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Essays on Diseases of the Developing World and International Policy

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Title:
Essays on Diseases of the Developing World and International Policy
Creator:
Grooms, Jevay T
Place of Publication:
[Gainesville, Fla.]
Florida
Publisher:
University of Florida
Publication Date:
Language:
english
Physical Description:
1 online resource (97 p.)

Thesis/Dissertation Information

Degree:
Doctorate ( Ph.D.)
Degree Grantor:
University of Florida
Degree Disciplines:
Economics
Committee Chair:
HAMILTON,JONATHAN H
Committee Co-Chair:
BLAIR,ROGER D
Committee Members:
AI,CHUNRONG
PARK,HAESUK
Graduation Date:
8/6/2016

Subjects

Subjects / Keywords:
Control groups ( jstor )
Developed countries ( jstor )
Developing countries ( jstor )
Diseases ( jstor )
Imports ( jstor )
Malaria ( jstor )
Mathematical dependent variables ( jstor )
Patents ( jstor )
Pharmaceutical preparations ( jstor )
Public health ( jstor )
Economics -- Dissertations, Academic -- UF
economics -- health
Genre:
bibliography ( marcgt )
theses ( marcgt )
government publication (state, provincial, terriorial, dependent) ( marcgt )
born-digital ( sobekcm )
Electronic Thesis or Dissertation
Economics thesis, Ph.D.

Notes

Abstract:
The dissertation consists of two essays estimating the trade and public health affect international policy has had the less-developed world. The first chapter estimates the impact an a policy has had on a countries ability to gain access to pharmaceuticals relative to other countries. Chapter 2 uses the intent of international policy to offer insight into their effectives in improving the public health of less-developed countries. Chapter 1 utilizes dates countries were required to enforce an international patent policy to help determine if it limited a country's access to pharmaceutical drugs. The World Health Organization (WHO) estimates that over thirty percent of the less-developed world are unable to get adequate access to essential medicines. Recognizing, international organizations aim to aid its members in development, aspects of the World Trade Organization's (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) attempt to improve health care access for all its members. This paper intends to dive further into speculation that TRIPS could cause a health crisis for less-developed countries by limiting access to essential medicines and discouraging the creation of disease specific drugs. TRIPS marks one of the first instances that an international trading system introduced intellectual property law; it details minimum standards for which an international patent system was formed. The paper finds, during post TRIPS years greater inequalities in access to pharmaceuticals exists among different country classifications. It also finds, the development classification used to determine the enforcement date may not be the most conducive for all less-developed WTO members. In Chapter 2 focuses on how international policy aimed at improving access to existing pharmaceuticals has impacted less-developed WTO countries' ability to meet their public health needs. Infectious diseases are the leading cause of death in the developing world. Difficulties in the eradication of such diseases has been exasperated by poor sanitation, lack of clean water, populations concentrated in rural areas, poor education and insufficient infrastructure. International efforts have proven necessary to help resource limited nations improve their public health. The inability to control infectious disease is two-fold; lack of access and lack of research. While advancements in treatment for infectious disease is necessary, developed countries have been able to nearly eliminate the prevalence of some diseases by way of existing pharmaceuticals. ( en )
General Note:
In the series University of Florida Digital Collections.
General Note:
Includes vita.
Bibliography:
Includes bibliographical references.
Source of Description:
Description based on online resource; title from PDF title page.
Source of Description:
This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Thesis:
Thesis (Ph.D.)--University of Florida, 2016.
Local:
Adviser: HAMILTON,JONATHAN H.
Local:
Co-adviser: BLAIR,ROGER D.
Statement of Responsibility:
by Jevay T Grooms.

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UFRGP
Rights Management:
Copyright Grooms, Jevay T. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Classification:
LD1780 2016 ( lcc )

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ESSAYSONDISEASESOFTHEDEVELOPINGWORLDANDINTERNATIONALPOLICYByJEVAYGROOMSADISSERTATIONPRESENTEDTOTHEGRADUATESCHOOLOFTHEUNIVERSITYOFFLORIDAINPARTIALFULFILLMENTOFTHEREQUIREMENTSFORTHEDEGREEOFDOCTOROFPHILOSOPHYUNIVERSITYOFFLORIDA2016

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c2016JevayGrooms

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Idedicatethistothetwopeoplewhoservedasmyrolemodelsandmybiggestsupporters,myparents;HenryandTonieGrooms.IloveandappreciateyoumorethanIcouldeverexpress.Thankyou.

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ACKNOWLEDGMENTSIwouldparticularlyliketothankmychair,ProfessorJonathanHamiltonforhissupport,butforallowingandmotivatingmetoresearchtopicsthatgreatlyinterestme.TheexibiltyhehasgrantedmeinmytimeattheUniversityofFloridaisoneIdonottakelightly.Iwouldalsoliketothankthedepartment'sGraduateAdvisor,ProfessorStevenSlutskyforthecountlesshourshehasdedicatedtomakingsuremyclassmatesandIhadacesstoresourcestomaximizeourtimeinthedepartment.IwouldalsoliketothanktheDepartmentChairProfessorRogerBlairforhispersonalandprofessionalguidance.Iwouldalsoliketothankmycohort.Myclassmatesmadethisjourneyenjoyableandpushedmetobebetter.LastlybutmostimportantlyIwouldliketothankmyfamily.DuringmytimeinFloridatheyconstantlycalled,visited,sentcarepackagesandalwaysbelievedinme.IwouldliketothankmyparentsforsettingagreatexampleandforprovidingmewithelevenothersiblingswhohelpedtoshapeandsupportthepersonIamtoday. 4

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TABLEOFCONTENTS page ACKNOWLEDGMENTS ................................... 4 LISTOFTABLES ...................................... 7 LISTOFFIGURES ..................................... 8 ABSTRACT ......................................... 9 CHAPTER 1INTRODUCTION ................................... 11 2HASTRIPSCAUSEDINEQUALITIESINCOUNTRIES'ACCESSTOPHARMACEUTICALS? ................................ 15 2.1Background ................................... 15 2.1.1TheRoleofPharmaceuticals ....................... 15 2.1.2WorldTradeOrganization:TRIPS .................... 17 2.1.3RegulationandQualityAssurance .................... 24 2.2EmpiricalFramework ............................... 29 2.2.1Data ................................... 29 2.2.2Model ................................... 35 2.3Results ...................................... 37 2.3.1MemberDevelopmentClassication ................... 38 2.3.2RedeningtheMiddle:ExaminingtheDevelopingClassication .... 43 2.4Discussion .................................... 55 3DOINTERNATIONALPOLICIESHELPMANAGEDISEASESSPECIFICTOTHELESS-DEVELOPEDWORLD ............................. 57 3.1Background ................................... 57 3.1.1InternationalPolicy ............................ 58 3.1.2Diseases ................................. 60 3.2EmpiricalFramework ............................... 64 3.2.1Data ................................... 67 3.2.2Model ................................... 68 3.3Results ...................................... 69 3.3.1MemberDevelopmentClassication ................... 69 3.3.2RedeningtheMiddle:DoNICsHaveanAdvantageinTreatingSpecicDiseases? ................................. 73 3.4FurtherDiscussion:PoliciestoAddressSpecicDiseasesinLess-DevelopedNations ...................................... 78 3.4.1CountryLevel ............................... 78 3.4.2InternationalSupport ........................... 81 5

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4CONCLUSION ..................................... 83 APPENDIX ANOTESANDADDITIONALTABLESFORCHAPTER1 .............. 85 BDATAFORCHAPTER2 ............................... 90 REFERENCES ........................................ 94 BIOGRAPHICALSKETCH ................................. 97 6

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LISTOFTABLES Table page 2-1Developed(High)WTOmembers ........................... 31 2-2Developing(Middle)WTOmembers ......................... 32 2-3LDC(Low)WTOmembers .............................. 33 2-4Averagepharmaceuticaltraderelativetopopulation ................. 34 2-5Dependentvariable:pharmaceuticalexportspercapita(in$1,000) ......... 40 2-6Dependentvariable:pharmaceuticalimportspercapita ................ 42 2-7HumanDevelopmentIndexandcomponents ..................... 49 2-8Dependentvariable:pharmaceuticalexportspercapita ................ 50 2-9Dependentvariable:pharmaceuticalimportspercapita ................ 52 2-10Dependentvariable:pharmaceuticalexportspercapita ................ 53 2-11Dependentvariable:pharmaceuticalimportspercapita ................ 54 3-1Incidenceper100,000individuals ........................... 64 3-2Dependentvariable:incidencerateperyear ...................... 70 3-3Dependentvariable:incidencerateperyear ...................... 71 3-4Dependentvariable:incidencerateperyear ...................... 72 3-5Dependentvariable:incidencerateofbigthreenewcasesperyear ......... 76 3-6DependentVariable:IncidenceRateofnewcasesperyear .............. 77 A-1DependentVariable:PharmaceuticalExportspercapita(in$1,000) ......... 85 A-2DependentVariable:FractionofPharmaceuticalExportstoGDP(per$100,000) .. 86 A-3DependentVariable:FractionofPharmaceuticalImportstoGDP(per$100,000) .. 87 A-4DependentVariable:FractionofPharmaceuticalExportstoTotalExports ...... 88 A-5DependentVariable:FractionofPharmaceuticalImportstoTotalImports ..... 89 B-1DependentVariable:NewCasesperyear ....................... 91 B-2DependentVariable:Newcasesperyear ....................... 91 7

