Rising Powers, Emerging Markets: Implications of Multipolarity for Intellectual Property

Rules, Access to Medicines and Global Health

 

By Suerie Moon, MPA, PhDSchool of Public Health & Kennedy School of Government, Harvard University

Global Health Diplomacy Network Conference Chatham House, London, 28 June 2011

Overview

1. Introduction2. 1999-2010: How have middle-income countries 

(MICs) shaped global IP rules for health?3. 2011-?: How will MICs shape the future global IP 

regime? 4. Access to medicines for NCDs5. Conclusions: the challenge for global health 

diplomacy

1. Introduction: North-South politics of intellectual property

• Pre-1994 international patents regime: – Flexible, with policy space for tailoring to country context

• 1994 WTO TRIPS* Agreement– Harmonized to Northern standards, – Reduced flexibility, shrank policy space re: medicines patents

– Critique: patent monopolies  medicines prices ↑– Critique: no R&D into diseases of the poor– Political bargain: IP protection for market access

• North-South divide

* World Trade Organization Agreement on Trade Related Aspects of Intellectual Property Rights

1. Introduction: North-South politics of access to medicines

The Access to Medicines Crisis:• 1999-2001: global social reaction against TRIPS, triggered by HIV pandemic and high drug prices

• 2001: WTO Doha Declaration: health before patents• 2002-2010: increased access to HIV medicines via more flexible approach to patent rules

• By 2011, increased flexibility in:– Formal international law– Formal national laws– Informal rules and norms– Practices by governments (North & South) & companies

Figure 2. Overall ARV market share (volume) for Indian generic, non-Indian generic, and originator (brand) manufacturers, 2003-2008

39%

80%

64%

83%88% 87%

1%

13%

3%3% 8%

61%

19% 23%14%

9% 5%

0%

20%

40%

60%

80%

100%

2003 2004 2005 2006 2007 2008

Ma

rke

t S

ha

re (

vo

lum

e)

Indian Generic Non-Indian Generic Brand

Figure 4. Countries reporting purchases of Indian generic ARVs in 2008

Countries reporting purchase of Indian-produced generic ARVs in 2008

Source: Waning, Diedrichsen, and Moon (2010)

Generic Competition and HIV Treatment Scale-Up

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010$0

$100

$200

$300

$400

$500

$600

$700

$800

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

People in LMICs on treatment Lowest generic price first line ARV regimenOriginator price of first-line ARVs

$10,400$2700

Source: Medicines Patent Pool, June 2011

2. How have MICs shaped global IP rules for health?: Strategies & Roles

• Which countries?: Argentina, Brazil, Ecuador, India, Indonesia, Kenya, Malaysia, Philippines, South Africa, Thailand, Zimbabwe, others

• Re-framing of IP from economic to social issue: – 1998: South Africa and World Health Assembly– 2001: Brazil & UN Human Rights Commission

• Mobilization of normative power via global CSO networks• Mobilization of expert power via global expert networks• Exercise of state regulatory power

– 2002, 2007, 2009 South African Competition Commission

• Domestic factors in key MICs:– Civil society, Parliament, generics industry, Constitutional right to health

• Multipolarity: MICs growing economic & political power

Economic power shifts

Changes in export markets:

US EU-27 Industrialized China Developing0%

10%

20%

30%

40%

50%

60%

70%

Brazil

20012009

US EU-27 Industrialized China Developing0%

10%

20%

30%

40%

50%

60%

70%

India

20012009

Economic power shifts

Changes in export markets:

US EU-27 Industrialized China Developing0%

10%

20%

30%

40%

50%

60%

Thailand

20012009

US EU-27 Industrialized China Developing0%

10%

20%

30%

40%

50%

60%

70%

South Africa

20012009

TRIPS-Related Disputes at the WTO DSB (1995-2010)

North complaint against North (N-N) 17North complaint against South (N-S) 1996: US vs Pakistan 1996: US vs India 1996: US vs Indonesia 1997: EU vs India 1999: US vs Argentina 2000: US vs Argentina 2000: US vs Brazil 2007: US vs China 2008: EU vs China

9

South complaint against North (S-N) 2001: Brazil vs US  2010: India vs EU  2010: Brazil vs EU

3

Total TRIPS-related Disputes at WTO DSB (1995-2009) 29

3. How will MICs shape the future global IP regime? 

1999-2010: North v South• Re-framing of IP rules• Normative claims & shift• Mobilization of CSOs and 

expertise• Rise of multipolarity• Coattails effect for LICs/LDCs

2011- ?: Multipolar System• IP rules re-framed as social issue• Normative shift consolidating• Experts & CSOs networked• MICs ↑ economic power• MICs ↑ power in global rule-

making• R&D capacity in some MICs ↑• MICs as emerging markets ↑• Health demands in MICS ↑• Demands for global R&D

burden-sharing ↑

Which way for the MICs on IP?

R&D capacity in some MICs

↑

MICs as emerging markets ↑

Pharm industry consolidation

Demands for global R&D

burden-sharing

MICs ↑ economic power

MICs ↑ as global rule-makers

MICs ↑ health demands

Limited R&D capacity in most

MICs

Demands for global R&D

burden-sharing

Stringent(eg TRIPS+, lengthened or strengthened monopolies)

Flexible(eg compulsory licensing,

strict patentability standards)Domestic Political Contests

4. Access to medicines for NCDs in MICs

“Double burden of disease (CDs+NCDs)” in MICs ↑Demand for healthcare & coverage ↑

NCD drugs w therapeutic advance = demands for access (price ↓)NCD drugs = market growth for industry (price ↑)

Short-Medium Term  Political Conflict: North + Patent-based industry vs MICs

TRIPS Political Bargain Under Increasing StrainMedium-Long Term  ?

4. Access to medicines for NCDs in HICs

Demand for healthcare & coverage ↑NCD drugs w therapeutic advance = demands for access (price ↓)

NCD drugs = market growth for industry (price ↑)

Medium-Long Term  ?

5. Conclusions: The Challenge for Global Health Diplomacy

Short-Medium Term:• Identifying solutions to access problems Medium-Long Term: to negotiate new global rules & institutional 

arrangements for:• Equitably sharing the global burden of financing medical R&D• Ensuring widespread, global access to new medicines • Providing sufficient, predictable resources for innovation that meets 

priority health needs• Investing resources efficiently• Amending or re-negotiating global rules that do not deliver the above.

Ongoing: WHO Consultative Expert Working Group on R&D

5. Conclusions: Implications for the future

1. MICs can increasingly challenge IP rules that favor the North  some protection for health gains & for LDCs/LICs

2. Domestic political contests in MICs over defining national interest; will health have a voice?

3. Ongoing North-MICs political conflict in foreseeable future4. MICs will face growing expectations to contribute to R&D 

that benefits other/all countries. 5. MICs can shape alternative global arrangements for ensuring 

sufficient financing, equitable access, and needs-driven R&D6. Challenge for all diplomats: negotiate a better global system 

for medical innovation & access in LICs, MICs, and HICs

Thank YouComments welcome at: smoon@hsph.harvard.edu