Statement on TRIPs and Public Health

The August 30 WTO deal on exports of generic medicines successfully resolved one of the sticking points in the Doha Development Round. Negotiators must now move on to more important matters.

Poor people will benefit more from the removal of agricultural subsidies in rich countries and other restrictions on trade than by any further alterations to the TRIPS Agreement.

The main health problems in poor countries are:

• 4 billion cases of diarrhoea each year, resulting in 2.2 million deaths, most of them children under the age of five. The main causes of this are lack of access to clean drinking water, which affects over 1 billion people and lack of adequate sanitation, which affects over 2 billion people, the majority of them in Africa and Asia.
• Dirty water and poor sanitation are also a primary vehicle for other diseases, including intestinal worms, guinea worms, schistosomiasis, trachoma, cholera, typhoid, hepatitis A, and dysentery, which affect at least half a billion poor people.
• Another half-billion people suffer from water-related diseases, such as malaria and dengue fever.
• Indoor air pollution increases the risk of acute respiratory infections, and is one of the leading causes of infant and child mortality in developing countries.

The deal on medicines agreed on August 30 will do next to nothing to improve the health of the world¡¦s poor. Whilst the deal allows poor countries to import generic medicines under certain circumstances, this will have little impact on access to medicines.

For one thing, fewer than 5 per cent of essential medicines are on patent in poor countries. Secondly, as much as 50 per cent of the cost of medicines in some poor countries are tariffs and taxes ¡V these should be scrapped. Third, and perhaps most importantly, pharmaceuticals represent only 10 to 15 per cent of the costs of delivering medicines. Salaries and pensions often account for 75 per cent of costs.

The real problem is that governments in poor countries have imposed egregious restrictions on the ability of people in their countries to own and exchange property. This has undermined the development of effective markets in pharmaceuticals and encouraged the perpetuation of poverty and ill health.

Freeing up trade will enable the poor to sell their products and services. Combined with improvements in local conditions (stronger protection of property rights, the rule of law, and local freedom to trade), this will enable them to escape from poverty and improve their own health.
It is essential that trade ministers now move forward with the more important issues on the Doha Development Agenda.

Freeing up trade in agriculture, goods and services will do far more to improve the health of the world¡¦s poor than this deal on medicines. This apparent victory on health should not be allowed to divert attention from what is much more important.

Institute for Public Policy Analysis, Nigeria;

AInstituto Libertad y Desarollo, Colombia;

Inter Region Economic Network, Kenya;

Liberty Institute, India