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LISTOFFIGURES Figure page 2-1GrowthRateofPharmaceuticalTrade(ExportsplusImports)ofPharmaceuticals .. 28 2-2TradeofPharmaceuticalspercapita(in$1,000) ................... 39 2-3Lowmembers:exportspercapita(in$1,000) ..................... 44 2-4Middlemembers:exportspercapita(in$10,000) .................. 45 2-5Lowmembers:importspercapita(in$1,000) .................... 45 2-6Middlemembers:importspercapita(in$10,000) .................. 46 2-7Tradeofpharmaceuticalsdividedbypopulation .................... 47 3-1Lifeexpectancy .................................... 58 3-2Middle&LowMembers:fractionofnewTBcasesrelativetopopulation ...... 65 3-3Middle&Lowmembers:fractionofnewmalariacasesrelativetopopulation .... 66 3-4Middle&Lowmembers:fractionofnewHIVcasesrelativetopopulation ...... 66 3-5NICs&non-NIDCs:fractionofnewTBcasesrelativetopopulation ......... 74 3-6NICs&non-NIDCs:fractionofnewmalariacasesrelativetopopulation ...... 75 3-7NICs&non-NIDCs:fractionofnewHIVcasesrelativetopopulation ........ 75 B-1AllMembers:TheFractionofNewTuberculosisCasesRelativetoPopulation ... 90 8

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AbstractofDissertationPresentedtotheGraduateSchooloftheUniversityofFloridainPartialFulllmentoftheRequirementsfortheDegreeofDoctorofPhilosophyESSAYSONDISEASESOFTHEDEVELOPINGWORLDANDINTERNATIONALPOLICYByJevayGroomsAugust2016Chair:JonathanHamiltonMajor:EconomicsThedissertationconsistsoftwoessayswhichestimatethetradeandpublichealtheectsaninternationalpolicyhashadontheless-developedworld.Therstchapterestimatestheimpactauniversalpatentpolicyhashadonacountry'sabilitytogainaccesstopharmaceuticalsrelativetoothercountries.Chapter2usestheintentofinternationalpolicytooerinsightintotheireectivenessinimprovingthepublichealthofless-developedcountries.TheWorldHealthOrganization(WHO)estimatesthatoverthirtypercentoftheless-developedworldareunabletogetadequateaccesstoessentialmedicines,whichareanecessityinthemetinganation'spublichealthagenda.Chapter1utilizesdatescountrieswererequiredtoenforceaninternationalpatentpolicytohelpdetermineifitlimitedacountry'saccesstopharmaceuticaldrugs.Recognizingthatinternationalorganizationaimtoaidmembersindevelopment,aspectsoftheWorldTradeOrganization's(WTO)AgreementonTrade-RelatedAspectsofIntellectualPropertyRights(TRIPS)attempttoimprovehealthcareaccessforallitsmemberswithspecialattentiongiventoless-developedmembers.ThispaperintendstodivefurtherintospeculationthatTRIPScouldcauseahealthcrisisforless-developedcountriesbylimitingaccesstoessentialmedicinesanddiscouragingthecreationofdisease-specicdrugs.TRIPSmarkstherstinstancesthataninternationaltradingsystemintroducedauniversalintellectualpropertylaw.Itdetailsminimumstandardsforwhichallmembersmustabideby.Thepapernds,duringpost-TRIPSyearsgreaterinequalitiesinaccessto 9

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pharmaceuticalsexistsamongdierentcountryclassications.Italsonds,thedevelopmentclassicationusedtodeterminetheenforcementdatemaynotbethemostconduciveforallless-developedWTOmembers.Chapter2focusesoninternationalpolicyaimedatimprovingaccesstoexistingpharmaceuticals,andwhetherithasimpactedless-developedWTOcountries'abilitytomeettheirpublichealthneeds.Infectiousdiseasesaretheleadingcauseofdeathinthedevelopingworld.Dicultiesintheeradicationofsuchdiseaseshasbeenexasperatedbypoorsanitation,lackofcleanwater,populationsconcentratedinruralareas,pooreducationandinsucientinfrastructure.Internationaleortshaveprovennecessarytohelpresource-limitednationsimprovetheirpublichealth.Theinabilitytocontroltheinfectiousdiseaseistwo-fold;lackofaccessandlackofresearch.Whileadvancementsintreatmentforinfectiousdiseaseisnecessary,developedcountrieshavebeenabletonearlyeliminatetheprevalenceofsomediseasesbywayofexistingpharmaceuticals. 10

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CHAPTER1INTRODUCTIONAdequatehealthcareisuniversallyconsideredabasichumanright.TheUnitedNation'sUniversalDeclarationofHumanRightsdeclaresthat,\Everyonehastherighttoastandardoflivingadequateforthehealthandwell-beingofhimselfandofhisfamily..."( UnitedNations ( 1948 )).TheWorldHealthOrganization's(WHO)Constitutiondeclares,\.thehighestattainablestandardofhealthasafundamentalhumanright,regardlessofrace,religion,politicalbelief,andeconomicorsocialconditions...Therighttohealthincludesaccesstotimely,acceptable,andaordablehealthcareofappropriatequality" WorldHealthOrganization ( 2006 ).Fromantibioticstoantiretrovirals,pharmaceuticaldrugsareandhavebeenanecessityforpopulationsthroughouttheworld.In2004theWHOestimatedthatover8millionprematuredeathswerecausedbycurablediseases.Asubstantialportionwasclaimedbyrespiratoryinfectionsandmalaria;thesedeathsalsooccurredatsignicantlyhigherratesinless-developed1countries.Thelackofaccesstoproperhealthcareandadequatepharmaceuticaldrugsisoftenexplainedbythe\10/90gap."Proponentsviethatalargeportionofdiseasesspecictopoorcountriesareneglected,thatistheyarenotgiventheproper.Onlytenpercentofresourcesdesignatedforresearchanddevelopment(R&D)inthehealthsectorareearmarkedforpopulationswhere90%oftheworld'sprematuredeathsoccur.Between1975and1999,only13ofthe1,393newdrugsapprovedworldwideweredesignedtoaddressneglecteddiseases( DepartmentofHealthStatisticsandInformatics ( 2008 )).2 1Developmentresearchtypicallyrefertotheless-developedworldasdeveloping,wechoosenottoinordertomakeiteasiertofollowouranalysis.Werefertodevelopingcountriesassuchandleast-developedcountryassuch,whenwespeakofthemasagroupwecallthemless-developedcountries.2Neglecteddiseasescommonlyimpactthepoorestpopulationsoftheworld.Whilemostofthisisattributedtoaccesstomedicines,itshouldalsobenotedtheseregionsalsohavelittletonoaccesstocleanwaterorpropersanitation,thusexasperatingthisissue. 11

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From2000to2011 PedriqueandBradol ( 2013 )foundover1%ofnewdrugswereapprovedforthetreatmentofneglecteddisease.Theyalsofoundaslightincreaseinthenumberofnewxed-doseand/ornewlyindicatedpharmaceuticalproducts3From2000to2011fourpercentoftheseproductsweredesignatedforneglecteddisease,whichisupfrom1.1%fromdrugsproducedfrom1975to1999.?suggeststhatthislackofprogressillustrates\...persistentinsuciencyindrugandvaccinedevelopmentforneglecteddisease."Criticsofthe\10/90gap"donotdenythelackofadequateresourcesinlow-incomecountries.TheycontendthatitisnotbecauseofthelackofR&Dbutthelackofaccess.Manyprematuredeathsarecurablewithexistingdrugs.Itisnotthelackofcreation,rathertheabsenceofpatentprotection,thatinhibitspharmaceuticalcompaniesfromservingsuchcountries.Thischapterexaminesthisclaimfurther.Ifaccessisheavilydeniedduetopatentprotection,weshouldexpecttoseechangesasauniversalpatentregimeisagreedupon.Evenifwendthistobetrue,thereisstilltheconcernoftreatingdiseasesinwhichtherearenoknowncuresandthatmostheavilyimpactless-developednations.Investmentsinthepublichealthofdevelopingnationsarerootedintheself-interestofdevelopednationsaswellasmorally.Morallyspeakingdevelopedpopulationspossessestheexistinginventionsandresourcestohelpimprovethequalityoflifeofthosewhoresideintheless-developedworld.4Emerginginfectiousdiseaseshaveandwillcontinuetorepresentamajorthreattothehealthofpopulationsthroughouttheworld.Accordingto KaiserFamilyFoundation ( 2014 ),\...populationgrowthandmovement,changesinlanduse,greatercontactbetweenpeopleandanimals,internationaltravel 3Thisincludesdrugswhichwerepreviouslygeneratedforadierentdisease.Pharmaceuticalsareoftendevelopedtotreatonedisease,andlaterapprovedforadditionalusesinthesameorvaryingdosage.4Whilewedonotdiscussit,somearguethatduringpost-colonialyears,developednationsshouldacceptresponsibilityastheirexploitationofsuchnationsarepartiallyresponsiblefortheirsuering. 12

