS coalition and partial BRICS alliances, this Part offersa brief discussion of each country in the area of international intellectual property protection. Italso explains why this Article includes South Africa, even though the Goldman Sachs studyintentionally omitted South Africa, in light of the economists projection that the South Africaneconomy will be significantly smaller than any of the BRIC economies in 2050. 19 Togetherwith the BRIC countries, South Africa forms the BRICS acronym used throughout this Article.(If Russia is excluded, due to its lack of WTO membership, the BICS acronym or the BICSQuad can be used instead.)

A. Brazil

Brazil, which has the worlds fifth largest population, is the poster child of the use of or,more precisely, the threat to issue compulsory licenses to promote access to essential

medicines. Although the country has repeatedly obtained concessions from major pharmaceutical companies through these threats, Brazil finally initiated a process to grantcompulsory licenses for the non-commercial public use of the patented AIDS drug efavirenz inApril 2007. 20 In addition, the National STD/AIDS Programme in Brazil has been widelyrecognized as a leading success for providing free, universal access to the treatment ofHIV/AIDS and a model for the less developed world. 21 The program has reduced AIDS -relatedmortality by more than 50 percent between 1996 and 1999. In two years, Brazil saved $472million in hospital costs and treatment costs for AIDS- related infections. 22

For decades, Brazil has been a leading voice for the less developed world. During theTRIPs negotiations, it constituted one of the ten hardliner countries that refused to expand the

GATT mandate to cover substantive intellectual property issues, along with Argentina, Cuba,Egypt, India, Nicaragua, Nigeria, Peru, Tanzania, and Yugoslavia. 23 During the Fifth WTOMinisterial Conference in Cancn (Cancn Ministerial) in 2003, Brazil initiated the G 20,24

18 Id . at 4.19 Id . at 11.20 See Press Release, Brazilian Ministry of Health, Brasil decreta licenciamento compulsrio do Efavirenz (May 5, 2007), available

at http://portal.saude.gov.br/portal/aplicacoes/noticias/noticias_detalhe.cfm?co_seq_noticia=29717. As Robert Bird and Daniel Cahoyhave noted, [i]t is likely that the move was at least partially sparked by the desire to obtain the same price Thailand sec ured followingits successful issuance of several compulsory licenses for AIDS and heart drugs. Robert C. Bird & Daniel R. Cahoy, The Emerging

BRIC Economies: Lessons from Intellectual Property Negotiation and Enforcement , 5 N W. J. TECH . & I NTELL . PROP . 400, 421 (2007)[hereinafter Bird & Cahoy, The Emerging BRIC Economies ].

21 See COMM N ON I NTELLECTUAL PROP . R IGHTS , I NTEGRATING I NTELLECTUAL PROPERTY R IGHTS AND DEVELOPMENT POLICY : R EPORT OF THE COMMISSION ON I NTELLECTUAL PROPERTY R IGHTS 43 (2003) (noting that the National STD/AIDS Programme inBrazil has been widely acclaimed as a possible model for other countries); Ellen t Hoen, TRIPS, Pharmaceutical Patents, and Accessto Essential Medicines: A Long Way from Seattle to Doha , 3 C HI. J. I NTL L. 27, 3 2 (2002) (noting that [t]he Brazil AIDS programserves as a model for some developing countries that are able to produce medicines locally).

22 t Hoen, supra note Error! Bookmark not defined. , at 32 (footnote omitted).23 See JAYASHREE WATAL , I NTELLECTUAL PROPERTY R IGHTS IN THE WTO AND DEVELOPING COUNTRIES 19 (2001).24 The current members of the G 20 are Argentina, Bolivia, Brazil, Chile, China, Cuba, Ecuador, Egypt, Guatemala, India, Indonesia,

Mexico, Nigeria, Pakistan, Paraguay, Peru, Philippines, South Africa, Tanzania, Thailand, Uruguay, Venezuela, and Zimbabwe. Thewebsite of the G 20 is available at http://www.g-20.mre.gov.br/. Notably, the G 20 includes all BRICS countries that are members ofthe WTO.


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whose demands and resistance led to the collapse of the ministerial conference. 25 A year later,Brazil, together with Argentina, introduced an important proposal to establish a developmentagenda within the World Intellectual Property Organization (WIPO). 26 Adopted in October2007, the Development Agenda include a series of recommendations to enhance thedevelopment dimension of the Organizations activities. 27 Along with countries in South

America and Southeast Asia, Brazil has also been very active in supporting the open sourcemovement. 28 As of this writing, Brazil remains the only less developed country that has everrequested consultations through the WTO dispute settlement process with any developed countryconcerning the inconsistency of its intellectual property laws with the TRIPs Agreement. 29 Because of Brazils aggressive public health positions, the United States Trade Representativelists the country among those posing major barriers to U.S. intellectual property exports in itsinfamous Section 301 List.

B. India

India, the worlds largest democracy and second most populous country, is the otherimportant voice for the less developed world. When Brazil requested consultations with theUnited States through the WTO dispute settlement process, India quickly requested to join thoseconsultations. 30 Indeed, Indias active lobbying on behalf of less developed countries for lowerintellectual property protection and special and differential treatment dates back to reforms thecountry introduced shortly after becoming an independent state. 31

During the 1967 Stockholm Revision Conference of the Berne Union, India and otherless developed countries demanded special concessions in the international copyright system inlight of their divergent economic, social, cultural, and technological conditions. 32 Although aninsufficient number of Berne Union members ratified the Stockholm Act, thus necessitating arenegotiation of the revision text in Paris four years later, the Stockholm Revision Conference

25 See Elizabeth Becker, Poorer Countries Pull Out of Talks Over World , N.Y. TIMES , Sept. 15, 2003, at A1; Editorial, The Cancun Failure , N.Y. TIMES , Sept. 16, 2003, at A24 [hereinafter The Cancun Failure ].

26 See Press Release, WIPO, Member States Agree to Further Examine Proposal on Development (Oct. 4, 2004), available at http://www.wipo.int/edocs/prdocs/en/2004/wipo_pr_2004_396.html.

27 See Press Release, WIPO, Member States Adopt a Development Agenda for WIPO (October 1, 2007), available at http://www.wipo.int/pressroom/en/articles/2007/article_0071.html.

28 See Brian Fitzgerald & Nic Suzor, Legal Issues for the Use of Free and Open Source Software in Government , 29 M ELB . U. L. R EV. 412, 422 (2005) (including South Africa, Brazil, Spain, Finland, and India among examples of governments moving towards opensource solutions); Daniel F. Olejko, Comment, Charming a Snake: Open Source Strategies for Developing Countries Disillusioned withTRIPs , 25 P A. ST. I NTL L. R EV . 855 (2007) (noting that [t]he [open source] movements stro ngest support and largest concentration ofcountries lies in South America where Argentina, Brazil, Chile, Peru, and Venezuela have displayed wide acceptance of open sourcesoftware in both government and industry).

29 See Request for Consultations by Brazil, United States US Patents Code , WT/DS224/1 (Feb. 7, 2001). It is important to notethat the request was made in response to the United States challenge of Brazils patent laws before the WTO. As Gregory Sha fferlamented, Brazil . . . never seriousl y pursued their claims to advance commercial interests, but rather searched for bargaining chips for a

potential settlement of the US and EC complaints. Gregory Shaffer, Recognizing Public Goods in WTO Dispute Settlement: Who Participates? Who Decides? The Case of TRIPS and Pharmaceutical Patent Protection , 7 J. I NTL ECON . L. 459, 479 (2004) [hereinafterShaffer, Recognizing Public Goods ].

