Last year the Thai government announced it would invoke a portion of the Trade Related Intellectual Property Rights Agreement (TRIPS) what allows compulsory licensing under special conditions, and replace Efavirenz, an anti-retroviral drug made by Merck, in its domestic market in order to switch to a Thai-made generic copy at half the price.
"Since then, Thailand has said it would overrule the patents on two more drugs, and it may soon add a further pair to the list. Moreover, other countries have followed its lead. Brazil declared last month that Merck was charging too much for Efavirenz. In recent weeks the health ministers of India, Malaysia and Kenya have also muttered about pursuing compulsory licensing."Generic drug manufacturers, especially those in India, are reported to be pleased by this trend which is expected to create important new markets for their products.
Pharmaceutical companies not only pay dividends from their profits, but utilize a portion for research and development of new products. If they do not profit adequately from drugs created for developing country markets, they will stop investing in development of new products for those markets. Thus developing countries that are licensing drugs to generic producers to save money in the short run may be reducing the rate of technological progress that would benefit the people of developing nations in the long run.
The article points out that it is the newly industrializing countries such as Thailand and Brazil that are leading in this tread, although they are more capable of financing the purchase of the proprietary products from their patent right holders. It also notes that development assistance funding sources are available that might make the more expensive drugs available to the poor.
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