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andtrade,andpoorpublichealthinfrastructure,"havecontributedtotheemergenceandre-emergenceofdiseases.WhilecountriessuchastheUnitedStatesexperiencelowermortalityratesandenjoyascoreof0.915outof1ontheHumanDevelopmentIndex,justaswithless-developednations,theyareatriskoffacingthenancialburdenandcasualtiesassociatedwiththespreadofinfectiousdiseases.Manydevelopednationseradicateddiseasesthathavepreviouslyimpactedthequalityoflife,suchaspolio.Yettheystillfacehealthconcernsfromthepossiblespreadofinfectiousdiseaseswhichareprevalentinless-developednations.SomeexamplesofsuchdiseasesareZika,dengue,andchikungunyaviruses.Whiletypicallytransmittedthroughmosquitobites,theCenterforDiseaseControl(CDC)haveveriedthatZikaviruscanbetransmittedsexually.Furthermore,mosquitoescanbecomeinfectedfromfeedingonindividualswhoareinfectedwiththevirusmakingtheriskofthediseasespreadinggreater.Whilemosquito-bornediseasesposelessofathreattothecontinentalU.S.,diseasessuchasEbola,H1N1Inuenza(swineu),H5N1&H7N9Inuenza(birdu),HIV(HumanImmunodeciencyVirus),MiddleEastRespiratorySyndrome(MERS)andSevereAcuteRespiratorySyndrome(SARS)originatedinless-developednationsbuthaveprovenproblematicfordevelopednations.In2009theswineucausedhavocintheU.S.anditwasbelievedtohaveoriginatedfromMexico,adevelopingcountry.Whileswineuandavianbirduhavebeenaroundsincetheearly1900'sandlate1800's,theyaretypicallyassociatedwithless-developedcountries,butthe2009outbreakprovedthatitwasn'tmerelyaless-developedvirusanymore.TheCDCestimated60.8millionAmericanscontractedtheswineuvirusandclaimed12,469lives.Swineuhasbeenaroundsincetheearly1900's.Anotherexampleofhowtheemergenceofdiseasesposedasubstantialthreattodevelopednations,isEbola.TherstveriedcaseofEbolawasreportedin1976neartheEbolaRiverinsub-SaharanAfrica.Priorto2013,therehasbeenroughlya35-yearspanwhere24outbreaksinfected1,700people.Thevirusisextremelydeadly,fatalitiesrateshavevariedperoutbreakbetween25%to90%.Itwasn'tuntilrecentlythattwopotentialvaccinesbegan 13

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theevaluationprocess.PriortothespreadofEbolatotheU.S.intheFallof2014,itwasconsideredsolelyasub-SaharanAfricaepidemic.ElevencasesweretreatedintheU.S.withtwocausalities.OnewasanindividualwhocontractedthediseaseinLiberiaandlaterexposednursesandothersintheU.S.;thesecondwasasurgeonwhowasexposedinSierraLeoneaftertreatinginfectedpatients.WhiletheCDCactedquicklyandwereabletocontainthedisease,WestAfricawasnotaslucky,theWHOestimatesthelastoutbreakwhichlastedfromlate2013untilearly2016infectedatleast28,600peopleandclaimedatleast11,300lives.Ebolawasareminderthat,whileonaveragediseasesthatplagueless-developednationsveryrarelyndtheirwaytodevelopednations,inthelastseveraldecadestheirabilitytospreadhavebecomemorecommon.Whiletheyhavenotalwaysbeenasdeadlyasswineu,orEbolatheyhavealsocausedhysteriaandlesscondenceinthelocalgovernment'sabilitytoprotectitscitizens.Theseareafewexamplesofhowemergingdiseaseswhichhavedevastatedless-developednationsshouldbeanagendaitemfordevelopednations.Thenexttwochapterswillfocusontheanalysisofpharmaceuticalsandhowtheyplayaroleinthegrowthoftheless-developedworld.Therstchapterexamineswhetheraninternationalpatentpolicyhasmadeaccesstopharmaceuticalsrelativelymoredicultforless-developedWTOmembers.Chapter2willtaketheanalysisastepfurther,andexaminewhetheraccessplaysaroleinless-developednations'abilitytoaddressspecicdiseases. 14

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CHAPTER2HASTRIPSCAUSEDINEQUALITIESINCOUNTRIES'ACCESSTOPHARMACEUTICALS? 2.1Background 2.1.1TheRoleofPharmaceuticalsPharmaceuticalssaveandimprovethequalityoflives,butunfortunately,theydonotcomecheap.IthasbeenestimatedR&Dperdrugcancostupwardsofabilliondollars( GottschalkandKarlsen ( 2004 )).Itisnorevelationthatsophisticatedpharmaceuticalindustriesdemandadequatepatentprotection.SomeWTOmembersadoptedtheirownintellectualpropertyrights(IPRs)priortoTRIPS,yettherewasnouniversalsysteminplace,whichledtodisputesamongmembers.Primaryconcernsvaried;developedmembersconcentratedontheprotectionofIPRs;less-developedmembersweremoreconcernedwithhowtomanageandrecognizeabalancebetweenstaticanddynamiceciency.ThevalidityofIPRsarenotinquestion;ratherhowtoimplementthemwhilesimultaneouslypromotingadvancementsinthepublichealthis.Onesideoftheargumentisstaticeciencyallowsless-developedcountriesaccesstodrugsbyimposinglessstringentrequirements.DynamiceciencyallowsdevelopednationswiththeIPRsnecessarytobolsterincentivesforinnovation.Withoutthepresenceofsaidinnovation,thechancesofndingtreatmentsfordiseasesspecictoless-developedregionswouldnotbeashigh.In2001JeanLanjouwsuggestedinnovationcouldbeprotectedifanewproposedinternationalpolicywasadopted.Itwouldallownewpatentseekerstoprotecttheirinventioninrichorpoorcountriesandnotinbothunlesstheychoosetocompetewithgenericprovidersinpoorercountries.Whileallcountriesacknowledgeinnovationasanecessityfordevelopment,less-developedcountriesviewitasalong-runnecessity.TheyviewtheneedtoaddressHIV,denguefever,malariaandtuberculousasanimminentneed.Less-developedmembersarguethatIPRsarenotahumanright,thereforeitshouldnotinfringeonaccesstoessentialmedicines,awellestablishedandrecognizedhumanright. 15

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Thelackofdevelopmentofpharmaceuticalsfortheless-developedworld,inlargepart,isaconsequenceofthelackofdemand1and/orproducers'inabilitytomakeprotstheydeemt.Thisisnotmerelyaless-developedworldissue,therearediseasesindevelopedcountrieswhichfacesimilarissues.Accordingto U.S. ( 2002 )itisestimatedthatupwardsof25millionAmericans2havesueredfrommorethat6,000diseasesduetothelackofmotivationneededtodeveloptreatments;thesediseasesaredeemedrarediseases.TheU.S.RareDiseaseActof2002,describesrarediseasesasanydiseaseordisorder,\...whichaectsmallpatientpopulations,typicallypopulationssmallerthan200,000individuals,"otherdevelopedcountriesusedierentspecications,butmanyaresimilar.In1983theU.S.introducedtheOrphanDrugActtomotivateadvancementsintreatingthesediseases.TheActgranteddevelopersofdrugsdesignatedforrarediseases3provisionstohelposettheR&Dcosts.Inmorerecentyears,provisionsincludetaxbenetsandfundingprovidedbytheNationalInstituteofHealth(NIH).GovernmentbackedprogramsinstitutedtotreatrarediseasesarenotuniquetotheU.S.TreatingrarediseaseisoneoftheprioritiesontheEuropeanCommissionPublicHealthProgramme'sagenda.Developedcountrieshaverecognizedtheimportanceoffundinghealtheortswheneconomicforcesinhibitit,thisisadilemmatheless-developedworldhasn'tbeenabletondananswertoandoneweintendtodiscussfurtherinChapter2. 1Thelackofdemandisamultiprongedproblemandonethatisnotdiscussedindepthinthispaper.Whilepopulationsdemandtreatment,theymaynothavetheluxurytoaordit.Subsetsofless-developedcountriescanresideinrurallocationswhichlackaccessandknowledgeoftreatmentsavailable.Insomeinstance,thelackofdemandcouldbeinpartduetolackofknowledgebutitcouldalsobeduetoimproperknowledge.2TheGlobalGenesorganizationestimates7,000rarediseasesaect350millionpeopleworldwide.TheyandNIHhavegeneratedaRAREListwhichcomprisesofallrarediseasesworldwide.3Examplesofrarediseasesaremusculardystrophy,amyotrophiclateralsclerosis(ALS)andcysticbrosistonameafew. 16

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Thepurposeofthischapterisnottovalidatetheimportanceofpatentprotection,buttoexplorethehealthimplicationsofTRIPSonless-developedcountries.Whilesomedevelopingcountrieshavetheeconomic,politicalandlegalinfrastructuretosupportasophisticatedpatentsystem,mostleast-developedcountriesarenotawardedthisluxury.MostLDCshavemorepressingissuesthanestablishingapatentsystem,theyareplaguedwithhighunemploymentandlowliteracyrates( Imam ( 2005 )).Ofthe49LDCs,72%oftheirpopulationsliveinruralareasandrelyonagricultureforincomeandsubsistence.Morethanhalfofthepopulationliveoofless$1.25perday.Less-developedcountrieshaveoftennlackedtoabilitytomeetthehealthneedsoftheirpopulationasdevelopedcountrieshavedoneinthecaseofrarediseases.Totreatdiseasesinwhichacureortreatmentexist,theywillneedtogainmoreaccesstosuchmedicines.ThepublichealthspecicationofTRIPSintentionswasthoughttohelpcombattheinstabilityofLDCsandgrantthemconcessionswhichenablethemtomeettheirpublichealthneeds.Thischapterwillanalyzehowpatentprotectiononpharmaceuticalscouldaectless-developedcountriesabilitytoaccessessentialmedicines. 2.1.2WorldTradeOrganization:TRIPSOnOctober20,1988,theUnitedStatesintroducedU.S.Proclamation5885;itstatedtheU.S.wouldimposea100percentad-valoremtarioncertainimportsfromBrazil.IntheProclamationPresidentRonaldReaganoersthefollowingexplanationforthetari: ...theGovernmentofBrazilhasfailedtoprovideaprocessandproductpatentprotectionforpharmaceuticalproductsandnechemicals,andthisfailureisunreasonableandconstitutesaburdenorrestrictiononU.S.commerce.ThisfailurepermitstheunauthorizedcopyingofpharmaceuticalproductsandprocessesthatwereinventedbyU.S.rms.Thiswasnottheonlyinstancewhenanindividualcountryimposedsanctionsforwhattheydeemedaspatentinfringement,althoughtherewerenosetinternationalpatentguidelines.Priortotheocialadoptionofauniversalintellectualpropertyagreement,developednations 17