30 See Request to Join Consultations by India, United States US Patents Code , WT/DS224/2 (Feb. 19, 2001).31 See Srividhya Ragavan, Of the Inequals of the Uruguay Round , 10 M ARQ . I NTELL . PROP . L. R EV. 273, 278 89 (2006) (discussing

the Ayyangar Committee Report and early patent reforms in India).32 See Barbara A. Ringer, The Role of the United States in International Copyright Past, Present, and Future , 56 G EO. L.J. 1050,

1065 (1968). For a detailed discussion of the origin and aftermath of the Stockholm Protocol, see S AM R ICKETSON & JANE C. GINSBURG , I NTERNATIONAL COPYRIGHT AND NEIGHBORING R IGHTS : THE BERNE CONVENTION AND BEYOND 879 963 (2d ed. 2005).


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led to the creation of WIPO and the inclusion of the Protocol Regarding Developing Countries inthe Berne Convention. 33 Both WIPO and the protocol remain vital parts of the currentinternational copyright arrangement.

Like Brazil, India has been listed in the United States Trade Representatives Section 301Priority Watch List in the past few years. 34 It is therefore no surprise that India, in 1997, becamethe respondent of the first intellectual property dispute in the WTO process that resulted in theestablishment of a dispute settlement panel. In the parallel proceedings of India Patent

Protection for Pharmaceutical and Agricultural Chemical Products , the United States and theEuropean Communities successfully challenged the failure by Indian patent law to establish amailbox system as required under article 70(8) of the TRIPs Agreement. 35

Shortly before January 1, 2005, the deadline by which the TRIPs Agreement requires alldeveloping countries to introduce protection for both pharmaceutical products and processes,India introduced a new patent law. 36 Although this new law is likely to have a major impact onthe development and availability of cheap, generic drugs and related ingredients, it includesspecific provisions to allow generic manufacturers to continue to sell drugs that are alreadydeveloped by paying reasonable royalties to patent holders. 37

C. China

China, the worlds most populist country, is the new kid on the block in the WTO. OnDecember 11, 2001, the country formally became the 143rd member of the international trading

body. 38 Notwithstanding its recent membership, Chinas piracy and counterfeiting problemshave been a major issue affecting its bilateral trade with the United States since the mid-1980s. 39 As a result, the country catches the attention of the United States Trade Representativeannually under either the Section 301 Watch List or Priority Watch List or other specialarrangements. Most recently, China becomes the respondent of the first WTO dispute on

intellectual property enforcement that has resulted in the establishment of a dispute settlement panel. 40 A number of countries have since joined the dispute as third parties. 41

33 See Peter K. Yu, Currents and Crosscurrents in the International Intellectual Property Regime , 38 L OY . L.A. L. R EV. 323, 328(2004) [hereinafter Yu, Currents and Crosscurrents ].

34 IP Justice, United States Trade Representative (USTR) Section 301 Annual Reports (2001-2007),http://ipjustice.org/USTR/Section_301_Table_2001-2007.htm (last visited Jan. 26, 2008).

35 Panel Report, India Patent Protection for Pharmaceutical and Agricultural Chemical Products , WT/DS50/R (Sept. 5, 1997);Panel Report, India Patent Protection for Pharmaceutical and Agricultural Chemical Products , WT/DS79/R (Aug. 24, 1998).

36 For a comprehensive discussion of the recent changes in Indian patent law, see generally Janice M. Mueller, The Tiger Awakens:The Tumultuous Transformation of Indias Patent System and the Rise of Indian Pharmaceutical Innovation , 68 U. PITT. L. R EV.(forthcoming 2007), http://ssrn.com/abstract=923538; Ragavan, supra note 31.

37 See Yu, The International Enclosure Movement , supra note 7, at 863.38 Symposium, China and the WTO: Progress, Perils, and Prospects , 17 C OLUM . J. ASIAN L. 1, 2 (2003) [hereinafter Symposium,China and the WTO ].

39 For discussions of early piracy and counterfeiting problems in China, see Peter K. Yu, From Pirates to Partners: Protecting Intellectual Property in China in the Twenty-first Century , 50 A M. U. L. R EV. 131 (2000); Peter K. Yu, Piracy, Prejudice, and Perspectives: Using Shakespeare to Reconfigure the U.S.-China Intellectual Property Debate , 19 B.U. I NTL. L.J. 1 (2001).

40 Request for the Establishment of a Panel by the United States, China Measures Affecting the Protection and Enforcement of Intellectual Property Rights , WT/DS362/7 (Aug. 21, 2007).

41 Constitution of the Panel Established at the Request of the United States, China Measures Affecting the Protection and Enforcement of Intellectual Property Rights , WT/DS362/8 (Dec. 13, 2007). Third parties involved in this dispute include Argentina,Australia, Brazil, Canada, the European Communities, India, Japan, Korea, Mexico, Chinese Taipei, Thailand, and Turkey. Id . 5.


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Notwithstanding the considerable piracy and counterfeiting problems in China, there has been noticeable improvement of intellectual property reforms in major cities and the coastalareas in the country. 42 There has also been emerging industrial development in the areas ofcomputer programs, movies, semiconductors, and biotechnology. Such developments have ledme to suggest elsewhere that the many conflicts and competing interests within China are likely

to drive the countrys leaders to develop a schizophrenic nationwide intellectual property policy. 43 While the country wants stronger protection for its fast-growing industries, it prefersweaker protection in fields related to pharmaceuticals, chemicals, fertilizers, seeds, andfoodstuffs, due to its huge population, continued economic dependence on agriculture, theleaders worries about public health issues, and their concerns about the peoples overall well -

being.

Although China, thus far, has maintained a relatively low profile in the WTO, 44 andserves mostly as a respondent in WTO complaints, that position will change as the countrydevelops greater WTO-related expertise and becomes more adept in responding to internal

problems caused by the WTO accession. Indeed, China provided key support to less developedcountries during the Cancn Ministerial. As Professor Sungjoon Cho noted: [T]he Chinafactor enab led the creation of the G 21 [or the G 20]. . . . [W]ith China in their ranks, the sizeand impact of this coalition became unprecedented. 45 In the years to come, China is likely to

become a very important player in the WTO, even if it does not become as vocal a leader asBrazil or India.

Among the BRICS countries, China and India or Chindia, as some politicians,commentators, and researchers have described them collectively 46 are most likely to becomethe first countries to reach a crossover point at which stronger intellectual property protectionwill be in the countrys self -interests. Since the late 1980s, the Chinese economy has beengrowing at an enviable average annual rate of about ten per cent. 47 Chinas imports tripled from$225 billion in 2000 to $600 billion in 2005, and the country accounted for about 12 percent ofthe growth of global trade, an impressive jump from only 4 per cent in 2000. 48 Because of itsability to lower production costs while continuing to attract considerable foreign direct

42 See Peter K. Yu, From Pirates to Partners (Episode II): Protecting Intellectual Property in Post-WTO China , 55 A M. U. L. R EV.901, 975 99 (2006) [hereinafter Yu, From Pirates to Partners II ] (examining the progress China has made in the intellectual propertyarena).

43 See Peter K. Yu, International Enclosure, the Regime Complex, and Intellectual Property Schizophrenia , 2007 M ICH. ST. L. R EV.1, 25 26 [hereinafter Yu, International Enclosure, the Regime Complex ].

44 See Henry S. Gao, Chinas Participation in the WTO: A Lawyers Perspective , 11 S ING . YB. I NTL L. 1, 29 30 (2007) (explainingwhy China has consistently taken a low profile in all WTO activities); see also Yan Li, Faint Silhouette: Can China Be a WTO

Leader? , WASH . OBSERVER , Dec. 14, 2005, available athttp://www.washingtonobserver.org/showtemp.cfm?showtempid=1181&charid=1&uid=1&CFID=206401&CFTOKEN=13729970(reporting an interview with the Author on Chinas potential leadership in the WTO). 45 Sungjoon Cho, A Bridge Too Far: The Fall of the Fifth WTO Ministerial Conference in Cancn and the Future of TradeConstitution , 7 J. I NTL ECON . L. 219, 235 (2004).

