This allows countries to issue a license to manufacture the drug to someone other than the pharmaceutical company that holds the patent for the drug. Under article 31, countries are allowed to issue a compulsory license in the case of a national emergency or other circumstances of extreme emergency. Parallel importing is an important tool for poor countries because drug prices vary significantly in various places. Annie Parrault, spokesperson for Canada s Research Based Pharmaceutical Companies, an Ottawa-based lobby group, warns that compulsory licensing comes with risks. Any country that s considering compulsory licensing is at risk of losing their research and development industry, says Parrault.
Tropical diseases account for a minuscule amount of drug research and development.
You can t trade on HIV and AIDS in the same way you trade on cars and lumber, he argues. In 1997, South Africa passed the Medicines and Related Substances act, which allowed for compulsory licensing and parallel importing. The U.S. quickly placed South Africa on its 301 watch list of countries that it considers to be violating international trade law. In 1998, the U.S. threatened Thailand with sanctions on their exports of jewelry, wood, and other products if Thailand didn t get rid of their patent review board. Thailand s patent review board had the power to determine which patents Thailand would discard in favour of compulsory licensing and generic manufacturing.