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reliedheavilyonbilateralandmultilateralpressurestoprotectthepatentsoftheirdomesticrms.TobetterunderstandhowTRIPSwasagreedupon,itisnecessarytounderstandwhowerethemainbackers.Acoalitionofbusinessrms,themajorityfromtheU.S.,spentyearslobbyingtheU.S.governmenttopushforaninternationalpatentsystem.ThecoalitionconsistedofcompaniesfromdierentaspectsofthegoodandservicessectorwiththecommonthreadofeliminatingthetheftofU.S.-ownedintellectualpropertyfromabroad.WiththehelpoftheU.S.Government,TRIPSpassedin1994.UnderArticle33ofTRIPS,WTOmembersareobligatedtograntpatentsonproductsandprocessesforaminimumof20years( WorldTradeOrganization ( 1995a )).PriortoTRIPS,somemembershadapatentsysteminplace,butrulesandregulationsvaried.Inthe1984PatentLawofthePeople'sRepublicofChinagrantedpatentprotectiontoinventorsbutownershiptotheState.Itexcludedcertaingoodsfrompatentprotectionincludingpharmaceuticalproductscreatedbywayofchemicalprocess.Intheearly1990'spressurefromtheU.S.encouragedtheagreementbetweencountrieswhichwasdetailedintheMemorandumofUnderstandingontheProtectionofIntellectualProperty.ThisagreementnolongerexcludedprotectionofpharmaceuticalproductsandalsoadjustedthepatentlengthtothatwhichwascurrentlyinplaceintheU.S.,20yearsfromthelingdate.India'soriginalpatentlawwasbasedontheBritishPatentLawof1852andrevampedseveraltimes,mostnotedlyin1970withthePatentAct.ThePatentActgrantedinventorsprotectionforalengthrangingfrom7to14yearsdependingonthelingdate.OnepertinentaspectofIndia'spatentlawwasthatitprovidedprotectionontheprocessbutnotthecompositionoftheproduct.Italsoallowedcompaniestoproducegenericversionsofpatentedpharmaceuticaldrugswiththerequirementthattheyusealternativeproductionprocessesasnottoinfringeonthepatentalreadyinplace.In2001Cipla,anIndianpharmaceuticalcompanyproducedagenericversionofa\triplecocktail"antiretroviraldrugtotreatHIV.Thetreatmentwassoldtosub-Saharangovernmentsfor$600foranannualsupply,andtoanNGO 18

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inAfricafor$350foranannualsupply.Thiswasafractionofthenamebrandversionwhichwasrough$10,000foranannualsupplyinIndia.Theimportanceofprotectingtheintellectualknowledgebehindtheproductandorprocessvariesbytheinvention,butasseeninthecaseofCipla,patentprotectiononthecompositionoftheproductisfarmoreintegralthantheprocesswhenpertainingtopharmaceuticals.TRIPSisaninternationalpatentprotectionsystemwhichwasestablishedattheUruguayRoundoftheGeneralAgreementonTarisandTrade(GATT)TradeNegotiationsin1994.AttheRound,membersdecidedtoexpandtheorganizationandfromtheWTOmarkingthersttimeintellectualpropertyrightswererecognizedinaninternationaltradingsystem.4MembershipintoWTOgrantsaccesstoanintergovernmentalorganizationwhichestablishestradingrules,regulations,andenforcement.AftertheconclusionoftheUruguayRound,someoftheless-developedmemberswereleftuncertainontheinterpretationofTRIPS.Realizingitgaveroomforverynarrowinterpretationtheyfeareditwouldinhibitthemfrommeetingthepublichealthneedsoftheirpopulations.ThelanguageofTRIPSasitwasoriginallywrittendidnotspecifytowhatmeasuresnationsweregrantedtomeetnationalhealthemergencies.AstheAIDS/HIVepidemicreceivedmoreinternationalattention,nationsbegininquiringabouttheirlegalrighttoissuecompulsorylicensesfortheproductionofantiretrovirals.Thiswasmetwithdisapprovalbymydevelopednations.Inresponse,less-developedmembersbannedtogetherandmadeapushforlessnarrowspecicationsofTRIPSduringaSpecialDiscussiononTRIPSandPublicHealthattheDohaMinisterialConferenceinJuneof2001.Forty-sevenless-developedcountries,fromAfrica,Asia,LatinAmericaandtheCaribbean,submittedaJointPaperaskingthatDohaMinisterialConferencetoensure,\theTRIPSAgreementdoesnotinanywayunderminethelegitimaterightofWTOMemberstoformulatetheirownpublichealthpoliciesandimplement 4AllGATTmembersexcludingSerbiaandtheSocialistFederalRepublicofYugoslaviabecamemembersoftheWTO. 19

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thembyadoptingmeasurestoprotectpublichealth"( Oh ( 2002 )).ThePaperwasmetwithmuchdisdainfrommanydevelopedmembers.TheU.S.assertedstrongpatentregimeswouldbeofmoreimportanceforallmembers,anddidnotacknowledgetheconcernsexpressedbyless-developedmembers.WhilemanydevelopedmembersdidnotsupporttheconcernspresentedintheJointPaper,Norwaywasanexception.DuringtheSpecialDiscussion,theyaskeddevelopedmemberstoseekrestraintinlegalramicationsfromtheirfellowdevelopedmembersagainstless-developedmembersuntillegalclarityofTRIPSwasestablished.TheHIVandAIDSepidemicmadethesepublichealthconcernsevermorereal.Withinternationalpressuremounting,inNovember2001attheDohaRound,membersvotedtoamendTRIPS;themainagendaitemwaspublichealth.5WhenaddressingpublichealthTRIPSfocusesontwokeycomponents;accesstoaordableexistingpharmaceuticalsandadequatemotivationforfutureresearchtoallowforthecontinuinginventionsofnewpharmaceuticals.Toachievetheseless-developedmembersweregrantedtherighttoissuecompulsorylicensesincasesofnationalemergenciesornationalpublichealthproblems( WorldTradeOrganization ( 1995b )).Italsoallowedparallelimportation,thatisnon-developedmembersweregrantedtheabilitytoexporttoothermembersattheirdevelopedlevelorloweriftherewereanationalemergencyorstrongnationalhealthdemand.6 5TheamendmentprocessasitrelatestopublichealthbroughttheWHO'sandNGO'sattentiontothenarrowspecicationsofTRIPSandmotivatedtheirinvolvement,muchtothedisapprovalofmanydevelopedmembers.Thistopicandhowitrelatestoless-developedmembers'abilitytoaddressspecicdiseasesisdiscussedfurtheratthecloseofChapter2.6Forexample;ifbothKenyaandIndiahadanoutbreakofadiseasewhichtheirrespectivecountriesdeemedanationalemergencyandthedrugtomanagetheoutbreakisunderpatentandtooexpensive,underTRIPStheyarebothwithintheirrightstoissueacompulsoryincensestoadomesticproducertoprovideagenericversionofthedrug.India,havingasubstantialpharmaceuticalindustrywouldhavethemeanstoissuesuchlicensewhileKenyamaynothaveadomesticproducercapableofprovidingthegenericversion.Inthisinstance,itiswithintheregulationsofTRIPSforKenyatoimportsaiddrugfromIndia.Intheoppositescenario,IndiawouldnotbegrantedtherighttoimportfromKenya,asKenyaisanLDCandIndiaisadevelopingmember. 20

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Asexpressedinthe2006WTOFactSheet-TRIPSandPharmaceuticalPatents: \TRIPSattemptstostrikeabalancebetweenthelong-termsocialobjectiveofprovidingincentivesforfutureinventionsandcreation,andtheshort-termobjectiveofallowingpeopletouseexistinginventionsandcreations...Inventionandcreativityinthemselvesshouldprovidesocialandtechnologicalbenets.Intellectualpropertyprotectionencouragesinventorsandcreatorsbecausetheycanexpecttoearnsomefuturebenetsfromtheircreativity.Thisencouragesnewinventions,suchasnewdrugs,whosedevelopmentcostscansometimesbeextremelyhigh,soprivaterightsalsobringsocialbenets."( WorldTradeOrganization ( 2006 ))Tostrikethebalanceandprotectmembers,TRIPScoversveissues; 1. HowbasicprinciplesofthetradingsystemandotherIPagreementsshouldbeapplied. 2. HowtogiveadequateprotectiontoIPrights. 3. HowmembersshouldenforceIPrightsadequatelyintheirowncountries. 4. HowtosettleIPdisputesamongmembers. 5. Specialtransitionalarrangementsduringtheperiodwhenthenewsystemisbeingintroduced.IntellectualpropertycoveredunderTRIPSincludespatents,copyrightedandrelatedgoods,trademarks,geographicalindications,industrialdesigns,andintegratedcircuitlayout-designs,aswellastheprotectionofundisclosedinformation.ItrequiresallmemberstoabidebyspeciedminimumstandardsanddoesnotinhibitthemfromenforcingstricterinterpretationsofTRIPS.TRIPSappliestoallWTOmembers,andallowsfortheexistenceoffourplurilateralagreements7whichwereagreeduponin1979,priortotheformation 7TheAgreementonTradeandCivilAircraft,AgreementonGovernmentProcurement,InternationalDairyAgreement,andtheInternationalBovineMeatAgreement;thelasttwoendedin1997. 21