46 See, e.g. , CHINDIA : HOW CHINA AND I NDIA ARE R EVOLUTIONIZING GLOBAL BUSINESS (Pete Engardio ed., 2006) [hereinafterCHINDIA ]; J AIRAM R AMESH , MAKING SENSE OF CHINDIA : R EFLECTIONS ON CHINA AND I NDIA (2006); see also DANCING WITH GIANTS : CHINA , I NDIA , AND THE GLOBAL ECONOMY (L. Alan Winters and Shahid Yusuf eds., 2007) [hereinafter D ANCING WITH GIANTS ];R OBYN MEREDITH , THE ELEPHANT AND THE DRAGON : THE R ISE OF I NDIA AND CHINA AND WHAT IT MEANS FOR ALL OF US (2007).

47 C. FRED BERGSTEN , BATES GILL , NICHOLAS R. LARDY & DEREK MITCHELL , CHINA : THE BALANCE SHEET : WHAT THE WORLD NEEDS TO K NOW NOW ABOUT THE EMERGING SUPERPOWER 18 (2006). Some early research has placed Chinas annual growth rate at amore modest rate of seven to eight per cent. See Symposium, China and the WTO , supra note 38, at 3.

48 BERGSTEN , GILL , LARDY & MITCHELL , supra note 47, at 73.


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investment, China has become one of the worlds largest surplus countries, possessing one of theworlds most sizeable foreign exchange reserves. 49 As the Goldman Sachs study forecasted,[i]n US dollar terms, China could overtake Germany in the next four years, Japan by 2015 andthe US by 2039. 50 Although China today is considered the worlds manufacturing capital,

producing shoes, clothes, toys, household products, and low-cost electronic goods, the country

eventually will move into the worlds hig h-end market while continuing to dominate its low-endmarket. 51

India is not far behind, however. As the Goldman Sachs study stated, India has the potential to show the fastest growth over the next 30 and 50 years, and its economy could belarger than a ll but the US and China in 30 years. 52 Growing at a steady rate of above five

percent, India was estimated to raise its US dollar income per capita in 2050 to 35 times currentlevels. 53 In fact, some analysts have predicted that India will eventually overtake China in thelatter half of the twenty-first century. As Pete Engardio, Business Week s Asia correspondent,noted, India might eventually become a stronger economic power than China, due to its growthin workforce, fixed investment, and productivity. 54 Likewise, Huang Yasheng and TarunKhanna observed: China and India have pursued radically different development strategies.India is not outperforming China overall but it is doing better in certain key areas. That successmay enable it to catch u p with and perhaps even overtake China. 55

D. Russia

Russia, which has the worlds ninth largest population and whose economy is projectedto be the smallest among the BRIC countries by 2050, is the leftover Big Brother from the ColdWar era. As a major military power with nuclear capabilities, it has an enviable status in world

politics and is of great political importance to the European Communities and the UnitedStates. 56 It also has very high research-and-development capabilities and considerabletechnology-oriented human capital two critical elements for the development of indigenousintellectual property-based industries.

As of this writing, Russia is still struggling to negotiate its way into the WTO adaunting task that took China more than fifteen years. 57 Although Russias piracy and

49 See id . at 4.50 Wilson & Purushothaman, supra note 17, at 4.51 See Daniel C.K. Chow, Why China Does Not Take Commercial Piracy Seriously , 32 O HIO N.U.L. R EV. 203, 208 (2006) (Chinas

ambitions are vast: China seeks to maintain its dominance in labor-intensive sectors, to gain and maintain dominance in low-technologysectors, and to eventually dominate trade in high- technology sectors.); Pete Engardio, Introduction to C HINDIA , supra note 46, at 5(noting that [t]he idea that China will co ntinue to assemble low-end products while high-end manufacturing will always remain inadvanced countries . . . is becoming outdated); Peter K. Yu, Trade Barriers Wont Contain Chinas Cars , DETROIT NEWS , Oct. 25,2007, at 15A (discussing Chinas growing interest in the American car market and its eagerness to set up its own national championautomaker ).

52 Wilson & Purushothaman, supra note 17, at 4.53 Id . at 10.54 Pete Engardio, Why India May Be Destined to Overtake China , in CHINDIA , supra note 46, at 27.55 Yasheng Huang & Tarun Khanna, Can India Overtake China ?, FOREIGN POLY, July/August 2003, at 74, 81.56 See Bird & Cahoy, The Emerging BRIC Economies , supra note 20 , at 409 (noting that India lacks the economic power of China

and the political importance of Russia in the eyes of the United States). 57 Symposium, China and the WTO , supra note 38, at 2.


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counterfeiting problems are as serious as, or if not more than, those of China, 58 the countryslimited economic growth has made Russia a less attractive market for Western businesses.While Russia is occasionally criticized, such as in the case of the Russia-based downloadingwebsite www.allofmp3.com, 59 the countrys piracy and counterfeiting problems have caught lessmedia attention. When Russia finally enters the WTO, it is likely to face similar transitional

challenges that currently confront China. In fact, the strong likelihood that Russia will be unableto comply satisfactorily with all WTO standards shortly after its entry into the WTO has madeU.S. and EC policymakers very reluctant to allow Russia to join the international trading body.

E. South Africa

South Africa is a strong economy that follows the BRIC countries economically, but fromquite a long distance. It also has a much smaller population than each of the BRIC countries. Asa result, South Africa was left out of the Goldman Sachs study. Nevertheless, in the near future,the country will still become quite powerful vis--vis other less developed countries, even thoughits economy may not compare favorably to that of the BRIC countries. 60 Having the largesteconomy in the African continent, the country will also have continuing influence over othercountries within the continent, and possibly those in Asia, the Caribbean, and South America.

In addition, South Africa has been mentioned repeatedly in relation to the wider socio-economic and public health problems caused by high intellectual property standards of the TRIPsAgreement. 61 Along with Brazil and India, South Africa was prominently involved in thenegotiations 62 that led to the Decision on the Implementation of Paragraph 6 of the DohaDeclaration on the TRIPS Agreement and Public Health. 63 It has also been instrumental in

putting the access-to-medicines issue on the human rights and public health agendas. 64 Today, itremains active in the access-to-medicines debate.

In retrospect, one could easily consider the campaign on access to drugs, and South

Africas contribution to the campaign, a major turning point in the TRIPs debate.65

When SouthAfrica enacted a law to allow for compulsory licenses to manufacture generic versions of

patented HIV/AIDS drugs in December 1997, the South African Pharmaceutical ManufacturersAssociation brought suit to challenge the law before the Pretoria High Court. 66 The UnitedStates government backed the industry by putting South Africa on the Section 301 Watch List

58 I NTERNATIONAL I NTELLECTUAL PROPERTY ALLIANCE , 2007 SPECIAL 301 R EPORT 115 (2007) (noting that Russias currentcopyright piracy problem remains one of the worst of any country in the world).

59 See OFFICE OF THE USTR, 2007 NATIONAL TRADE ESTIMATE R EPORT ON FOREIGN TRADE BARRIERS 498 (2007).60 See Wilson & Purushothaman, supra note 17, at 11.61 See, e.g. , SUSAN K. SELL , PRIVATE POWER , PUBLIC LAW : THE GLOBALIZATION OF I NTELLECTUAL PROPERTY R IGHTS 146 62

(2003); Debora Halbert, Moralized Discourses: South Africas Intellectual Property Fight for Access to AIDS Drugs , 1 S EATTLE J. SOC . JUST . 257 (2002); t Hoen, supra note Error! Bookmark not defined. .

