HIV/AIDS, Trade, and Patent Protection -- An Introduction 

Developing nations need to choose between staying in compliance with international trade rules and dealing with the HIV/AIDS epidemic by providing locally produced and thus low cost drugs, or buying them from the United States and other developed countries. Exporting goods to developed countries has been very important for China and many other developing countries. On the other hand, the World Trade Organization (WTO), dominated in its decision making process by the United States and other developed countries, has extended trade rules to patent protection. Developing countries previously existed with limited enforcement measures of patent, including copyright, protections.  But the cost of HIV drugs produced in developed countries is astronomical for developing countries. There are two principal reasons. First is the vast difference in per capita or family income levels between poor and rich countries. U.S. median family income is about $35,000, while in poor developing countries it is approximately $2,000.  Thus, there is an income differential of at least 15 times between poor developing countries and developed ones, leading to very high prices for developed country goods from the developing country point of view. Second, drug companies, by virtue of patent protection, can charge very high/monopolistic prices for drugs for which they have patents.

There are provisions for relaxing patent provisions in the case of need, but the U.S. government, allied with, and prodded by, its pharmaceutical manufacturers, has fought such relaxation every step of the way. The key and major  battle was over Brazil's right to produce anti-retroviral drugs which dramatically inhibit the progression of HIV to AIDS. (See a Human Rights Watch article on this issue). Thus, China and other developing countries face a dilemma: to produce or import low cost anti-retrovirals to keep their citizens alive, which may well then bring trade retaliation from the developed countries. The final point to remember is that patents, and patent protection, were introduced in the United States and elsewhere, with the aim of benefiting human beings, not augmenting the rights of corporations.  The thought was that some 17 years of patent protection would provide the stimulus for greater innovation.  Thus, the key question, as we face the deaths of many tens of millions, is, how do we protect these people? We believe that sales in developed countries are much more than sufficient to recoup research costs.

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