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oftheWTO.TRIPSrequiredWTOmemberstocomplywiththemainconventionsasspeciedbytheWorldIntellectualPropertyOrganization(WIPO);theParisConventionfortheProtectionofIndustrialProperty,andtheBerneConventiononcopyrightissues.TheWIPOisaspecializedorganizationformedin1967andisnowpartoftheUnitedNations(UN).Theirobjectiveistopromoteintellectualpropertyprotectionbywayofcooperationandcollaborationofcountries.Currently,theyalsoserveasanaidtodevelopingandrestructuringdomesticpatentsystemsofless-developedmembers.ThisinvolvementismetwithsomediscontentfromNGOs.TheWIPOhasnotthoughttohavepaidparticularattentiontopublichealthconcernsofless-developednations.TherehasalsobeenspeculationthatU.S.-E.U.pressurewillleveragetheWIPOtoachievemorenarrowspecicationswhichtheywerenotsuccessfulinachievingwiththeWTO( Abbott ( 2002 )).TRIPSmandatesWTOmemberstoallowinventorstolepatentsunderthe`mailbox'provision,regardlessofthestateofacountry'spatentsystem.The`mailbox'provisionstatesthatasofJanuary1,1995,patentocesinallWTOcountriesarerequiredtoacceptpatentsubmissions.Thedateoflingissignicant;whenamemberpassesitstransitionperiod,theywouldthenbeobligatedtorecognizethepreviouslyledpatents.Acknowledgingthevariousdevelopmentstagesofitsmembers,TRIPSgrantsmembersatransitionperiod;aspeciedspanoftimebeforeitisobligatedtohaveasucientpatentsysteminplace.Thespanoftimegrantedtoeachmemberisbasedontheirdevelopmentclassication.Theoriginalagreementgranteddevelopedmembersoneyear,expiringJanuary1,1996;developingnationsfouryears,expiringJanuary1,2001,andLDCselevenyears,expiringJanuary1,2006.Least-developedcountriesareidentiedbytheUnitedNation'sCommitteeforDevelopmentPolicy,whousesthreemaincategories:grossnationalincomepercapita,human 22

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assetmeasures8andeconomicvulnerability.9DevelopingcountriesareclassiedasthosecountrieswhicharenotdevelopedandnotLDCs;thereforetheymaymeetsomeoftheLDCspecications,butnotallofthem.Developedmembersself-selectintotheclassication.10TRIPSasitrelatestopharmaceuticalspatentprotectionwasalteredandtransitionperiodsextended.DevelopingmembersweregranteduntilJanuary1,2006,andLDCmembersuntilJanuary1,2021,forfullimplementationofthepharmaceuticaldrugprovisions( WorldTradeOrganization ( 1995a )).AspreviouslymentionedTRIPSallowscountriestoissueacompulsorylicense;whichistheabilitytoallowtheproductionofapatentedproductwithouttheconsentofthepatentholder.Itrequiresthatthemembercountrygrantingapharmaceuticalcompanyacompulsorylicensemustestablisharoyaltyamountorpercentageofsaleswhichisgiventothepatentholderforcompensation.Theissuanceofcompulsorylicensesforpharmaceuticalsisasensitivetopic;itiswidelyfrowneduponbydevelopedmembers.Itisuncertainwhymorecountriesdonotissuecompulsorylicensesforlife-savingdrugswhenTRIPSlanguageallowssuchaction.Themostcommondrugsissuedundercompulsorylicensesareantiretroviralsandcancermedications.Itisthoughtthatsomefeartheretaliationofdevelopedcountriesandpharmaceuticalcompanieswhoproduceotherdrugsthepopulationneeds.Ina2014reportbyPhRMA,theyassertIndia\...distortswhatwasintendedasapublichealthexception(ofTRIPS).."byissuingthecompulsorylicensein2012.Inrecentyearsmoredevelopingcountrieshaveissuedcompulsorylicenses.Widespreadknowledgeofmembersusingcompulsorylicensesoftendoesn'toccuruntilacomplaintisledwhichcouldlatemonthsandevenyears.(In 8Health,nutrition,mortalityrates,schoolenrollmentandliteracyratesaresomeexamplesofhumanassetmeasurestakenintoaccount.9Whetheracountryislandlocked,remoteorsmallaswellasnaturaland/ortrade-relatedshocksareafewexamplesofmeasuresusedtodetermineacountry'seconomicvulnerability.10Therearenoperceivedbenetsintoselectingintoadevelopedclassication.Therearemorebenetstobeinghadbybeinginthedevelopingorleast-developedclassications. 23

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Chapter2wewilldiscusscompulsorylicensesfurtherandhowNGOshavegotinvolved.)Insomeinstances,amembercountrymaythreatentograntacompulsorylicensebutgivethepatentholderachancetosubmitacounteroerwhichrequiresthepriceloweredand/ormoreaccessbegrantedtomeetthedemandofthecountry'spopulation.Oneinstanceofacompulsorylicenseissuedandthedrugproducedwasin2012withNatco,anIndianrm.Theyweregrantedacompulsorylicenseforsorafenibtosylate,adrugwhichtreatscancerofthekidneys,liver,andthyroids.PriortothisitwasoeredbyBayerfor$5,600amonth,Natcooereditfor$176amonth.11 2.1.3RegulationandQualityAssuranceTheestablishmentofTRIPSasitrelatestopharmaceuticalswastomeetthedemandsofthepharmaceuticalindustry,while`simultaneously'promotingaccesstoproperessentialmedicines,technologicalinnovation,andthetransferoftechnology.PriortoTRIPS,thereweregraveconcernsoverqualityassurance,counterfeitdrugs,distributionissues,andalackofresearchintodiseaseswhicharespecictoless-developedcountries( LanjouwandCockburn ( 2001 )).Inthispapercounterfeitsaredrugsproducedillegallybythenationtheyareconsumedinordrugssoldontheblackmarketswhichmaynormaynotbeproducedusinganillegalmethod?Thisisanimportantdistinction(butonewelacksucientdatatoexploit);someU.S.rmsrefertoanydrugproducedwhichisunderpatentacounterfeit.WhilesuchpracticesmaynotbeviewedasethicalbytheU.S.,theyarenotillegalperse.Ifthesaidcountrydoesnothaveapatentsysteminplaceinthecountrywheretheyarebeingconsumed,oriftheyimportedfromacountrywhereapatenthasexpiredorwasneverled,theyarenotconsideredillegalbytheirhomecountry. 11In2001theU.S.governmentissuedathreattoBayertograntacompulsorylicensefortheproductionofanantibiotic(ciprooxacin)usedtotreatexposuretoanthrax.Inresponse,BayerloweredthepriceandagreedtoproduceenoughtomeettheGovernment'sneed. 24

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TheWHOspeciesessentialmedicinesasthosemedicineswhichareapriorityforthehealthofagivenpopulation.Theyareintendedtobeavailablewithinthecontextoffunctioninghealthsystemsatalltimesandinadequateamounts.Asstatedin WorldHealthOrganization ( 2015 ),theyshouldalsobeavailableintheappropriatedosage,assuredqualityandatanaordableprice.PriortoTRIPS,IPRswerenottheonlyconcern,governanceoverthequalityandsafetyofthepharmaceuticalindustrywasagraveconcern.Mostdevelopedcountriesrestricttheimportationofpharmaceuticalswhichhavenotbeenapprovedbytheirrespectivedrugadministration.Notalldevelopingandleast-developedcountriesareequippedwiththeinfrastructuretoproperlymonitorimportsinasimilarmanner.Itisestimatedthattaintedpharmaceuticaldrugsadministeredbyimproperlytrainedmedicalpersonnelorpoorlysterilizedmedicalequipmentledto780,000to1.56millioncasesofhepatitisB,between250,000to500,000incidencesofhepatitisCand50,000to100,000casesofHIVonanannualbasisinsub-SaharanAfrica( WorldHealthOrganization ( 1999 )).12TheintroductionofTRIPSrequiredcountriestoestablishamethodofgovernanceofthepharmaceuticalprocess,whichincludesqualityassuranceeorts.Comparedtootherindustriesthemanufacturingprocessofpharmaceuticalsisrelativelystraightforwardmakingillegalcounterfeitsprevalent.Theactofcounterfeitingpresentsatwo-foldissue;rstitputsusersinharm'swaybyoeringdrugswhichcanbehazardoustotheirhealth;secondly,itunderminesthenancialreturnstoR&D.Whileitistruethatpharmaceuticaldrugcompaniesnditdiculttocombatthenancialburdenofcounterfeitsoodingtheblackmarket,itmakesit,evenmore,concerningthatsomeconsumersaremedicallyharmedbytheconsumptionofcounterfeits.Counterfeitdrugsposeaproblemin 12Since1978therehasbeensomeformofworldwidepharmacovigilanceinplacetotrytomonitorandpreventtheadverseeectsofpharmaceuticaldrugs.Asof2013,thereareover130countrieswhichmakeuptheWHOProgramforInternationalDrugMonitoringanditcurrentlyservesasthemainprogramtomonitordrugsafetyworldwide.WhiletheWTOdoesnotdirectlymonitorthisprocessTRIPSdoesrequireacertainlevelofqualityassuranceuponeachmembermustmeetotherwisetheyareliabletofacesanctions. 25