62 Sonia E. Rolland, Developing Country Coalitions at the WTO: In Search of Legal Support , 48 H ARV . I NTL L.J. 483, 496 (2007).63 General Council, Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health , WT/L/540

(Sept. 1, 2003), 43 I.L.M. 509 (2004).64 See Yu, The International Enclosure Movement , supra note 7, at 865 66.65 Daniel Gervais and Susan Sell made similar observations. See SELL , supra note 61, at 181 (observ ing that [t]he HIV/AIDS

pandemic was a contingency that sped up the revelation of the negative consequences of TRIPS) ; Daniel J. Gervais, Remarks at theInternational Conference on Impact of TRIPS: INDO-US Exchange at NALSAR University of Law, Hyderabad, India (Dec. 15, 2006).

66 SELL , supra note 61, at 151.


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and announcing the suspension of its Generalized System of Preferences (GSP) benefits. 67 Fortunately for South Africa and the less developed world, the South African governmentreceived considerable support from advocacy and minority groups and AIDS activists in theUnited States, and the issue became quickly tied up with American electoral politics, inspiringsuch slogans as Gores Greed Kills. 68 Eventually, the Clinton administration backed away

from its original stance, even though it was heavily lobbied by the pharmaceutical industry.F. Summary

In the future, each of the BRICS countries Brazil, Russia, India, China, or SouthAfrica is likely to play an important role in the development of the international intellectual

property regime. To be certain, all of these countries still have many internal problems, such aslimited judicial independence in China, severe infrastructural problems in India, andenvironmental challenges, bureaucratic problems, and corruption in virtually all of thesecountries. 69 The Goldman Sachs study may also have been overly optimistic in assuming thatthe BRIC countries will undertake reasonably successful development 70 in other words, thesecountries will continue t o maintain policies and develop institutions that are supportive ofgrowth. 71 In fact, if the economies of these countries are slowed down or collapse as a result ofinternal political unrests, major reform failures, significant change of demographics, financialcalamities, public health crises, environmental disasters, or even civil or external wars, thesecountries are very unlikely to overtake the worlds leading developed economies as the studyforecasted. Indeed, the study conceded that there is a good chance that our projections are notmet, either through bad policy or bad luck. 72

Nevertheless, even if we discount the potential economic growth in these countries, it ishard to ignore their impact on the international intellectual property regime, especially when theyteam up to form a coalition. Such a coalition, which will be described as the BRICS coalitionthroughout this Article, will be similar to what Frederick Abbott and Peter Drahos havedescribed, respectively, as the Southern Quad 73 and the Developing Country Quad. 74 Just

based on their total population, the size of their combined markets, and the aggregation oftechnical, legal, and managerial expertise within those countries, the BRICS coalition is likely to

provide enough leverage to rival the United States or the European Communities.

If the coalition is well built and maintained, it can even become an effectivecounterweight to the trilateral cooperation among the European Communities, the United States,

67 See id . at 152.68 See id . at 152-53; see also Halbert, supra note 61, at 270.69 For a discussion of the different challenges confronting the BRICS countries, see Jack N. Behrman, Peak and Pits with the BRICs:

Accommodations with the West , in EMERGING ECONOMIES , supra note 17, at 513.70 Wilson & Purushothaman, supra note 17, at 3.71 Id . at 2.72 Id .73 Frederick M. Abbott, Toward a New Era of Objective Assessment in the Field of TRIPS and Variable Geometry for the

Preservation of Multilateralism , 8 J. I NTL ECON . L. 77, 88 (2005). Notably, Professor Abbott did not include Russia in his discussion, because it was not a WTO member.

74 Peter Drahos, Developing Countries and International Intellectual Property Standards-Setting , 5 J. WORLD I NTELL . PROP . 765,784 (2002) [hereinafter Drahos, Developing Countries ]. Professor Drahos also excluded Russia. Unlike Professor Abbott, ProfessorDrahos included Nigeria, instead of South Africa, in the mix.


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and Japan. The latter countries were instrumental in pushing for the establishment of the TRIPsAgreement. 75 They also have been active in promoting harmonization of the international patentsystem, 76 pushing most recently for the rather ill-advised proposed adoption of the SubstantivePatent Law Treaty. 77 Even if the BRICS coalition is unable to resist the push by this trilateralcombination, the countries can at least exploit strategically the growing rifts between the United

States, the European Communities, and Japan,78

thus enlarging the policy space of lessdeveloped countries.

In sum, it would not be far-fetched to advance the hypothesis that a coalition made up ofthe BRICS countries can provide an effective countervailing force against the continued push forstronger global intellectual property standards by the United States and the EuropeanCommunities. The resistance put up by this coalition may even result in a negotiation deadlockthat resemble the historic stalemate between developed and less developed countries during the1981 Diplomatic Conference in Nairobi. 79 That stalemate eventually led to the breakdown ofdiscussions at WIPO, the shift of multilateral negotiations to GATT/WTO, the establishment ofthe WTO and the TRIPs Agreement, and the now-turbulent marriage of trade and intellectual

property. For commentators who have called for a moratorium on the upward ratchet of globalintellectual property standards, like Keith Maskus and Jerome Reichman, 80 a stalemate betweendeveloped and less developed countries may be somewhat desirable. At the very least, thestalemate will stop developed countries from pushing for higher intellectual property standardsthat have yet to be proven economically beneficial for the less developed world.

II. THE BRICS COALITION

To illustrate why the BRICS coalition would succeed in promoting greater access toessential medicines in the less developed world, consider Brazils effective use of its threat toissue compulsory licenses of patented pharmaceuticals. Such a threat has enabled the country toreduce the price of HIV/AIDS retroviral drugs by up to 75 per cent per person. 81 Unlike thevague threats made by other less developed countries, Brazils threats are fairly credible. Theircredibility can be attributed to three preconditions that are usually not present in other lessdeveloped countries.

75 See Yu, Currents and Crosscurrents , supra note 33, at 363.76 For information about trilateral cooperation between the European Patent Office, the Japanese Patent Office, and the U.S. Patent

and Trademark Office, see http://www.trilateral.net/.77 For a recent critique of the proposed Substantive Patent Law Treaty, see Jerome H. Reichman & Rochelle Cooper Dreyfuss,

Harmonization Without Consensus: Critical Reflections on Drafting a Substantive Patent Law Treaty , 57 D UKE L.J. 85 (2007).78 See AMRITA NARLIKAR , I NTERNATIONAL TRADE AND DEVELOPING COUNTRIES : BARGAINING COALITIONS IN THE GATT AND

WTO 155 (2003) (noting that [t]he Cairns Group utilized the rift within the US -EC with great skill); Rolland, supra note 62, at 503(noting the strategic exploitation of rifts between the United States, the EU, and Japan); Peter K. Yu, TRIPS and Its Discontents , 10MARQ . I NTELL . PROP . L. R EV. 369, 406 08 (2006) (noting the need to explore the tension between the European Communities and theUnited States).

79 See Yu, Currents and Crosscurrents , supra note 33, at 357.80 See K EITH E. MASKUS & JEROME H. R EICHMAN , THE GLOBALIZATION OF PRIVATE K NOWLEDGE GOODS AND THE

PRIVATIZATION OF GLOBAL PUBLIC GOODS , IN I NTERNATIONAL PUBLIC GOODS AND TRANSFER OF TECHNOLOGY U NDER AGLOBALIZED I NTELLECTUAL PROPERTY R EGIME 3, 36 39 (Keith E. Maskus & Jerome H. Reichman eds., 2005) (calling for amoratorium on stronger international intellectual property standards).

81 Pedro Roffe with Christoph Spennemann & Johanna von Braun, From Paris to Doha: The WTO Doha Declaration on the TRIPS Agreement and Public Health , in NEGOTIATING HEALTH , supra note 7, at 9, 15.


