The Guardian 2 November, 2005

Profit put first in bird flu battle

A number of countries in Asia and south-eastern Europe are experiencing outbreaks of avian influenza (bird flu) affecting mainly poultry (chickens, ducks, geese and turkeys). The virus responsible for the current outbreak is H5N1 a type of influenza not normally associated with human disease. But as the World Health Organisation and governments work to find solutions and bring the problem under control, drug giants such as Roche and GlaxoSmithKline are determined to make a profit killing.

In the United States, even some conservative Republicans have reacted against Roche's greedy grab for profits. The company was put under pressure there to increase production the Tamiflu antiviral drug and allow generic producers to increase the number of pills in circulation.

The senior Democratic Senator for New York, Charles Schumer, has accused Roche of "putting profits ahead of world safety". After threats of the introduction of legislation to force Roche to release its stranglehold on the patent the company relented slightly, announcing it would talk to four generic drug manufacturers about increasing production. It has now licensed the four companies to manufacture the drug.

So far 40 governments have placed orders with Roche for Tamiflu: any government ordering bulk amounts will have to wait a year before the order is filled.

In Australia GlaxoSmithKline has the exclusive rights to the production of the antiviral drug Relenza. The company says it "would have to look at the overall circumstances" before it would allow generic copies.

Patent laws grant exclusive rights over the manufacture and exploitation of products to the patent owner a minimum 20 years in World Trade Organisation member countries and up to 25 years in countries such as Australia, which allow patent term extensions.

Under conditions of monopoly supply, the patent holder determines the price and volume of production. Prices are set in relation to market conditions rather than production costs or the price at which the social benefit can best be optimised.

An article in the latest Medical Journal of Australia says that if there were no blocking patents the Australian Government could begin to explore the option of generic production immediately. "To secure certainty of supply the Government would have to find ways in which to make it commercially attractive for a generic company to invest in production", says the Journal.

"One way to assist a generic company to achieve economies of scale would be for the Australian Government to offer a company export assistance to those countries in Australia's region that were in need of a stockpile and that had little prospect of meeting that need. There would be much strategic wisdom in Australia helping neighbouring countries in this way."

The Journal points out that "if the manufacturers cannot meet demand at cost-effective prices" then there are "health, economic and ethical arguments for a 'government use' licence to be issued and for generic capacity to be developed and deployed rapidly in Australia."

Buddhima Lokuge and Peter Drahos, from the Centre for Governance of Knowledge and Development at the Australian National University, say Australia should do the following:

  • Announce that it will investigate the issue of compulsory licence and local manufacture;

  • Explore the possibility of exporting any generic surplus to neighbouring high- risk countries like Indonesia;

  • Express public support for countries in the region taking the compulsory licensing option and raise the issue of a coordinated approach to generic manufacture in the region.

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