Canada sets an example on patent reform

Last week's welcome announcement by the Canadian government that it plans to alter its patent laws to allow the export of cheap anti-AIDS drugs to developing nations needs to be followed by other countries, and echoed in other actions.

In the 1950s and 1960s, spurred by the enlightened leadership of then Prime Minister Lester Pearson, Canada blazed a pioneering trail on the international scene by making support for developing countries a high priority of its foreign policy. In the intervening period, some of the moral capital that this position generated has been dissipated as a result of changing governments, shifting domestic priorities, and economic difficulties. Reflecting these shifts, the country dropped from sixth to 16th on the global scale of development aid as a proportion of total public spending.

For the past few years, however, the Liberal government of Jean Chrétien has signalled a clear desire to pick up Pearson’s torch again. This has been reflected, for example, in the country’s championing of development issues in general – and concern about HIV/AIDS in Africa in particular – within the G8 group of leading industrialised nations, most clearly in evidence at last year’s summit meeting in Kananaskis. The most recent manifestation of this desire to regain moral leadership on development issues has been the government’s announcement of its backing for a parliamentary bill that would change the country’s patent laws to allow the export of generic anti-AIDS drugs.

There is a certain element of self-interest in this; Canada already has a powerful generics pharmaceutical industry that is well placed to meet the new export opportunities that would open up as the result of such a move. Furthermore, as many (particularly those in the pharmaceutical industry) have pointed out, the problem of providing adequate care for HIV/AIDS sufferers in Africa is not going to be resolved just by making cheap drugs available. Equally necessary is the infrastructure required to ensure that these drugs reach those who need them most – and that these individuals are subsequently enabled to follow the full course of treatment that allows such drugs to become effective.

Nevertheless Canada’s move sets a welcome example to the rest of the developed world about the type of actions that need to be taken not only on AIDS, but in a wide variety of areas where current intellectual property regimes do not always act in the best interests of the developing world. It has even generated respect, albeit grudgingly, from the United States – the strongest opponent of international reforms of the system – whose trade representative, Robert Zoelleck, described the move as “a very fine step”. Hopefully it will persuade other countries to make equally bold political moves to shift this system on to a more equitable basis.

WTO agreement

The trigger for Canada’s move was a decision taken by the World Trade Organisation (WTO) in August. This was an agreement on the terms under which countries facing medical emergencies, and unable either to afford the full price of medicines required to address them or to produce such medicines themselves, should be permitted to import generic versions from elsewhere (see A deal on drugs is only the first step).

All members of the WTO eventually signed up to this commitment, which the United States in particular had strongly resisted, concerned that such drugs will find there way back to markets where they would undercut the patented products marketed by large pharmaceutical companies. But Canada is the first to have agreed to implement the commitment in its national legislation.

Partly this has been a response to recent urgings by the UN special envoy for HIV/AIDS, Stephen Lewis – himself a former senior Canadian politician – for greater efforts by governments to avoid an AIDS catastrophe in Africa. In that context, the Canadian move has already been warmly welcomed in Africa itself. “You’re going to have a reduction of people being cared for in their homes because they’re going to be standing up and walking,” one counsellor in the Zambian capital of Lusaka has said, applauding the Canadian decision move “not only for people living with HIV, but for the whole country”.

Another factor has been the willingness of Canada’s pharmaceutical industry not to oppose the move by its politicians. The Canadian Research-Based Pharmaceutical Companies group has agreed to work with the government to make generic versions of patented anti-AIDS drugs available. This response contrasts sharply with that from the International Federation of Pharmaceutical Manufacturers Associations, whose director-general, Harvey Bale, was quoted in one Canadian newspaper as saying that the Canadian initiative “won’t change a thing”.

A third factor has been an explicit indication by senior Canadian politicians that they are keen – for both commercial and political reasons – to be taking on the challenge of reducing the costs of drugs in developing countries. In a speech last month to the Board of Trade of Metropolitan Montreal, Paul Martin, who is expected to become Prime Minister when Chrétien steps down next February, described as “unacceptable” the fact that there is a lack of funding to complete clinical trials for many potential remedies for some of the worst diseases in developing countries. “Why not develop a specific, and perhaps commercial, expertise here in Canada and create new technologies, new therapies and new services that can be taken advantage of by developing countries?” he asked.

The challenges of implementation

Canada’s success in pursuing its unilateral initiative is not necessarily guaranteed. Critics have already pointed out, for example, that an effort to change the law in this area, even if it complied with the August WTO agreement, may still fun foul of other agreements that the country has signed up to. One of these could be the rules of the North American Free Trade Association (NAFTA). For the time being, for example, both the United States and Mexico have agreed not to press claims that the Canadian move could contravene NAFTA. But this could prove to be a fragile truce.

Nevertheless the hope in the international aid community is that the Canadian initiative will be seen as an inspiration, not a threat, by governments elsewhere. Pressure groups such as Médicins Sans Frontières, which have been at the forefront of those arguing that, even if cheap retroviral drugs are not going to solve the AIDS crisis in Africa they will still go a long way towards mitigating its impact, are already demanding similar provisions be applied to drugs to treat other diseases. “We can’t deny affordable medicines to people because their disease or their health condition is not on the approved list of the Canadian government,” says one Canadian activist.

Others are concerned that, if excessive compromises to Canada’s political ambitions are made during the process of translating these ambitions into practical legislative measures, there is a danger that these could result in restrictions that would blunt its impact. A group of US, African and European advisory groups, for example, has released a statement urging politicians to ensure that the amendment to their patent legislation “is not limited to use in situations of emergency” or to specific diseases.

There will inevitably be some such compromises on the way to the statute book; it would be naïve to believe that one country can easily fly in the face of a complex web of international commitments that already surround intellectual property issues. Nevertheless even with such limitations, the Canadian move is one that other countries should rapidly strive to emulate, and it should also encourage a similar approach to the production of generic vaccines and diagnostic tests. Canada has shown the way forward; it’s up to others to take up the challenge of following down the same path.