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First, the country has an indigenous capacity to develop and manufacture pharmaceuticals,which in turn has created a strong negotiating capacity for obtaining low prices from patentholders. 82 The capacity to develop and manufacture pharmaceuticals is important, because acountry cannot force major pharmaceutical companies to import drugs against their wishes or todevote resources to develop treatments for neglected diseases that affect its population. Indeed,

the introduction of the proposed article 31 bis was a direct result of the ineffectiveness of the useof compulsory licenses to address public health crises in countries with insufficient or nomanufacturing capacity. 83

For a country with little or no manufacturing capacity, the nationalization of foreign pharmaceutical companies seems to be the only option, assuming that foreign manufacturingfacilities are already present in the country. That option, however, is highly undesirable. Whilesuch a move may provide short-term gains in the supply of pharmaceuticals, and perhaps eventhe transfer of drug-related technologies, the wildly unpopular use of national expropriationmeasures would result in long-term sacrifices, such as a loss of foreign direct investment, atarnished international reputation, and potential trade sanctions and embargoes. In fact, somerights holders and developed countries already consider compulsory licensing a form ofexpropriation of intellectual property rights. 84

Second, Brazil contains a lucrative middle class market that multinational pharmaceuticalfirms cannot afford to lose or alienate. Compared to other less developed countries, Brazil isless dependent on the U.S. for . . . a market for its own ex ported products. 85 Indeed, studieshave shown that the following conditions are crucial for countries to become internallycompetitive pharmaceutical manufacturers:

gross domestic product (GDP) greater than about US $100 billion; population greater than about 100 million;sufficient numbers of the population enrolled in secondary and tertiary education;competitiveness index (UNIDO) greater than about 0.15; anda net positive pharmaceutical balance of trade. 86

Because the markets in less developed countries are usually very small, it may be virtuallyunprofitable to develop a local industry that is primarily restricted to the domestic market. 87 Even when the markets of several less developed countries are aggregated to provide economiesof scale and scope, there is no guarantee that the combined market would generate enough

82 Joan Rovira, Creating and Promoting Domestic Drug Manufacturing Capacities: A Solution for Developing Countries , in NEGOTIATING HEALTH , supra note 7, at 227, 236.

83 See Yu, The International Enclosure Movement , supra note 7, at 872 86 (tracing the development of proposed article 31 bis ).84 See Drahos, Developing Countries , supra note 74, at 769 (For the United States, developing country proposals for exclusive

compulsory licensing amounted to little more than expropriation of U.S. intellectual property rights.). 85 Eyal Benvenisti & George W. Downs, Distributive Politics and International Institutions: The Case of Drugs , 36 C ASE W. R ES. J.

I NTL L. 21, 44 (2004).86 Rovira, supra note 82, at 234.87 See id . at 229 (noting that a limited market size might make unprofitable a local industry restricted to the domestic market).


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purchasing power to make the development of an indigenous pharmaceutical industryattractive. 88

To make things worse for many less developed countries, the lack of economies of scaleor scope has resulted in very high costs of drug development, including the very high costs ofconducting clinical studies for proving the therapeutic effect of a drug and for securingregulatory approval. While large generic manufacturers may be able to afford costly

bioequivalence studies, the costs of these studies can be prohibitively high for small andmidsized firms. A study in Colombia [for example] estimated that the requirement of

bioequivalence studies for anti-hypertensive and anti-inflammatory drugs would increase the price of domestically manufactured products by a percentage of between 46 and 61 per cent. 89 A recent study presented at a World Bank forum also highlighted a lack of evidence to suggestthat domestic production will necessarily reduce prices and improve the quality of and access tomedicines. 90

Finally, Brazil, or at least the part of the country where drugs are to be manufactured, isnot as vulnerable to development-related problems as many other less developed countries. Ithas bett er access to special technologies, reliable supplies of high -quality raw materials,dependable provision of top-quality water, electricity, gas and other utilities . . . [and] sufficienthuman resources, such as experts in pharmaceutical development, quality assurance andregulatory processes. 91 The latter processes are particularly important, because they can affectwhether the available drugs are safe and can perform their intended functions. In many lessdeveloped countries, insufficient regulatory capacity has resulted in a high percentage of drugsfailing quality control tests as well as the wide availability of counterfeit drugs. 92 While drugsmay be accessible and sold at a much lower price, people continue to suffer, innocent lives arelost, and t he countrys labor and economic outputs remain low.

Although the above discussion focuses mainly on Brazil, the same arguments can beextended to other BRICS countries. Because each of the BRICS countries has raw materials,technical capacity, manufacturing conditions, and a sufficiently large market, it is likely to beable to make a very credible threat. If these threats are combined, the threat will become evenmore credible, and the implications for these threats on the international intellectual propertydebate will be much larger.

88 See Keith E. Maskus, Ensuring Access to Essential Medicines: Some Economic Considerations , 20 W IS. I NTL L.J. 563, 568 (2002)([P]urchasing power, even if aggregated across a number of markets, may not be enough to make drug development attractive.) .

89 Rovira, supra note 82, at 234.90 W.A. K APLAN & R. LAING , LOCAL PRODUCTION OF PHARMACEUTICALS : I NDUSTRIAL POLICY AND ACCESS TO MEDICINES : A N

OVERVIEW OF K EY CONCEPTS , ISSUES AND OPPORTUNITIES FOR FUTURE R ESEARCH (HNP Discussion Papers, World Bank, 2005),http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Resources/281627-1095698140167/KaplanLocalProductionFinal.pdf, cited in Rovira, supra note 82, at 232.

91 Rovira, supra note 82, at 233 (quoting W ORLD HEALTH ORG ., MANUFACTURE OF A NTIRETROVIRALS IN DEVELOPING COUNTRIESAND CHALLENGES FOR THE FUTURE 1 (2004), http://www.who.int/gb/ebwha/pdf files/EB114/B114 15-en.pdf).

92 See G IAN LUCA BURCI & CLAUDE HENRI VIGNES , WORLD HEALTH ORGANIZATION 188 (2004) ([E]ven if drugs are available,weak drug regulation may mean that they are substandard or counterfeit.); MUSUNGU , VILLANUEVA & BLASETTI , supra note 9, at 28(Many developing countries . . . lack the facilities and expertise needed to review the safety, efficacy and quality of drugs destined fortheir national markets, and remain dependent on foreign authorities to set the necessar y standards and do the necessary testing.); Nitya

Nanda & Ritu Lodha, Making Essential Medicines Affordable to the Poor , 20 W IS. I NTL L.J. 581, 586 (2002) (Surveys from a numberof developing countries show that between 10 and 20 percent of sampled drug s fail quality control tests.).


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In addition, these countries will have the capacity to provide generic versions of many ofthe drugs needed by both the BRICS countries and other less developed countries. They alsowill be able to supply active pharmaceutical ingredients that are necessary for the production of

both generic and on-patent drugs in the less developed world. 93 As Joan Rovira observed, the production of these ingredients is concentrated in the industrialized world and in a few

emerging countr ies.94

Less developed countries that have the capacity to produce active pharmaceutical ingredients include India, China, Thailand, Egypt, Brazil, Mexico, Argentinaand, to some extent, Yugoslavia and Turkey. 95 The rest of the less developed world eitherconsists of formulators or have insufficient or no manufacturing capacity.

Thus, in a face-off between developed countries and the BRICS coalition, or betweendeveloped and less developed countries, the impact of the BRICS coalition on the access-to-medicines debate is likely to be considerable. To be certain, the patent-based pharmaceuticalindustries could still focus on the developed country markets, which will remain protected bystrong intellectual property laws. However, the lack of protection in the less developed world,and the possibility for generic drugs to enter and then take over developed country markets, arelikely to grind the intellectual property harmonization process to a halt. If one believes the

pharmaceutical industrys claim that the foreign market is of paramount importance to theindustry, 96 a united front set up by the BRICS countries and other less developed markets might

be able to threaten the survival of major pharmaceutical manufacturers in the developed world,thus requiring these manufacturers to alter their domestic and international lobbying strategies.

