America's anthrax patent dilemma

Bayer is tripling production to cope with demand

by BBC News Online's Emma Clark

The US government's battle to combat bioterrorism has presented it with an embarrassing predicament.

Should the pro-trade Bush administration override a patent held by German pharmaceutical company Bayer on an anthrax drug?

The US needs more drugs to combat anthrax

By waiving the Bayer patent, the US would be able to approach other companies to manufacture greater and cheaper supplies of ciprofloxacin, as the drug is known generically.

This would ease concerns that Bayer might not be able to produce enough ciprofloxacin to counter widespread anthrax attacks.

Government u-turn

However, any move to override the Bayer patent would represent a serious policy u-turn for the Bush administration.

Waiving patents would be a serious u-turn

The US has traditionally argued that drug companies need to be assured of the money from patents to plough into new research.

Just last summer, the US was planning to file a complaint with the World Trade Organisation (WTO) against Brazil for allowing the alternative production of patented Aids-treatment drugs.

In June it dropped the complaint, announcing that it preferred "to resolve trade disputes by seeking constructive solutions".

Aids dispute

US protectionism with regard to its domestic pharmaceuticals industry was also evident in a long-running dispute with South Africa.

Does the anthrax scare compare to Aids epidemics?

The US government was not involved in a failed court case brought by pharmaceutical companies against South Africa's government, but it had been involved in negotiations prior to the case.

The dispute began over the wording of South African legislation on producing generic copies of patented drugs in times of national emergency.

However, the court case soon became focused on South Africa's access to cheap anti-Aids drugs for the 11% of its population who are HIV positive.

Ambiguous rules

The disputes over reproducing patented drugs on the cheap arise from ambivalent clauses in WTO rules on intellectual property.

President Bush wants to make sure America's ability to deal with bioterrorism is as strong as possible

US Health Secretary Tommy Thompson

According to the WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS), member countries are required to recognise international patents on medicine.

However, the rules also say that "this requirement may be waived by a member in the case of a national emergency or other circumstances of extreme urgency".

However, as a WTO spokesman points out, "there are no clear boundaries defining an emergency and this has not been tested in the courts".

A national emergency?

Brazil and South Africa had both argued that they could waive the patent rules to battle against national HIV/Aids epidemics.

The question is whether the US will now cite its anthrax attacks as a "national emergency", giving it the right to overturn Bayer's patent.

People are crossing to Mexico to buy drugs

Already the government has committed to treating 2,400 people exposed to anthrax, and it also wants to ensure antibiotics are available to protect as many as 12 million people.

"If a lot of people get this drug for a long period of time, it could have an impact on supply," says Robin Davison, a biotech analyst at Durlacher.

The panicked US population is adding to supply problems by snapping up Bayer's Cipro drug - and even crossing into Mexico to buy cheaper drugs.

Tools of combat

"President Bush wants to make sure America's ability to deal with bioterrorism is as strong as possible and he's aggressively pursuing the tools needed," the US Health and Human Services Secretary Tommy Thompson said last week.

Evidently, the government is deliberating as to whether such tools include resort to cheaper, generic copies of ciprofloxacin.

Deepak Chatterraj, the head of the US arm of India's Ranbaxy Laboratories, last week told the BBC that he had been approached by a US senator to see if the company could supply anti-anthrax drugs if necessary.

India is a WTO member, but is still in a "transition" stage regarding the trade rules on pharmaceutical patents. Its status allows it to make generic drugs, regardless of patents, until 2005.

Cipro costs $350 a month in the US, while generic equivalents cost $10 a month in India.

Bayer's response

Bayer, for its part, claims that it can meet all of the demand for its Cipro drug.

Spokeswoman Christina Sehnert says the company is tripling its production over the next three months to 200 million tablets.

You can't apply one thing to developing countries and then when you find you have your own problems, become willing to waive the rules

Sophia Tickell
Oxfam

She stressed that it was "not necessary" for the US government to look for supplies elsewhere, but declined to comment on any discussions relating to patents with the government.

Canada, which signed up to comply with the WTO rules, has already threatened to waive the Bayer patent.

The government ordered one million pills from a local company because of an urgent need to increase stockpiles, but later backed down under legal pressure from the German firm.

Double standards?

If the US moves on Bayer's patent, it is likely to arouse animosity from the interest groups that campaigned for cheaper anti-Aids drugs.

"If the US government decides to do this, it would stand accused of hypocrisy, or at least double standards," says Sophia Tickell, a senior policy advisor at the charity Oxfam.

"You can't apply one thing to developing countries and then when you find you have your own problems, become willing to waive the rules."

With the death toll from anthrax climbing to a possible three, the administration is under pressure to act.

Trent Lott, Republican leader in the Senate, predicts that the upper house could debate the patent issue as early as this week.

But should the Bush administration decide to override the Bayer patent, its credibility for negotiating trade rights in the future will damaged - possibly beyond repair.