Linking Intellectual Property Rights with Research and Development, Technology Transfer, and Foreign Investment: A Case Study of Egypt’s Pharmaceutical Industry

The World Trade Organization (WTO) was formed in order to establish a set of international rules and norms for conducting trade among nations. The objective of the organization is not only to strive towards a more harmonious and equitable playing field within the global market, but to “rais[e] standards of living, ensur[e] full employment, and expand the production of and trade in goods and services. . . .” Despite the organization’s recognition “that there is need for positive efforts designed to ensure that developing countries, especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development,” many WTO agreements have created discord between developed and developing nations with respect to implementing these goals.One particular WTO agreement, the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), has created a great deal of debate about the usefulness of international intellectual property rights. Will they result in increased trade and fairer global competition or will they simply strengthen the West’s hold on the international economy as they increase western multinationals’ profits and weed out competitors from developing nations? Although the process for developing and ratifying TRIPS was preceded with extensive debate among WTO members, there remain a number of disagreements among nations with regard to the interpretation and enforcement of TRIPS. The main divide exists between developed nations and developing nations due to their diverging national interests, which stem from their different levels of economic development. The developing nation members, with their limited research, development, and manufacturing capacities, took a leap of faith when they committed to adopting and enforcing strong, non-discriminatory minimum standards of intellectual property rights. Although it will take years to confirm whether this commitment will result in the foreign investment and domestic economic growth they aspire to obtain, these nations are under strong domestic pressure to produce tangible results in a short time frame. However, these expectations cannot be met simply by strengthening intellectual property laws, but rather require numerous other changes to interrelated legal regimes.This Note focuses on TRIPS’ impact on the pharmaceutical industry and health care in developing nations. By using Egypt as a case study, this Note aims to emphasize that the benefits of TRIPS for developing nations depends on the linkage between intellectual property rights (IPR) and other legal regimes, particularly drug regulation, technology transfer, and foreign direct investment (FDI) policies. The failure to adopt a holistic approach to the creation of effective and beneficial intellectual property rights regimes will merely increase the western pharmaceuticals’ market share and increase drug prices in developing nations. By asking whether Egypt, versus foreign multinational companies, is likely to benefit from its new IPR law (that is for the most part TRIPS compliant) one has to analyze the entire context in which the law exists. This in turn will expose the importance of various factors relevant to fulfilling the expected benefits of stronger IPRs in developing nations in general.Consequently, Section I provides a brief description of the ongoing debate between the developed and developing nations with regard to the costs and benefits of international pharmaceutical patents. Section II outlines and describes the controversial provisions in TRIPS and how they are addressed, adequately or inadequately, in Egypt’s new IPR law. Section III then analyzes the context in which the new IPR law is being introduced including the structure of Egypt’s pharmaceutical industry and national health care system. Section IV addresses other legal regimes and policies, such as research and development, technology transfer, and competition policy, which are inextricably linked to the efficacy of intellectual property rights. Finally, Section V offers recommendations on how Egypt can fully benefit from its commitment to TRIPS and its new IPR law, which can then be extrapolated to other developing nations in similar circumstances.