III. PARTIAL BRICS ALLIANCES

Although the BRICS coalition will provide the needed resistance to the growing protection of pharmaceutical products, the formation of such a coalition for a sustained period oftime proves to be a major challenge. As noted above, each of the BRICS countries is currentlyconfronted with many internal problems. In addition, the levels of protection vary according tothe relevant economic and technological sectors, while the stakeholders in the intellectual

property system in these countries often differ. Even more problematic, these countries, due totheir vast sizes, have very uneven economic development. As two World Bank researchersobserved:

Concerns are being expressed about the distributional impacts of the growth processes in[China and India]. The domestic debate about growth-promoting reforms has becomeincreasingly contentious. It is widely felt that the gains from growth have been spread toounevenly, with some segments of the populations left behind in relative and even absolute

93 See Timmermans, supra note 7 , at 42 (noting that Indian companies are major suppliers of generic medicines and of the active pharmaceutical ingredients (APIs) necessary for their production to other developing and developed countries). 94 Rovira, supra note 82, at 231.

95 Id .96 See Gerald J. Mossinghoff, Research-based Pharmaceutical Companies: The Need for Improved Patent Protection Worldwide , 2

J.L. & TECH . 307, 307 (1987) (Whether [the commitment of Americas research -based pharmaceutical companies] can continuedepends greatly upon the extent to which foreign governments allow innovators to be rewarded for their inventiveness, monetaryinvestment, and intellectual labor.); Judy Slinn, Research and Development in the UK Pharmaceutical Industry from the NineteenthCentury to the 1960s , in D RUGS AND NARCOTICS IN HISTORY 168 (Roy Porter & Mikul Teich eds., 1995), quoted in GRAHAM DUTFIELD , I NTELLECTUAL PROPERTY R IGHTS AND THE LIFE SCIENCE I NDUSTRIES : A 20TH CENTURY HISTORY 108 (2003) (noting that new drugsmust be sold worldwide, since no company can fully exploit a patented product, recouping its research and development costs solely inits own home market, even in the two largest national markets, the USA and Japan).


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terms. Yes, the Giants are awakening from their economic slumber, but they still are only partially awake in that segments of their societies remain (relatively and absolutely)dormant. 97

In the case of China, there remain widespread disparities at both the regional and sectoral levels,and these disparities have made it virtually impossible for China to adopt a nationwideintellectual property policy that would work well for different parts of the country. 98 Similarobservation can be made with respect to Brazil, Russia, India, and South Africa, all of whichexperience wide disparities in wealth, resources, economic development, and research-and-development capabilities.

When intellectual property is linked to international trade, new issues will also arise. 99 As these issues are being incorporated into the larger policy debate, they may enlarge theexisting regional or sectoral disparities within the country. The arrival of new players and issuesalso precipitate new disputes among the stakeholders while aggravating existing disputes thathave been brewing before new issues are incorporated into the debate.

Eventually, the widely divergent interests within each BRICS country and the different priorities the country places on those interests will make it very difficult for the BRICS countriesto build a successful coalition. As Professor Cho noted, shortly after the proven success of theG 20 during the Cancn Ministerial:

One could not confidently predict that [the collective stance taken by the G 20] will remainas solid in the future as it was in Cancn. Interests of [these countries] are not homogenous.For instance, while India still wants to protect domestic agricultural industries, Brazil, amember of the Cairns Group consisting of agricultural product exporters, wants to furtherliberalize trade in this area. Moreover, we witnessed other groups of developing countries,such as the G-33, which advocated the inclusion of strategic products and a special safeguardmechanism in the agriculture negotiation; the coalition of the African Union, the African,

Caribbean, and Pacific countries, and the LDCs . . . which collectively want the preservationof current preferential treatment in addition to G-33 demands. 100

Professor Chos skepticism was well supported by the history of less developed countries,which hitherto have only limited success in using coalition-building efforts to increase their

bargaining leverage. Their lack of success was perhaps caused by the fact that these coalitionswere usually too ambitious; they were set up to include a broad mandate, diverse membership,complex issues, and incompatible interests. As Amrita Narlikar has shown, issue-basedcoalitions work best for small and very specialized economies with common profiles andinterests, but not as well for larger, more diverse, and often internally conflicting economies, likethose of the BRICS countries. 101 Such coalitions also do not work well for a large bloc of less

97 Shubham Chaudhuri & Martin Ravallion, Partially Awakened Giants: Uneven Growth in China and India , in DANCING WITHGIANTS , supra note 46, at 175, 175 76.

98 See Peter K. Yu, Intellectual Property, Economic Development, and the China Puzzle , in I NTELLECTUAL PROPERTY , TRADE ANDDEVELOPMENT : STRATEGIES TO OPTIMIZE ECONOMIC DEVELOPMENT IN A TRIPS PLUS ERA 173, 198 209 (Daniel J. Gervais ed., 2007).

99 Yu, International Enclosure, the Regime Complex , supra note 43, at 16 17.100 Cho, supra note 45, at 236 (footnotes omitted).101 NARLIKAR , supra note 78, at 176.


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developed countries that have various strengths, sizes, and interests and that are only linkedtogether in an ad hoc fashion. 102

The lack of success by less developed countries to build or maintain coalitions can befurther attributed to their high[] dependen[ce] on the developed countries as the source ofcapital, whether it is provided through the IMF or World Bank, or through investment bankersand securities exchanges. 103 As Professor Abbott observed:

Over the past 50 years, there have been a number of efforts to achieve solidarity or common positions among developing countries in international forums. At the broad multilateral levelthere was (and are) the Group of 77, and the movement for a New International EconomicOrder. At the regional level, the Andean Pact in the early 1970s developed a rathersophisticated common plan to address technology and IP issues (ie Decisions 84 and 85). Yetthese efforts were largely unsuccessful in shifting the balance of negotiating leverage awayfrom developed countries. In fact, developing country common efforts to reform the ParisConvention in the late 1970s and early 1980s are routinely cited as the triggering event formovement of intellectual property negotiations to the GATT. 104

In light of the lack of likelihood of success in building a sustained coalition among theBRICS countries, this Part proposes a more realistic option: the creation of alliances betweensome of the BRICS countries 105 and, more importantly, between less developed countries andone or more of the BRICS countries. These alliances will be described throughout the Article aspartial BRICS alliances. Although most of the arguments in this Part are valid for both typesof partial BRICS alliances, this Article focuses mainly on the latter, because these alliances aremore important to promoting access to essential medicines in countries with insufficient or nomanufacturing capacity.

While each partial alliance does not provide the same bargaining leverage as the BRICScoalition, it still possesses a number of attractive features. By teaming other less developed

countries up with one or more of the BRICS countries, the group will have leverage that does notexist for each less developed country alone. The costs of maintaining a partial alliance is alsosignificantly lower than what would be required to maintain a complete coalition. Moreover,like the BRICS coalition, partial BRICS alliances can be used strategically to help less developedcountries develop their own voice. If multiple partial alliances are set up, these alliances, partialas they are, may result in the creation of a web of alliances that provides immense synergistic

potential.

Indeed, the rationales behind the effectiveness of these partial alliances are quite similarto the rationales behind the effectiveness of the BRICS coalition. Each of the BRICS countrieswill have the raw materials and technical capacity needed to manufacture many on-patent or

generic pharmaceuticals demanded by other less developed countries. They also possess the

102 See Rolland, supra note 62, at 510 (noting that groups of members sharing common profiles and common interests . . . are bettercandidates for institutional and legal support than ad hoc issue- based coalitions).