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allcountries.Mostcounterfeitsindevelopednationsareconsidered\lifestyle"drugs;drugswhicharenotusedtocombatlife-threateningconcerns.OneofthemostwidelycounterfeiteddrugsisViagra;othercommoncounterfeitsindevelopedcountriesareweight-lossdrugs,hairregeneratingdrugsandBotox.13WhilecasesofcounterfeitedcancerandHIVdrugshaveoccurredindevelopedcountries,counterfeitsoflife-savingdrugsoccurmorefrequentlyinless-developedcountries.In2002theNigerianNationalAgencyforFoodandDrugAdministrationsandControlestimatedthat41percentofallpharmaceuticalsinthenationwerecounterfeited.In2008theWHOestimatedthatuptoone-thirdofallmedicinesinsub-SaharanAfricawerecounterfeits.Whilesomecounterfeitsarecomprisedofasubstantialpart,ifnotall,oftheactiveingredientsandarecomparabletogenerics,notallcounterfeitsare;makingitimpossibleforconsumerstodierentiatebetween`good'and`bad'counterfeits.AccordingtotheWHO,thelackofadequatedrugtreatmentleadstoanindividual'swillingnesstopurchasecounterfeits.Itisplausiblethatsomemedications,especiallythoseinhighdemandsuchasmalariaorHIVmedications,containlessthanonepercentofactiveingredients.TheWHObelievesuchactionscontributetodrug-resistantstrainsofdiseases( Kremer ( 2002 )).Thelimitedavailabilityofessentialmedicinesisnotinherentlyduetothelackofdemand.Pharmaceuticalcompaniesassertblackmarketsmakeitdisadvantageoustooersimilardrugsinless-developednationsatareasonableprice.Itissuspectedthatthedrugswouldthenndtheirwaybackinthehandofconsumersindevelopednations.Thisalsoservesasadisincentiveforrmstoinvestindrugsfordiseasesspecictoless-developedregions.Thereisnodebateovertheneedforauniversalpatentsystem,yetthereisstillconcernwhethercurrentpolicieswillstieorstimulateless-developedcountries'abilityto 13Pharmaceuticalcompanies,suchasPzerhavetheirowndivisionswithindevelopedcountriesinordertocombatcounterfeiting.Someoftheireortsincludebuyingcounterfeitstoidentifywhoisproducingtheproductandultimatelyprovidinginformationtolocalgovernmentagenciestoensuretheyareheldaccountable. 26

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establishstrongandwell-functioningpharmaceuticalindustries.Aconcernexpressedbyless-developedcountrieswastheextenttowhichTRIPSwouldstuntthegrowthofthedomesticpharmaceuticalindustryandlimittheirabilitytoaddressdiseasesspecictotheirpopulation. Mirza ( 1999 )suggestsTRIPScouldimpactthemajorityoftheworld'spopulationbyweakeningnationalpharmaceuticalindustries. Hoen ( 2004 )tooktheargumentabitfurthersuggestingfullprotectionofintellectualpropertyasitrelatestopharmaceuticalscouldforcesomecountriestochoosesanctionsortheirnation'spublichealth.Recognizingthelackofanempiricalapproachtoprovethisclaim,shesuggestsinthefuturedatawilloeramoreclearexplanationoftheimpactofTRIPS.UsingempiricalevidencetoassuretheusefulnessofTRIPSasitrelatestodevelopingandLDCmembersaccesshasprovendicult.ThereisnouniversalbeliefonthemannerinwhichTRIPSwouldaectmembercountries.Someexpertscontenduniversalharmonizationofthepatentsystemwouldstimulatethedevelopmentofnewdrugs( Bale ( 1991 )and Otten ( 1997 )).Accordingto Weissman ( 1996 ),others,heavilysupportedbyless-developedmembers,suggeststhattheuniversalharmonizationofthepatentsystemwillprovedetrimentaltolocalpharmaceuticalindustriesbyincreasingdependenceontransnationalcompanieswhichwouldcauseaslewofothersideeects.14Regardlessoftheargument,mostagreeitistooearlytoprovewithanycertaintythateitherisoccurring.EstimateswhichtrytopredicttheimpactofTRIPShavenotbeenwellreceived.PredictionsonwhetherTRIPSwouldincreasepharmaceuticalpricesvariedwhenstudiesweredoneonacountrylevel. Chambouleyron ( 1995 )studypredicteda51%increaseinpricesinIndiaanda71%increaseinpricesinArgentina. 14Thisisnotaninherentlydetrimentalorbenecialimpact.Ifbytransitioningcompaniestheyarereferringtothosecompaniesintransitionindevelopingcountries,thiscouldresultindrugswhicharespecictotheless-developedworld.Converselyitcouldalsoimply,LDCsarenotdependentondevelopingcountriesandwhilebenecialtothenation'spublichealthintheimmediatefutureitcouldhurttheirlongrunpublichealthbyforcingthemtorelyonthepharmaceuticalindustriesofthedevelopingworld,whichcouldgraduallyincreasepricestoalevelwhichpricesLDCsoutofthemarket. 27

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Subramaniam ( 1995 )multi-countrystudyfoundpredictedpricestofallwiththeintroductionofTRIPS.MorerecentstudieshaveshownthattherehavebeendierentresultsindierentcountriesandthereisnouniversalruleofhowTRIPShasimpactedconsumptionorpricesinless-developedcountries. Figure2-1. GrowthRateofPharmaceuticalTrade(ExportsplusImports)ofPharmaceuticals Figure1-1illustratestherateofchangeinthetradeofpharmaceuticalsforeachgivendevelopmentclassication.Theaggregationofexportsandimportsofpharmaceuticalsareusedtoestimatethetrade,and2002asthebaseyear.InFigure1-1itappearsthatonaverageMiddlemembersaregrowingataslowerratethanHighmembers,andonaverageLowmembersaregrowingatamoresubstantialratethantheMiddle.ThispaperintendstoshedmorelightontheimpactofTRIPS.Inparticular,itexamineshowaWTOmembers'accesstopharmaceuticalshavebeenimpactedbyTRIPS.WhileonecannotinferthemeritsofTRIPSfromthischapteralone,itattemptstobegindialog 28

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onthepossibleeectofenforcingapatentsysteminless-developedcountries.MorepreciselyitexaminesthepharmaceuticaltradingpatternofWTOmembersasitrelatestoitsdevelopmentlevelwhilecontrollingforthecorrespondingtransitionperiod.Inthesecondpartoftheempiricalanalysisthischapterwilloerinsightonacountrylevel;acknowledgingthepossibilityofcountriesinthesamedevelopmentgrouptohaveobservableandunobservablecharacteristicswhichmightallowTRIPStohaveasubstantiallydierentimpact. 2.2EmpiricalFramework 2.2.1DataThedataiscompiledutilizingthreesources:theUnitedNationsCommodityTrade(Comtrade)database;WorldBankDatabankandWorldHealthOrganizationStatistics.AnnualComtradedataiscollectedontheimportsandexports,toandfromallWTOcountriesforanten-yearspan(2002-2011).15PharmaceuticaldatahasbeenaggregatedperWTOdevelopmentclassicationfortherstsetofregressions(1.3.1),andthenpartiallydisaggregatedaccordingtoredenedclassicationlevelsforthesecondsetofregressionanalysis(1.3.2).Thereare161membersintheWTO,thischapterwillusedatacollectedon108members;19developedmembers,59developingmembersand30LDCs.Onlymemberswhohaddatareportedforyearsofinterestwereincluded.16WTOmembersaredividedintofourclassications: 1. DevelopedMembers 2. DevelopingMembers-(self-identifyasdeveloping) 15Priorto2002dataforLDCsandsomedevelopingmemberswassparselyreported.16Itshouldbenotedthatsomeofthedevelopingcountriesremovedfromthesetmighthaveonlybeenmissingonedatapointwhileleast-developedcountriesremovedweremoreoftenthannotmissingseveraldatapoints,butregardlessoftheextent,incompleteinformationwoulddistorttheresults. 29

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3. LDCMembers-(designatedbytheUN) 4. non-LDCmembers-(some`Paragraph6'membersandsomedevelopingmembersgrantedspecialprovisions)aWhiletheWTOusesaspecicrubrictoclassifyLDCs,developedanddevelopingclassicationsarenotastransparent.Developedanddevelopingmembersself-identifyintotheirclassications.Sincethereisnomeaningfulbenettoidentifyasadevelopedmember,onceacountryidentiesasadevelopedmemberitismostoftenacceptedwithoutobjection.Ontheotherhand,ifacountryidentiesasdeveloping,therearebenecialprovisions.Toensureproperself-identication,theWTOallowsmemberstodisputeamember'sclassicationclaim.The\non-LDC"classicationisgrantedtothosenon-LDCmemberswithlessthan35percentoftheirexportsinnon-agriculturalproducts.Itwasestablishedwiththepurposeofgrantingprovisionstooermoreinternationalmarketaccessinadditiontotheprovisionswhicharegrantedtodevelopingmembers.Someofthesecountriesare`Paragraph6'countries;theyaregrantedexemptionsandexibilityasitrelatestothetradingofsomeindustrializedgoods.Forthepurposesofthispaper,wedonotutilizenon-LDCmembers.Tables1-1to1-3liststhemembersofeachclassicationgroupwhichwillbeutilized. 30

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Table2-1. Developed(High)WTOmembers 1Australia2Bahrain3Brunei4Canada5EuropeanUnion6HongKong7Iceland8Israel9Japan10Korea,Republic11Kuwait12NewZealand13Norway14Qatar15SaudiArabia16Singapore17Switzerland18UnitedArabEmirates19UnitedStates 31

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Table2-2. Developing(Middle)WTOmembers 1Albania27Honduras53Swaziland2AntiguaandBarbuda28India54Thailand3Argentina29Indonesia55TrinidadandTobago4Armenia30Jamaica56Tunisia5Barbados31Jordan57Turkey6Belize32KyrgyzRepublic58Uruguay7Bolivia33Macedonia,FYR59Venezuela8Botswana34Malaysia9Brazil35Mexico10Bulgaria36Moldova11Chile37Mongolia12China38Morocco13Colombia39Namibia14CostaRica40Nicaragua15Croatia41Oman16Dominica42Pakistan17DominicanRepublic43Panama18Ecuador44PapuaNewGuinea19Egypt,ArabRepublic45Paraguay20ElSalvador46Peru21Fiji47Philippines22Gabon48Romania23Georgia49SouthAfrica24Grenada50St.KittsandNevis25Guatemala51St.Lucia26Guyana52St.VincentandtheGrenadines 32

