| Summary: | Statement of the issue: Facing large HIV-infected populations, Sub-Saharan African countries are producing antiretroviral (ARV) drugs under provisions of the World Trade Organization’s Agreement on the Trade-Related Aspects of Intellectual Property (TRIPS). Article 7 states that the protection of intellectual property should increase technology transfer to developing countries. This clause and the debate over domestic manufacturers’ ability to provide low-cost ARVs need examination.
Methods: Case studies from ARV manufacturing initiatives in Tanzania and South Africa analyzed conditions affecting two outcomes: the type of technology transfer arrangement entered (voluntary license or imitation) and the affordability of ARVs. Data were collected and analyzed from documents, key-informant interviews, and observation. Chi-squared and phi correlation statistics were then conducted across developing countries to test the association of voluntary ARV licensure with TRIPS-compliant patents and domestic firm ownership (state or private).
Results: Tanzania’s weak patent system and poorly-financed, partially state-owned firm dissuaded industry investment, but attracted a non-government organization to transfer technology through imitation. Donor-financed ARV tenders, however, restrict competition to international quality-accredited products not produced by the firm. Without large volumes and manufacturing capacity, it cannot achieve economies of scale to reduce prices below imported ARVs.
In South Africa, civil society challenged the strong patent system and poor government commitment that inhibited an ARV rollout. This and a well-financed, publicly-traded firm leveraged voluntary licenses. With international quality approval, the firm increased first-line ARV affordability; however, limited domestic competition keeps treatment prices above those of neighbouring countries.
A multi-country analysis found 321 generic ARV manufacturing initiatives in 86 firms across 25 developing countries. Voluntary ARV licenses had a strong positive association with TRIPS-patent compliance (ф=.56, p<.0001) and a weak negative association with state-ownership (ф=.19, p<.0001). Firms in South Africa and India were granted 77% of licenses and accounted for most quality accredited generic ARVs.
Conclusion: Despite positive association, technology transfer does not readily result from patent protection, particularly to state-owned firms. Developing countries must enact policies to enable affordable ARVs; yet, they must be cautious using local production to increase ARV access, as most initiatives cannot compete with high-volume generic manufacturers.
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