103 Frederick Abbott, The Future of IPRs in the Multilateral Trading System , in TRADING IN K NOWLEDGE : DEVELOPMENTPERSPECTIVES ON TRIPS, TRADE AND SUSTAINABILITY 36, 43 (Christophe Bellmann, Graham Dutfield & Ricardo Melendez-Ortiz eds.,2003).

104 Id . at 42.105 For discussions of initiatives among the BRIC countries, see Behrman, supra note 69, at 528 31.


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market conditions for the development of a regional, or Southern, pharmaceutical industry.Unlike the major pharmaceutical manufacturers in the developed world, manufacturers in theBRICS countries, like Ranbaxy or Dr. Reddys Laboratories in India or Zhejiang HuahaiPharmaceutical in China, are less likely to be bound by a business model that focuses on thedevelopment of a blockbuster drug. 106 As a result, pharmaceutical companies in the BRICS

countries may be able to devote energy to the development of drugs for neglected diseases.These companies may also be more eager to develop traditional medicines or drugs that arecompatible to such usage. 107 Thus, by linking the BRICS countries with other less developedcountries that have insufficient or no manufacturing capacity, the partial alliances will make theindigenous development of pharmaceuticals feasible and financially attractive. They will enablea more efficient and effective supply of the needed medicines.

If regional alliances are set up such as through regional economic integration, theinstitution of regional organizations, mutual recognition systems, regional procurement systems,the facilitation of regional cooperation in research and development, and the creation of regionalcompetition enforcement mechanisms there may be even more benefits. 108 As Sisule Musunguand others have noted in a South Centre study:

From an economic and public health standpoint, a regional approach can provide incentivesfor establishing or developing regional pharmaceutical production and help expand researchcapabilities. In addition, higher effective demand for the same medicines due to climaticconditions and other geographical reasons, as well as cultural aspects, will result in lowerconsumer drug prices due to increased economies of scale in procurement and distribution.Other important benefits include: the costs associated with adapting medicines to the regionmay be offset/lowered due to increased economies of scale; stronger local technologicalcapacities/domestic innovation resulting from the pooling of adequate resources includingfinancing, and human capital and physical capital will be stimulated. Finally, a regionalapproach can also help to improve cross-border disease control. 109

Indeed, as Amrita Narlikar observed, [i]n some ways, coalitions that utilize regionalism as aspringboard for bargaining may be seen as natural coalitions. 110 Those coalitions are likely to be more harmonious than issue-based or ad hoc coalitions.

Moreover, as Robert Bird and Dan Cahoy pointed out recently, the creation of alliancesamong less developed countries will help many less developed countries combat the external

pressure each country will face on a one-on-one basis from the United States, the EuropeanCommunities, or other powerful trading partners. As Professors Bird and Cahoy noted:

106 See Yu, The International Enclosure Movement , supra note 7, at 842 43.107 See id . at 900 (noting the importance of exploring alternative proposals that can be compatible with existing treatments in less

developed countries, such as t he use of traditional medicine); Obijiofor Aginam, From the Core to the Peripheries: MultilateralGovernance of Malaria in a Multi-Cultural World , 3 C HI. J. I NTL L. 87, 93 (2002) (Ethnomedical knowledge of plants by indigenous

people across societies an d cultures has long served as [a] crucial source[] of medicines either directly as [a source of] therapeuticagents, as [a] starting point[] for the elaboration of more complex semi- synthetic compounds or as synthetic compounds.); Nitya Nanda& Ritu Lodha, Making Essential Medicines Affordable to the Poor , 20 W IS. I NTL L.J. 581, 586 (2002) (In developing countries, up to80 percent of the population relies on traditional medicine to meet its health-care needs. Such medicine is not only affordable, but it isalso widely available and trusted.).

108 For a comprehensive discussion of these regional initiatives, see M USUNGU , VILLANUEVA & BLASETTI , supra note 9. 109 Id . at 35 36.110 NARLIKAR , supra note 78, at 155.


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Through the use of a collective action mechanism, it may be possible for a country with acertain level of immunity to share the protection with one or several countries moresusceptible to FDI economic retribution. The use of coordinated behavior may bring about amore equitable result, so long as one is aware of the legal limits of such mechanisms and theanti-coordination strategies that may be employed by opponents of the system. 111

Indeed, as they acknowledged in another article, if the rarely -used TRIPS article 31 bis [-basedwaivers] become[] more widely applied, the[] BRIC members have a good opportunity to

become significant playe rs.112

In addition, many of these countries notably Brazil and India, and gradually China have been active participants of the WTO dispute settlement process. 113 As of January 1, 2008,Brazil has served as a complainant in twenty-three disputes (including one on patent rights ininventions made with U.S. federal assistance) 114 and as a respondent in fourteen disputes(including one on the local working requirement in the Brazilian patent system). 115 India hasserved as a complainant in seventeen disputes and as a respondent in nineteen disputes (includingtwo disputes on the mailbox system). 116 China, the new comer, has served as a complainant in

two disputes and as a respondent in eight disputes (including the most recent one overintellectual property enforcement). 117 In light of their repeated participation in the WTO disputesettlement process, Brazil, India, and China will have considerable knowledge and expertise thatcan be shared with other less developed countries. By making strategic use of such knowledgeand expertise, countries within the coalition or partial alliances can better defend their laws and

practices before a WTO dispute settlement panel, explore the flexibilities provided by the TRIPsAgreement, or even challenge non-compliant laws in developed countries.

Finally, if the partial alliances are supported by framework agreements that includedetailed and concrete technology transfer provisions, those alliances may satisfy the needs ofmany less developed countries. Since their emergence as independent countries after the SecondWorld War, less developed countries have made repeated calls for the transfer of technologyfrom their developed trading partners. These calls, unfortunately, have been met with limitedsuccess and usually result in the creation of vague, hortatory, and often preambular language ininternational intellectual property, trade, and investment agreements.

Article 66 of the TRIPs Agreement, for example, requires developed countries to provideincentives for their businesses and institutions to help create a sound and viable technological

base in least developed countries by promoting and encouraging transfer of technology. 118 However, it is unclear how least developed countries can enforce article 66, even with the

111 Bird & Cahoy, The Impact of Compulsory Licensing , supra note 9. 112 Bird & Cahoy, The Emerging BRIC Economies , supra note 20, at 421 (footnote omitted).113 For a detailed assessment of the participation of Brazil and India in the WTO dispute settlement process, see William J. Davey,

The WTO Dispute Settlement System: The First Ten Years , 8 J. I NTL ECON . L. 17, 40 45 (2005) [hereinafter Davey, WTO DisputeSettlement System ].

114 Request for Consultations by Brazil, United States US Patents Code , WT/DS224/1 (Feb. 7, 2001).115 Request for Consultations by the United States, Brazil Measures Affecting Patent Protection , WT/DS199/1 (June 8, 2000).116 Panel Report, India Patent Protection for Pharmaceutical and Agricultural Chemical Products , WT/DS50/R (Sept. 5, 1997);

Panel Report, India Patent Protection for Pharmaceutical and Agricultural Chemical Products , WT/DS79/R (Aug. 24, 1998).117 Request for Consultations by the United States, China Measures Affecting the Protection and Enforcement of Intellectual

Property Rights , WT/DS362/1 (Apr. 16, 2007).118 TRIPs Agreement, supra note 2, art. 66(2).