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Table2-3. LDC(Low)WTOmembers 1Bangladesh25SierraLeone2Benin26SolomonIslands3BurkinaFaso27Tanzania4Burundi28Togo5Cambodia29Uganda6CentralAfricanRepublic30Zambia7Chad8Congo,DemocraticRepublic9Djibouti10Gambia,The11Guinea12Guinea-Bissau13Haiti14Lesotho15Madagascar16Malawi17Mali18Mauritania19Mozambique20Myanmar21Nepal22Niger23Rwanda24Senegal 33

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Adierence-in-dierence(DD)techniqueisutilizedtoexaminetheimpactthesecondtransitionperiodhashadonthenatureofthetradeofpharmaceuticalproductstoandfromWTOmembers.Developmentclassicationshavebeenre-identiedtomakeanalysisanddiscussioneasiertofollow. 1. Highmembers-developedmember 2. Middlemembers-developingmembers 3. Lowmembers-LDCmembers Table2-4. Averagepharmaceuticaltraderelativetopopulation HighMiddleLow ExportsImportsExportsImportsExportsImports 20020.0700.06090.001770.00520.0000480.0011720030.0850.07470.001730.004150.0000590.0015520040.1020.09030.002070.005060.0000990.0022720050.1140.0990.002370.005840.0000780.0023320060.1350.11420.002660.007190.0001030.0025420070.15940.12940.003300.008500.0001450.003820080.17930.14520.004030.010650.0000910.0060020090.1870.15190.004270.011370.0001410.0054520100.1990.16450.004940.012260.000100.0058820110.2080.18530.006290.014040.0001810.0070 ThedeadlineforMiddlememberstoimplementandrecognizepatentsasspeciedbyTRIPSwas2006.Thispaperwillnotincludedatafrom2005-2007;toeliminateanymismeasurementinducedbyearlyorlateimplementation;andearlyorlatereporting.CountrycharacteristicsdatawerecollectedfromtheWorldBankDatabankandWorldHealth 34

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OrganizationStatistics.Thedatasetincludestotalexports,totalimports,healthexpenditurepercapita,GDPpercapita,humandevelopmentindex,tradingblocsandregion.TradedataisreportedinU.S.dollarvalueasof2011.Dataonpricesandquantityarenotavailableforallthecountriesincludedinthedataset.17Priorpharmaceuticalresearchhasusedthisdatatobackoutthequantity.Whenlookingatcountrieswhicharestructurallydierentinnaturethiscouldproveextremelyproblematic.Thismethodprovidesanestimateofthequantityofpharmaceuticalsconsumed,quantityislessimportantthantheeectivenessofthepillsbeingconsumed.Thechemicalmakeupofdrugsareever-evolving,whatmayrequireadailydoseoneyear,couldrequireaweeklydosethefollowingyear.Usingpriceandquantitydatawithoutinformationonthecompositionanddosageofdrugs,willleadtoresultswhicharediculttointerpret.Anotherconcernisthecompositionofdrugsconsumed.Developedcountriesconsumepharmaceuticalsfromdierentdrugortherapeuticclassesatarelativelyconstantratio,thisisnotthecasefordevelopingandleast-developingcountries.Ascountriescontinuetodeveloptheirmedicalneedscontinuetoevolve.Forthesereasonsitissucienttousethecostasthe\worth"ofpharmaceuticalsasameansofhealthtothatcountry,giventheconstraintoftheirtradingcapabilities. 2.2.2ModelThereareafewchallengesinquantifyingtheeectofTRIPS.First,theimplementationdeadlinewasayearbeforetheGlobalFinancialCrisis.Whileitisassumedtohaveimpactedallcountriesinsomemanner,wecannotsaywithcertaintyifithinderedthepossibleimpactofTRIPSononedevelopmentgroupmoresubstantiallythananother.Secondly,thereisnodocumentationoftheexacttimealldevelopingcountriesimplementedTRIPS.Adeadline 17Limitingthedatasettoonlyincludethosecountriesinwhichpriceandquantitydataisavailablewouldnarrowthescopeofthisresearchandhavelessbroadimplications.Thiswouldlimittheabilitytoestimatetheimpactonaccesstoproperhealthforless-developedmembers. 35

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forcompliancewassetbutdoesnotrequirememberstoreporttheexactdateoryeartheycompliedby.Lastly,wearenotabletorandomlyobserveWTOdevelopingmemberswhowithoutsanctionschoosenottoparticipateinTRIPSandmemberswhochoosetoimplementit.WhilethereareafewdevelopingcountrieswhochoosenottobepartofWTO,itisoftenthecasethatthesecountriesareenduringorrecentlyenduredpoliticalturmoilorotherfactorswhichwouldcontributetothischoice.Thislimitsourabilitytoconstructan`equivalent'treatmentandcontrolgroup.Laterwewilldiscusshowweremedythesesetbacks.Theeconometricmodelusedisalinearregressionapproachbywayofadierence-in-dierence(DD)equation.ThequestionofinterestiswhetherTRIPShassignicantlyimpactedacountry'saccesstopharmaceuticals,usingtheowofpharmaceuticalsasaproxyforaccess.ThegeneralDDmodelwhichwillbeusedis: Yit=+t+0(tTi)+Dit+1Xit+uit(2{1)isthecoecientwhichestimatesthetrendeectofthetreatmentandcontrolgroup.ThevectorXitareasetofcovariatesanduitistheerrorterm.estimatesthetreatmenteectofcountrieswhoimplementedTRIPS.Aboveisthegeneralform,morespecicallywewillmakeuseoftheequationbelow. Yij=+t+0(tTi)+(TiTreatj)+1HealthExpendit+c+uit(2{2)Yijisthedependentvariablewhichvarieswitheachsetofregressions.Inouranalysis,itwillequal,pharmaceuticalexportspercapitaandpharmaceuticalimportspercapita.18t 18Regressionswerealsoranusingthefollowingdependentvariables;thefractionoftotalpharmaceuticalexportstoeachcountry'stotalexports,thefractionoftotalpharmaceutical 36

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capturestheaveragetimetrendacrossallcountriesandamongallyearsinthedataset.Thisallowsustonetoutanycommontrendamongallmembersthroughouttheten-yearspaninquestion,allowingustobetterisolatetheeectofTRIPS.Tiisabinaryvariable;equalto0forthepre-TRIPSyears(foralli=2002,2003,2004),and1forthepost-TRIPSyears(foralli=2008,2009,2010,2011).0estimatesthecoecientontheinteractionbetweent(thetimetrendvariable)andTi(binaryvariableforpost-TRIPSyears)toestimatetheaveragetimetrendduringpost-TRIPSyears.Usingtheinteractionallowsustoaccountforanytimetrendwhichmighthaveoccurredduringpost-TRIPSyearsandmayvaryfromtheoveralltimetrend.Thetreatmenteectiscapturedintheinteractionterm,TiTreatj.WhereTreatj=1forallMiddlemembers,thetreatmentgroupandTreatj=0forallLowandHighmembers,makingupthecontrolgroup.Whilewehavecollecteddataonafewcovariatesasdiscussedpreviously,wewillonlymakeuseofHealthExpendwhichisthehealthexpenditureofeachcountryforagivenyearasafractionofeachcountry'sGDP.Lastly,cestimatesthecountryxedeects.Wedidnotmakeuseofanyspecicationtocontrolfortreatmentgroup-speciceectasitwouldbecorrelatedwiththisterm. 2.3ResultsTheDDspecicationcapturesthedierencebetweentheWTOmemberswhounderTRIPSwereobligatedtoimplementpatentprotectionasofJanuary1,2006,andthosewhowerenot.InusingaDDapproachitisimportanttouseanappropriategroupforthecontrol.InthisinstanceTRIPSdidnotgiveWTOmemberstheabilitytoopt-out,thereforetheclosestapproximationtoasimilargroupasthetreatmentgroup,butnotaectedbyTRIPS'secondtransitionperiod,areWTOmemberswhofallinthedevelopedandLDCcategories.Ashortcomingwiththisapproachis,wearetreatingtheaverageeectofWTO importstoeachcountry'stotalimports,thefractionoftotalpharmaceuticalexportstoGDP,thefractionoftotalpharmaceuticalimportstoGDP. 37

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developed,developingandLDCasequivalents.Tocombatthisissueallregressionsutilizecountrydummiestocaptureanydierenceswhichmayoccuronthecountrylevel.Expectationsfortheempiricalresultsvarywitheachtypeofanalysis,eachdependentvariable,andeachcontrolgroup.TheoverallexpectationisthatHighmemberswouldexperiencearelativeincreaseintheirpharmaceuticaltradeowsandMiddlememberswouldexperiencearelativeincreaseintradeowswhencomparedtoLowmembers.Morespecically,itisexpectedwhenusingLowmembersasthecontrol,Middlememberswillexportmoreandimportmore.Itwasestimatedthatasmuchat76%ofpharmaceuticalimportsofLowmembersisderivedfromMiddlemembers.Itfollowsthat,asMiddlemembersdevelopastrongerpharmaceuticalindustry,theywillhavethemeanstoexportatahigherratetoLowmembers.SomeoftherelativegrowthforMiddlememberswillalsobestimulatedbytradewithotherMiddlemembers.ItalsofollowsasMiddlememberscontinuetodevelopfasterthanLowmemberstheirpurchasingpowerwillalsogrowatafasterrate,providingthemtheopportunitytoaordtoimportpharmaceuticalsatahigherrate.WhenusingHighmembersasthecontrolweexpecttoseedrasticallydierentresults.WhiletheliteraturesuggestspharmaceuticalindustriesinsomeMiddlemembersaregrowing,mostassertTRIPSallowspharmaceuticalcompaniesofHighmemberstoexportmorefreely,aswellasgrowwithoutoverwhelmingfearofpatentinfringementsofMiddlemembers.ForthesereasonsitisexpectedwhencontrollingforHighmembers,onaverageMiddlememberswillexportandimportless. 2.3.1MemberDevelopmentClassicationInFigure1-1itappearsthatonaverageLowandMiddlemembersaregrowingatasimilartrend,ontheotherhand,Middlemembershaveexperiencedsomespikesanddipsduringthetimespan.Ifallmemberscontinuetogrowatasimilarrate,theprobabilityofclosingthegaptoaccesstopharmaceuticalsbetweenHighmembersandLowandMiddleislimited,causinggreaterinequalitiesinaccess.YetasillustratedinFigure1-2,thegrowthrateoftradedoesnotshedlightonallthemovingparts. 38

