Thailand widens scope of generic drugs

In 2001, Thailand was among 142 members of the World Trade Organization that signed the Doha Declaration, which confirmed the rights of poor countries to override intellectual-property laws for public-health emergencies. The following year, it began producing its own generic retroviral cocktail that eventually brought the cost per patient down to $34 a month, compared with $532 a month for imported branded versions, according to research by Oxfam.

Developing countries aren't the only ones willing to cast aside intellectual-property laws when it suits them. In 2001, the US invoked compulsory licensing to force Germany's Bayer to slash prices on Cipro, a patented anti-anthrax medication. "When rich developed countries see the public interest is at stake, they see this as a necessary measure to make sure essential medicines are available," says Pascale Boulet, a legal adviser to Medecins Sans Frontières in Geneva.

Anti-AIDS campaigners in Thailand say the government's stance is principled and justified by the scale of the problem. "We need new antiretrovirals. Most of the second-line drugs have patents, and this means the price is very high. Thailand can't support these prices," says Nimit Tienudom, director of the AIDS Access Foundation, which lobbies for patients' access to healthcare.

There may also be a political calculation at work. Around 95 percent of Thais are covered by a universal healthcare program that was introduced in 2002 by former Prime Minister Thaksin Shinawatra over the objections of influential critics within the healthcare industry. Branded the "30- baht scheme" – a reference to a program in which Thais would pay 30 baht (about 87 cents) for treatment – it proved a huge hit that girded Mr. Thaksin's image as a defender of the poor and helped him win a landslide reelection in 2005.

Since seizing power last September, the military regime has lifted the requirement to pay 30 baht and renamed the scheme universal healthcare. Foreign observers say that decision, which amounted to rebranding Thaksin's scheme for political purposes, may have strained resources and forced health officials to find new ways to cut costs, such as compulsory licensing.

While the Thai government caught the industry off-guard with its snap announcement, its aim could be to strengthen its negotiating hand, rather than go it alone. Health Minister Mongkol na Songkhla told reporters Monday that "We are willing to negotiate with the companies if they are willing to give some discounts for the import of their originals."

Mr. Teera said manufacturers were ready to be flexible. "We realize the problem of budget constraints of the Ministry of Public Health and we appreciate their efforts to provide better healthcare to patients. But compulsory licensing won't solve the problem. The best way is to negotiate."

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