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assistance o f the mandatory WTO dispute settlement process. Likewise, [a]lthough the DohaDeclaration is full of verbal commitments and plans for capacity building, it is silent about howto fund the ambitious technical assistance programs. Furthermore, its legal n ature as a work

program is vague. 119

Finally, one may recall the demand by some less developed countries to focus on thedevelopment of local manufacturing capacity during the discussion of solutions to implementing

paragraph 6 of the Doha Declaration. 120 These demands created tension within the lessdeveloped world. While the African Group believe[d] that the ultimate solution to the

paragraph 6 problem [wa]s to build domestic manufacturing capacity and that this should beexplicitly agreed and mentioned in the solution, 121 other less developed countries, like Braziland India, already had manufacturing capacity and therefore believed otherwise. Fortunately forthe less developed world, the two groups were able to set aside their differences and joinedtogether to battle the developed world. Their cooperation made great pragmatic sense. After all,those countries that lack manufacturing capacity are likely to continue to import new drugs fromcountries like Brazil, India, and China for a number of years while working to develop their own

production capacity. 122

Compared to the TRIPs Agreement or other existing arrangement in the internationaltrading system, partial BRICS alliances are likely to result in the transfer of more technologyfrom the BRICS countries to other less developed countries. Because of the lower overalleconomic disparity between the BRICS countries and other less developed countries and thestrong likelihood that a large segment of population in the BRICS countries live in similarconditions as those living in other less developed countries, BRICS countries will more readily

provide assistance to other less developed countries either because they understand better the plight of their less developed partners or because the BRICS government leaders have to respondto political constituencies that are sympathetic to the plight of other less developed countries.

So far, there have been only a few reported initiatives on South -South technologytransfer. 123 While Thailand offered to help Ghana and Zimbabwe to set up factories to produceantiretrovirals used in treating HIV/AIDS, 124 Brazil . . . offered a cooperation agreement,including technology transfer, to developing countries for the production of generic ARVdrugs). 125

In recent years, China has also been very active in initiating trade agreements withmembers of the ASEAN (Association of Southeast Asian Nations), with the goal of creating theChina-ASEAN Free Trade Area. 126 China is also exploring greater economic cooperation with

119 Cho, supra note 45, at 226.120 See Frederick M. Abbott, The WTO Medicines Decision: World Pharmaceutical Trade and the Protection of Public Health , 99

AM. J. I NTL L. 317, 334 (2005) [hereinafter Abbott, WTO Medicines Decision ].121 Communication from Kenya, Elements of a Paragraph 6 Solution , IP/C/W/389, 15(a) (Nov. 14, 2002).122 Cf . Abbott, WTO Medicines Decision , supra note 120, at 334.123 Rovira, supra note 82, at 235.124 See id .125 t Hoen, supra note Error! Bookmark not defined. , at 32.126 See BERGSTEN , GILL, LARDY & MITCHELL , supra note 47, at 114.


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India, with the hope of eventually developing a regional trade agreement. 127 In addition, itsefforts in Africa have earned considerable goodwill and soft power. 128 Some commentators,however, have questioned the underlying intentions of these efforts, 129 while others pointed outthat many of the agreements sought to respond to Chinas WTO accession agreements, ratherthan to increase the collective bargaining position in the less developed world. 130

In sum, partial BRICS alliances, if structured properly, will possess many attractivefeatures. They not only will provide less developed countries with the additional support againstdeveloped countries, but will also help ensure greater access of essential medicines in thesecountries. By helping less developed countries build their capacity through technology transferand technical assistance, these partial alliances may also provide a long-term solution to theaccess-to-medicines problem a solution that has been craved by the African Group from the

beginning of the Doha Round.

There are still remaining challenges, however. For example, because the BRICScountries are more powerful and possess more human capital and technical expertise, they maystructure the alliances in a way that would allow them to dominate or exploit their much weakerand dependent alliance partners. How can safeguards be built into the alliances to protect weakermembers? How can trust be developed so that all alliance members can work together closelywithout worrying about the potential exploitation of weaker members by stronger ones?

One may still remember the remark by PhRMA representative Tom Bombelles thatSouth Africa was a pawn used by India and Argentina to undermine TRIPS. 131 Although thisremark sought to shift[] the focus [unfairly] away from the enormous health crisis in Africa, 132 it does signal a problem when the debate becomes whether the BRICS countries or the developedcountries will be able to sell medication to other less developed countries. After all, the generic

pharmaceutical industries in the BRICS countries are likely to benefit from the continued lack ofmanufacturing capacity in other less developed countries. They may even lobby against effortsto transfer technology from the BRICS countries to other less developed countries (although theymay not achieve as much success as their patent-based counterparts in the developed world). 133

Moreover, in many areas of international trade, medium -income developing countrieswhich have gained relatively more than their poorer counterparts from the multilateral trade

process have increasingly found themselves adopting positions divergent from those of [their

127 Jim Yardley, Indian Leader in China Urges Closer Ties , N.Y. TIMES , Jan. 16, 2008, at A8. For interesting discussions of U.S.-China relations, see R AMESH , supra note 46; W AHEGURU PAL SINGH SIDHU & JING DONG YUAN , CHINA AND I NDIA : COOPERATION ORCONFLICT ? (2003).128 See JOSHUA K URLANTZICK , CHARM OFFENSIVE : HOW CHINA S SOFT POWER IS TRANSFORMING THE WORLD (2007).

129 For a discussion of Chinas activities in Africa, see CHRIS ALDEN , CHINA IN AFRICA : PARTNER , COMPETITOR OR HEGEMON ?(2007); H ARRY G. BROADMAN , AFRICA S SILK R OAD : CHINA AND I NDIA S NEW ECONOMIC FRONTIER (2007).

130 As one commentator noted: China . . . appears to be developing an interesting strategy consisting of pressing for regional freetrade agreements, not so much as a way to improve its bargaining capacity, but rather to foster its case for market economy status, acrucial element in anti- dumping actions. Rolland, supra note 62, at 498.

131 Halbert, supra note 61, at 267.132 Id . at 267 68.133 For discussion of why the BRICS alliances are conductive to technology transfer from the BRICS countries to other less

developed countries, see text accompanying supra note 123.


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poorer counterparts] on the question of preferential access to rich country markets. 134 If historyrepeats itself, the BRICS countries eventually will want stronger intellectual property protectiononce they become economically developed. As a result, the interests of other less developedcountries may become quite far apart from those of the BRICS countries, just as these interestscurrently are from those of the developed world. This development is indeed quite plausible.

After all, most policymakers and development experts would rather design policies that enable some less developed countries to catch up economically and become more advanced than policies that would ensure all less developed countries stay economically weak andtechnologically backward.

While it remains unclear whether the growth of the BRICS countries will present aconcern down the road, the analysis of both the economies of the BRICS countries and the

positions they have been taking at the international level seem to suggest that the interests of theBRICS countries and other less developed countries are quite close at present. Because of the

potential for increased bargaining leverage, greater technology transfer, and active technicalassistance, BRICS countries can serve as worthy allies at least until their interests grow furtherapart from those of their less developed partners. The important question for the weaker partnersat the moment, therefore, is how they can take advantage of the alliances when the interests ofthe alliance members are still close to each other to build up their manufacturing capacity and toshape the international intellectual property system in a way that would better advance theirinterests and protect their negotiation agendas.

IV. COORDINATION STRATEGIES

To highlight the role that the BRICS coalition or partial BRICS alliances can play in theinternational intellectual property debate, this Part discusses four coordination strategies throughwhich less developed countries can work together to strengthen their collective bargaining

position, influence negotiation outcomes, and promote effective and democratic decisionmakingin the international intellectual property regime. These strategies include (1) the initiation ofSouth-South alliances; (2) the facilitation of North-South cooperation; (3) joint participation inthe WTO dispute settlement process; and (4) the development of regional or pro-developmentfora. These strategies will allow less developed countries to articulate more coherent positionsor even establish a united front. They will also help less developed countries establish a

powerful voice in the international debates on public health, intellectual property, andinternational trade. In doing so, less developed countries will be able to develop treaties and

policies that promote access to essential medicines in the less developed world.

access to medicines brics alliance

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