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Pharmaceutical Companies Accept Ecuador's Decision to Break Drug Patents

October 29, 2009

Foreign pharmaceutical companies on Wednesday accepted the decision of Ecuador's President Rafael Correa to enable the country "to bypass patents on 2,000 drugs in order to produce them locally or buy cheaper versions elsewhere," Agence France-Presse reports. "'We accept the democratic decision ... to legally implement this extraordinary measure,' the 14 companies including European and American giants such as Bayer and GSK said through the local pharmaceutical industry association on Wednesday," the news service reports. "No legal right is superior to the requirements of public health, especially in such serious circumstances," the statement said (10/27).

"Under rules agreed by the World Trade Organization, countries can issue 'compulsory licenses' to disregard patent rights," allowing local laboratories the ability to produce generic versions of drugs, "but only after negotiating with the patent owners and paying them adequate compensation," the Associated Press/Forbes reports (Valdivieso, 10/28). "Ecuador is to pay royalties to the holders of international pharmaceutical patents, basing the payments on the sale price of locally produced medicines, the Ecuadorian Institute of Intellectual Property said Wednesday," Dow Jones Newswire/NASDAQ reports (10/28).

"Brazil, Thailand, Zimbabwe, Malaysia, Indonesia, and Thailand are among countries that invoked the 'compulsory license' procedure to import cheap generic medicines, especially American AIDS drugs," the AP/Forbes writes. "Health campaigners have praised them, noting that patients who develop resistance to older anti-retrovirals need second-line drugs that can be prohibitively expensive."

"High costs, insufficient production and a lack of research have contributed to the fact that millions of people do not enjoy equitable access to medicines in developing countries such as Ecuador," said Andres Ycaza, president of Ecuador's Intellectual Property Institute (10/28).

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