Usaforinnovation.com List of Lies about Thailand's Theft of US IP

WASHINGTON, April 25 /PRNewswire-USNewswire/ -- USA for Innovation () today announced a special report highlighting the 8 deadly lies about Thailand's theft of American innovation by the new military regime and Health Minister Mongkol na Songkhla.

Lie #1: Thailand is a poor country and cannot afford Western medicines.

Thailand has the 21st largest economy in the world. Thailand is in the top 10% of the richest countries in the world, richer than 206 other countries included on the list of the 2006 CIA World Factbook. The World Bank and International Monetary Fund confirm Thailand's strong position in the global economy, respectively ranking Thailand 20th and 21st.

Lie #2: Thailand is just doing everything it can to address its AIDS problem.

According to the United Nations, Thailand's government spent $93 million on AIDS in 2004, the last year publicly available. The World Health Organization notes that Thailand spends far less on health care (3.3% of GDP) than peers such as Argentina (8.9%) or poorer countries like Cambodia (10.9%) or Lebanon (10.2%).

While it is encouraging to see Thailand increased its spending on AIDS from $70 million in 2003, the truth is that the government spends much more money to support its state-owned telecommunications company, media empire, bank and airline. After the military took control of Thailand's government in a coup last September, the new government raised military spending by $1.1 billion, an almost 50% increase from the previous year. In other words, Thailand is stealing American technology to finance 2.4% of its radical remilitarization. What are they going to steal to fund the rest of it?

A good place to start would be Thailand's self-imposed tax and tariffs on these medicines. Thailand applies a 7% value-added tax (VAT), which the Bangkok Post reported on April 23 may rise to 10% to make up for other spending priorities. The government also adds another 10% tariff on drug imports.

Lie #4: Thailand's Government Pharmaceutical Organization issues drugs that are safe and effective.

The GPO's distribution of dangerous medicine like GPO-vir is contributing to the unusually high resistance levels of Thai patients. As American Enterprise Institute scholar and noted HIV/AIDS expert Roger Bate recently stated:

There is no decent "bioequivalence data" on the quality of GPO- manufactured drugs, meaning that they are at best approximate copies and should not be labeled generics ... As to fostering drug resistance, a 2005 study by Thailand's Mahidol University's faculty of medicine found that GPO- vir, a copy HIV treatment GPO makes, had between 39.6% and 58% resistance in the 300 patients investigated. This result is perhaps the worst case of HIV drug resistance in the world.

In addition to the taxes and tariffs, Thailand's Government Pharmaceutical Organization builds in its own profit margins before distributing drugs to the people of Thailand. In 2002 Thailand's then-Auditor-General Jaruvan Maintaka issued a report saying that the GPO sold about 60% of its medical products to government agencies at above market prices. In some cases, prices were marked up 1,000 percent. Investigative journalist Daniel Ten Kate notes in the Asia Sentinel earlier this year:

In 2003, the GPO made a net profit of 624.2 million baht [$19.2 million] on revenues of 3.7 billion baht [$114 million]. A year later, revenues topped 4 billion baht [$123.3 million], and rose to five billion [$154.1 million] in 2005. Profits for the GPO topped one billion baht [$30.8 million] in 2005, according to Anuthin Charnveerakul, the deputy public health minister under Thaksin, who also scolded the state enterprise for spending a mere 19 million baht [$585,541] -- just two percent of net profit -- on research and development. Now the GPO plans to double revenue to 10 billion baht [$308.2 million] by 2010.

Lie #6: Thailand is in the middle of an AIDS crisis.

The world is in the middle of an AIDS crisis. According to the 2006 United Nations Report on the Global AIDS epidemic, Thailand's HIV prevalence rate is less than 1 percent. It is insulting to claim "crisis" when it is really a matter of spending priorities. In fact, every penny Thailand refuses to pay for medicine is one less penny available to develop the medical innovation necessary to help countries such as Swaziland (20% of the total population is HIV+), Zimbabwe (14%) and Botswana (17%) who are struggling to find public health solutions to this horrible disease.

Thailand's new Minister of Health did not make a single effort to negotiate with drug companies before issuing compulsories licenses. He opted instead to launch an illegal first strike. Former U.S. Secretary of Health and Human Services Tommy Thompson, in calling for companies and government to negotiate a solution, described the Ministry of Health's actions in the press:

Unfortunately there was no diplomacy in this process: there was virtually no effort to reach out to the U.S. government or the companies that developed the drugs to arrive at a solution before the licenses were issued. Thailand's aggressive first step has now created an escalating battle between government and industry.

Lie #8: Thailand's recent use of compulsory licenses is legal.

Thailand's interpretation of compulsory licenses, as outlined in their February 2007 "whitepaper", wishes to remove all limits on use of the compulsory license for medical products. Thailand's recent movement to issue compulsory licenses for three medical products is not consistent with the rules outlined in the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). For a detailed discussion, please see Ambassador Ken Adelman's April 23, 2007 letter to Ambassador Rice, Secretary Gutierrez, Secretary Leavitt and Ambassador Schwab.

USA for Innovation