A World Health Organization body met earlier this month to discuss attenuation of the pharmaceutical patent system and the possible replacement of private sector investment with government funding (including prizes) to encourage private research and development. The strongly anti-patent advocacy group Doctors Without Borders (DWB) had been invited to participate in the meetings and even assist in writing policy documents. Other anti-patent groups were also present as observers, but pro-patent observers were not welcome. Indeed, they were so unwelcome that academics and representatives of NGOs were thrown out by security. The mild-mannered Jerry Norris, a former employee of the U.S. Agency for International Development and current fellow in public health at the Hudson Institute, made it past security—but then he and other observers in the gallery from India and Britain were rooted out and forcibly asked to leave. Norris and his colleagues apparently did not have the necessary documentation required for attendance. 

The WHO confab was just one stop on the latest patent-bashing road show. Last week the show came to Bangkok, where the enemies of patents were welcomed with open arms at a three-day meeting organized by the activist community. Advertised as “The International Conference on Compulsory Licensing: Innovation and Access for All,” this event had every major activist group present, including Oxfam, the Third World Network, and DWB. The keynote speaker was Mongkol Na Songkhla, the Thai public health minister, who over the past year has issued compulsory licenses for medicines used to treat diseases such as AIDS and heart disease. The word in public health circles is that more threats and patent confiscations are just around the corner—perhaps for as many as 20 new drugs. 

There are two main forms of protest: voice and exit. In the battle over intellectual property rights, drug companies have tried voice. Perhaps it is time to try exit.

And as the conference brochure explained, such actions have not been confined to Thailand: “Developing countries that have issued compulsory licenses include but are not limited to Malaysia, Indonesia, Thailand, Brazil, and most recently Rwanda. In the majority of cases, compulsory licensing rights have been used by developing countries to secure access to anti-retroviral medicines to combat AIDS.” The trend clearly is building momentum. Insiders tell me that the Philippines may well be the next country to issue a compulsory license. 

Thus far, the global reaction to compulsory licensing has been mixed. The U.S. government has put Thailand on its watch list, and has done its best to highlight the dangers posed to research and development if pharmaceutical patents are attenuated and companies can make no profits from middle-income countries. Some of the big multinational firms have also responded. Novartis and Pfizer have filed lawsuits in India and Indonesia, while Abbott has stopped the launch of its new products in Thailand. Just last week, activists encouraged the Thai government to sue Abbott, claiming that the withdrawal of new drugs in response to compulsory licensing violates international trade laws. 

The anti-patent forces are clearly winning the PR battle. By aggressively defending intellectual property rights, the drug companies have stirred up media anger against them and achieved very little in the realm of positive government intervention. It is therefore immaterial that the companies were technically right to act as they did. 

As political theorists observe, there are two main forms of protest: voice and exit. The drug companies have tried voice: they have pointed out the need to make some profit from middle-income markets; they have complained to governments, activists, the media, and anyone that will listen; and they have tried litigation and threats of exit. Perhaps it is time to actually try exit. 

The first to take action might be Novartis. According to several sources, the company has shelved plans to build a $500 million factory in Brazil that would manufacture an anti-meningitis vaccine. Novartis publicly claims investment in Brazil could still go ahead, and the vaccine plant was never intended for Brazil anyway. The rumor is that a similar vaccine factory will instead be built in Singapore. 

Having met with Singaporean government officials this past February—and having seen Singapore’s large and growing science parks—I can attest that the Asian city-state is already protecting intellectual property rights and will continue to do so. Its government wants to develop and promote Singapore as a center for drug research and manufacture; Novartis and numerous other companies already have substantial investments in the country. Even if the rumors are wrong, perhaps Novartis should withdraw any future funding from Brazil. It may be time for other companies to invest only in countries that unequivocally safeguard intellectual property rights. Exit is far from a certain strategy for victory; but in this case, it might be worth trying. 

Roger Bate is a resident fellow at the American Enterprise Institute.