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The
TRIPS (Trade related aspects of Intellectual Property
Rights) agreement was discussed during the Uruguay round
of GATT (General Agreement on Tariffs and Trade)
negotiations. The TRIPS agreement covers a range of
Intellectual Property issues. The Uruguay round of GATT
negotiations was used by developed countries to
introduce a number of issues that were not considered
part of trade negotiations and one of these issues
included, introduction of patent system and other forms
of Intellectual Property Rights. Before the Uruguay
round of GATT negotiations many countries had not
granted patent protection for pharmaceutical products.
These countries include developed countries such as
Spain and Portugal and many developing countries such as
India, Brazil, Mexico, Egypt. These countries were
reluctant to extend patent protection to pharmaceutical
products. For almost 3 years, from 1986 until May 1989,
developing countries refused to negotiate an agreement
on intellectual property. The controversy over the
agreement on TRIPS heightened when Arthur Dunkel, the
then Director-General of the GATT in December 1991
submitted a complete draft accord to help negotiators
concentrate on final text of the draft. During the
Uruguay round of negotiations between 1986 and 1993, the
strategy of some of the developing countries was
concentrated on limiting the expansion of the TRIPS
agenda. Before the TRIPS agreement, countries had more
flexibility in excluding certain sectors of the economy
from patent protection in their national laws. It
appears that the inclusion of TRIPS on the agenda of
Uruguay round was a last minute political compromise and
TRIPS featured as a footnote on a crowded agenda of the
Uruguay round of negotiations. It has been said that the
text of TRIPS agreement was originally formulated by the
pharmaceutical multinational companies of major
developed countries and was presented and pushed by the
governments of the respective countries. Ultimately,
after several round of negotiations, countries agreed to
adopt standards set out in TRIPS agreement, which
culminated in 1994 and set the way for establishment of
World Trade Organization (WTO). India, along with other
developing and underdeveloped countries, became a member
of WTO. India signed the GATT on 15 April 1994, thereby
making it mandatory to comply with the requirements of
GATT, including the agreement on TRIPS.
Multinational pharmaceutical companies (MNCs) spend
billions of dollars in research and development (R&D) of
new medicines every year and also generate data on
clinical aspects of medicine which needs to be submitted
to regulatory agency for getting marketing approval. The
marketing approval of drug is based on the outcome of
the clinical trials and ratio of benefits to risks. If
risks outweigh the benefits, the drug is not marketed
and company loses large sum of money. When a company
invests money for development of a new drug, it would
expect to recover investment from sale of medicines
without fear of competition. Patents provide a strong
incentive to pharmaceutical companies to invest in R&D.
Contrary to this, it is argued that patents create a
barrier for accessing medicine in developing countries
due to high cost of product and market monopoly enjoyed
by the pharmaceutical companies with regard to patented
medicines. The opponents of patents argue that many life
saving medicines and medicines for AIDS and cancer are
out of reach of patients in developing countries due to
patent protection enjoyed by MNCs.
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