The protection of intellectual property rights (IPR) is often the most controversial issue in any free trade agreement, in particular when it relates to drug patents.

Developing and developed countries often have very different opinions on drug patent issues. Developed countries often advocate a strong regime for patent protection because many of their businesses are patent “owners.” Developing countries, on the other hand, often resist demands for a stronger patent regime simply because they have neither the financial resources nor the required technical capacity to innovate and so are mainly patent “users” rather than patent “owners.” Also, with lower per capita income, developing countries can ill afford to buy expensive patented products.

drug pile
The protection of intellectual property rights (IPR) is often the most controversial issue in any free trade agreement, in particular when it relates to drug patents.

A number of years ago, developed countries were successful in pushing a multilateral agreement that establishes the minimum level of protection for IPR for all member countries of the World Trade Organization (WTO). That agreement is known as the Trade-related Aspects of Intellectual Property Rights (TRIPS); it was adopted in 1994 at the end of the negotiations on the Uruguay Round of the General Agreement on Trade and Tariffs (GATT). Because ratification of TRIPS is compulsory for all WTO members, any country seeking to obtain easy access to the numerous international markets opened by WTO must enact the strict intellectual property laws mandated by TRIPS. For this reason, TRIPS is the most important multilateral instrument for the globalization of intellectual property laws.

Thailand has been engaged in trade negotiations with developed economies, namely the European Union and the United States, which demand that Thailand strengthen its protection regime for IPR. This report examines the possible implications of an increase in the level of protection for drug patents as proposed in various free trade agreements (FTAs). It is aimed at assisting relevant organizations in establishing an appropriate position and formulating strategies in the negotiating process.

This report will also assess the overall efficiency of the Thai pharmaceutical industry and propose policy recommendations that could help to promote better accessibility to pharmaceutical drugs. This article is divided into 10 sections, including this introduction. The second section reviews the domestic and international rules and regulations governing the regime of drug patents. The third section summarizes the substantive provisions governing patent protection in the draft Thailand-United States Free Trade Agreement (TUSFTA) and the Thailand-European Union Free Trade Agreement (TEUFTA).

The fourth section explores in depth the three most important issues concerning the protection of drug patents in these agreements, namely the protection of clinical test data, the extension of the patent protection period, and the establishment of a linkage between the patent status of a drug and its registration. The fifth section identifies the potential costs and benefits associated with a stronger regime for drug patents. The sixth section examines in specifics the implementation of compulsory licensing, to which Thailand resorted in an attempt to curb the spiraling costs of state health insurance schemes.

Section seven then weighs the potential costs and benefits associated with compulsory licensing. Section eight examines the structure of the Thai pharmaceutical industry in order to identify whether there is sufficient competition in the market to ensure reasonable prices for drugs. The ninth section prescribes a regulatory regime for drug prices that would be required to protect consumers against excessive pricing. Finally, the tenth section assesses the overall condition of the current system of drug patents in Thailand and proposes a set of policy recommendations that could help to promote better access to pharmaceutical drugs.

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