Not long ago, life-saving medical know-how was viewed as belonging to everyone. What happened?
Even within the walls of the World Trade Organization, the Trade-Related Aspects of Intellectual Property Rights agreement, or TRIPS, is a paradox and a freak: a temple to monopoly inside the church of free trade.
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TRIPS is not the expression of a universal post–Cold War consensus, in the way the U.N. Declaration on Human Rights gave voice to human aspirations after World War II. It was born as a brute and profoundly undemocratic expression of concentrated corporate power—the work of “less than 50 individuals,” according to a U.S. trade official present at the creation. One of that official’s reluctant Indian counterparts, Prabhat Patnaik, has described the TRIPS affair as “a parody of the wildest conspiracy theory.”
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Intellectual property is not like other property. If you possess a cow, and someone steals it, you have lost your cow. If you discover a process that makes cow’s milk safer to drink, the possession of that knowledge by others does not reduce your store of it. In economic terms, knowledge is a “nonrivalrous” good. In Jefferson’s famous formulation, “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”
Because of this, the concept of intellectual property was resisted in Europe into the twentieth century. As late as 1912, Holland rejected patents and maintained what it called a “free trade in inventions.” This was consistent with the classical liberal doctrine established by Adam Smith and John Stuart Mill, both of whom were suspicious of patents. The nineteenth century’s most withering attacks on intellectual property were found not in left-wing journals but in the pages of The Economist, which advocated for the abolishment of the English patent system. “Before [inventors] establish a right of property in their inventions, they ought to give up all the knowledge and assistance they have derived from the knowledge and inventions of others,” suggested the magazine in 1850. “That is impossible, and the impossibility shows that their minds and their inventions are, in fact, parts of the great mental whole of society, and that they have no right of property in their inventions.”
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When medicines were added to this debate, there was no debate at all. Only in the early to middle decades of the twentieth century did the United States abandon an entrenched global taboo against exclusive property claims on medicines. In Europe, this taboo lasted another half-century. Switzerland, a pharmaceutical powerhouse, did not issue drug patents until 1977. As with every country before the advent of the WTO in 1995, it had little power to enforce these patents outside its own borders. Internationally, something like a Dutch-style free trade in medicines still reigned in the 1970s. But not for long.
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India’s Patents Act of 1970 was not as radical as it might have been. Modeled on the patent laws of Western Europe, it banned medicine product patents but allowed space for exclusive claims on methods related to their manufacture.
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In 1964, the world’s 134 poorest countries formed a negotiating block within the U.N. called the G77. In its politics and agenda, it overlapped with the countries of the Non-Aligned Movement, formed three years earlier to pursue an internationalist development agenda free from interference by either the Western or Eastern sides of the Cold War. The purpose of the G77 was to challenge the foundations of a world system dominated by its former colonial masters. The rejection of knowledge monopolies and patents, in particular, was a running theme in these efforts.
In the wake of India’s Patents Act, G77 countries began to adopt similar patent laws and development plans, weakening the power of foreign drug companies to enforce their will (and price lists) around the world.
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In the WHO, the G77 had the two-thirds majority needed to set policy. Its push for north-south medical technology transfer gained a powerful ally in 1973 with the appointment of Danish doctor Halfden Mahler as WHO director general. Mahler had spent a decade directing India’s tuberculosis program and supported the G77 agenda. At the 1977 WHO Health Assembly in Alma-Ata, Kazakhstan, Mahler unveiled an agency program to help poor countries reduce their drug spending by building up their domestic drug industries. The conference was capped with the adoption of an ambitious plan, known as the “Declaration of Alma-Ata,” to provide “health for all” by the year 2000. The declaration, like the WHO’s essential medicines program, committed the agency to the affirmation of “health as a human right based on equity and social justice.”
“The G77 was claiming the right to the kind of institutional capacity that would make it self-sufficient in a pandemic,
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As secretary of the Army in the Kennedy administration, Edmund T. Pratt Jr. brought a strategic view to the U.S.-Soviet military standoff. As CEO of Pfizer, he took a similar approach to the rise of a south-based generics industry and growing assertiveness by the G77. These developments threatened Pfizer’s ambitious plans for dominating global markets for drugs and agricultural products, especially in Asia. In the wake of the Alma-Ata conference, Pratt gathered a group of drug industry executives to discuss a plan.
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Pfizer was the natural candidate to lead an industry counterattack against the G77. Its bulldog patent lawyers were legendary for launching kamikaze infringement suits around the world. In 1961, the company sued the British government after the National Health Service purchased an Italian generic version of a Pfizer-patented antibiotic, tetracycline. Throughout Europe, where medicine patents were still widely banned, the suit served as a sobering introduction to the modern “postethical” U.S. drug industry. Editorials reminded readers that Pfizer owed its power to wartime contracts to produce penicillin, which had been discovered and developed at Oxford and left in the public domain.
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Fortunately for the drug industry, it wasn’t alone in fretting over the rest of the world’s rejection of intellectual property.* The south’s competing vision—shared by some developed countries—posed a threat to powerful interests driving the emergent high-tech information economy. A number of industries—entertainment, software, biotech, agriculture, semiconductors—began to see the world through pharmaceutical industry eyes. In Washington lobbying calls and Manhattan club lunches, leaders of industry began speaking of the need to establish a protective regime around U.S. technologies, from medicine to software.
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This was the button pushed by Barry MacTaggart, chairman of Pfizer International, in an op-ed that appeared in The New York Times on July 9, 1982, under the title, “Stealing From the Mind.” The piece unveiled the argument that industry and the U.S. negotiating team would pound home for the next four years until the start of talks in Uruguay.
Pratt saw the post-Vietnam, post–oil shock slowdown as a chance to reboot what industry insiders called “the drug story.” With the economy suffering a quadruple whammy—ballooning trade deficits, skyrocketing foreign debt, manufacturing flight, and stiffening competition from Europe and Japan—the companies rebranded the patent as a beleaguered symbol of American ingenuity and “competitiveness.” Nations that refused to recognize the authority of the U.S. Patent Office were rogue nations, pirate states, whose intellectual larceny threatened both factory jobs in Detroit and rising high-tech industries in Silicon Valley.
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With the crumbling of the Berlin Wall, the industry agenda, championed by the U.S. trade representative, was liberated from the last remnants of Cold War restraint. Within the GATT process, nations were hauled into side rooms and bullied by what the anti-TRIPS negotiators called “Black Room” consultations, according to interviews conducted by Drahos and Braithwaite. That year is when the U.S. trade representative began applying Special 301 with full force, opening investigations into five of the 10 “hard-liners” opposing TRIPS. India and Brazil, the leaders of the group, got the worst of it. Brazil broke first, after the U.S. imposed crippling tariffs on its imports. India held out a little longer, but by 1990 had also broken. Under the terms of TRIPS, the country had 10 years to dismantle and revise the 1970 Patents Act. When the news hit India, street protests against the government of Rajiv Gandhi broke out across the country.
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At the time of the signing ceremony, this trade-off was widely reported as fair and consensual. It was neither, but the consensual part seemed to stick. A dozen years later, as sophisticated a critic of TRIPS as Joseph Stiglitz would write, “as they signed TRIPS, the trade ministers were so pleased they had finally reached an agreement that they didn’t notice they were signing a death warrant for thousands of people in the poorest countries in the world.”
Except they did know. It’s the reason they fought as long and as fiercely as they did. It’s why Group of Ten negotiators called each other in tears when Brazil cracked, and why so many WTO ministerial meetings have been shrouded in tear gas. A lot of people understood perfectly well in 1994 that TRIPS was a mass death sentence. Now everybody else does, too.
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