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Figure1-2illustratesthefractionofthetotaltradeofpharmaceuticals(exportsplusimports)tothepopulationovertheten-yearspaninquestion.WhileHighmembershavealowerpublichealthneed,theyexperienceamoresubstantialincreaseintheirpharmaceuticaltraderelativetotheirpopulation.Itisimportanttonotethatfurtheranalysisisbasedonrelativeaccess/growth.RegressionanalysiswillestimatethepolicyimplicationsTRIPShashadonadevelopmentgroups'accesstopharmaceuticaltrade. Figure2-2. TradeofPharmaceuticalspercapita(in$1,000) 39

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Table2-5. Dependentvariable:pharmaceuticalexportspercapita(in$1,000) ControlGroupsLowHigh t0.0021-0.0127(1.01)(-0.48)t*post-TRIPS0.00090.070***(0.45)(2.89)Middle*post-TRIPS0.0011-0.2526***(0.21)(-3.94)HealthExpend%ofGDP1.138*7.448(1.73)(0.34)cons-0.013-0.0132(-1.41)(-0.10) N403413R20.560.85 Signicance:*10%,**5%,***1% InTable1-5column2itisobservedatastatisticallysignicantlevel,thatpharmaceuticalexportspercapitaforbothHighandMiddlemembersgrewby$70percapitaduringpost-TRIPSyears.Whencontrollingforoveralltimetrends,post-TRIPStimetrends,theratioGDPspendonhealthexpenditures,andcountryxedeects,Highmembersgrewby$252morepercapitarelativetoMiddlemembers.Toassuretheseestimatesarenotdistortedfromonelargeinuxordeclineofexportsduringthepost-TRIPSyears,weutilizeaseriesofpost-treatmentinteractions.TheresultscanbefoundinAppendixTableA-1.ItshowsstatisticallysignicantresultsandincreasinginmagnitudeforallyearswhenusingtheHighmembersasthecontrol.OnaverageHighmembersexportmorepharmaceuticalspercapitacomparedtoMiddlemembersin2011thantheydidin2008.WhenusingLowasthecontrol 40

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resultsforyears2008-2010remaininsignicant,andtheinteractiontermfor2011isslightlysignicant.Table1-6usespharmaceuticalimportspercapitaasthedependentvariable.Thevariableofinterest,Middle*post-TRIPS,whencontrollingforbothcontrolgroupsisstatisticallysignicant.Itestimates,onaverageMiddlemembersimport$24morepercapitapharmaceuticalscomparedtoLowmembers,and$80lessrelativetoHighmembers.WhenrunningtheregressionusingMiddleandLowmembers,onaverageallnationsexperienceanincreaseof$3.70ofpharmaceuticalimportsthroughoutthespanoftheanalysis.Incolumn2thetimetrendvariableisnotsignicant,butthetimetrendinteractedwiththepost-TRIPSbinaryvariableis.Onaveragefrom2008-2011bothMiddleandLowmembersexperienceanincreaseofimportspercapitaof$25.80.Intables1-5&1-6weobserved,whileHighmembershavegainedmoreaccessrelativetoMiddlemembers,bothgroupshaveexperiencedmoreaccessthantheyhadpriortoTRIPS'secondimplementationperiod. 41

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Table2-6. Dependentvariable:pharmaceuticalimportspercapita ControlGroupsLowHigh t0.0037**0.0014(2.23)(0.17)t*post-TRIPS-0.00100.0258***(-0.60)(3.37)Middle*post-TRIPS0.024***-0.0800***(6.03)(-3.98)HealthExpend%ofGDP0.73956.412(1.42)(0.94)cons0.0123**-0.0026(1.68)(-0.06) N410410R20.890.91 Signicance:*10%,**5%,***1% Tables1-5&1-6useddevelopmentcountryleveldatatoanalyzehowtheimplementationofTRIPShasalteredthetradeofpharmaceuticalsamongWTOmembers.ItillustratedthatonaveragewhileimportsoftheMiddlemembersgrewcomparedtothatoftheLow,theoppositeoccurredwhencomparingexportsandimportstoHighmembers.Theseresultsfollowpredictionspreviouslymade.ThisleadsustosuggestthatyearsafterthetransitionperiodhashadarelativelypositiveimpactontheexportsandimportsforMiddlemembers,buthaswidenedthegap,thuscausingmoreinequalitybetweenthegrowthofthepharmaceuticalindustriesinMiddleandHighmembersaswellasbetweenMiddleandLowmembers.WhileitoersinsightintothepossibleimpactTRIPShashadondierentWTOcountrygroups;includingthenexttransitionperiodwillallowtheuseofLowmembersasatreatmentgroupas 42

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well.ItisplausiblethatonceTRIPShasbeenfullyimplementedtheeectcouldbemoreorlesssubstantial.AnalysisusingtheotherdependentvariablesaforementionedcanbefoundinAppendixA,TablesA-2toA-5.Inthenextsection,weexaminehowTRIPSimpactedtheMiddlemembersdierently.WhiletheMiddlememberswereallexposedtothesamedeadline,previousliteraturesuggeststhatsomecountrieswithintheMiddlegroupmightbemoresuitedforthedeadlinethanothers. 2.3.2RedeningtheMiddle:ExaminingtheDevelopingClassicationIntheprevioussections,weranregressionsbyaveragingpharmaceuticalexportsandimportsacrossmembercountrycategoriesperyear.ThisanalysisallowsustoanalyzewhytheWTOchoosedeveloped,developingandleast-developedastherubricforwhichtransitiondeadlineeachcountrywouldhavetoobligeby?Didtheyconsiderhowsuchchoiceswouldimpactthehealthofagivenmember?Empiricalevidenceoftheconvergencehypothesisissplit,theassumptionthatdevelopingcountrieswouldgrowatafasterratethandevelopedcountriesandeventuallyclosethegapdoesnotalwaysholdandbecomesevenmoredicultwhenweapplyittosegmentsofaneconomy.Whileitholdsthatgreaterrelativegrowthisessentialtoclosethegap,weshowedinsection1.3.1thatthisisnotoccurringamongMiddleandHighmembersorMiddleandLowmembers.Inthissection,wewillrethinkwhatmaybeinhibitingMiddlemembersfromnarrowingthegap.Moreparticularly,isitpossiblethatTRIPSmayhaveimpactedcountriesinthesamemembercategorydierently?Forinstance,asmallercountrysuchasBarbadoswhileclassiedasdeveloping,maynothavetheinfrastructureorbusinesspresencetowitnesssubstantialgrowthintheirpharmaceuticalindustry,aswemightexpectinBrazil;alargercountrywithmoreresources.Classiceconomicthoughtassertsthatrmslookingtoprotmaximizewillaimtosellasmanyunitsaspossibletoalleviatetheeectoflargexedcosts. Maskus ( 1998 )attributehighergrowthratesamongsomedevelopingnationstoliberalizedmarkets.Thisallowsfor 43

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theassumptionthatpharmaceuticalindustriesinlargermarketswillgrowfasterthanthoseinsmallermarketsonceIPRsarefullyprotected.Inthissection,weanalyzetradedataonadisaggregatedleveltodetermineifTRIPShasavaryingimpactonsubsetsofthedevelopmentgroup.WehavealreadyprovensomeofthecurrentshortcomingsandinequalitiescausedbyTRIPS;buitisthehopethatfurtheranalysiswillillustratetheseriousnessofsomeofthehealthconcernsofless-developedmembersandacademicshavemadepriortotheapprovalofTRIPS.TRIPShasdisproportionatelyhelpeddierentmembercountries,andweaimtooerinsightastohowandwhy.Figures1-3&1-4below,mapoutthedispersionsofpharmaceuticalexportspercapitaforLowmembersandMiddlemembers.Figures1-5&1-6below,mapoutthedispersionsofpharmaceuticalimportspercapitaforLowmembersandMiddlemembers.ThespreadforFigures1-4&1-6isratherwidewhencomparedtothatofLowmembersinFigures1-3&1-5,furthersupportingourassumptions. Figure2-3. Lowmembers:exportspercapita(in$1,000) 44

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Figure2-4. Middlemembers:exportspercapita(in$10,000) Figure2-5. Lowmembers:importspercapita(in$1,000) 45

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Figure2-6. Middlemembers:importspercapita(in$10,000) Recentlythe InternationalMonetaryFund ( 2015 )releasedapolicypaperproposinganewclassication,itincludesseparatingthedevelopingclassicationintotwoseparategroups.ThesuggestionistogenerateanewclassicationLow-IncomeDevelopingCountries(LIDCs).LIDCswouldconsistofcountrieswhoarePovertyReductionandGrowthTrusteligibleandhaveapercapitaGrossNationalIncomelessthat$2,390.19Whilethisisastart,inthenextsectionweutilizeanothermethod,aswearelessconcernedwithpovertyreductionandmorefocusedoninfrastructurewhichallowsdevelopingmemberstosuccessfullyattractforeigndirectinvestmentsandtechnologicaladvancements( Maskus ( 1998 )). 19ThereareafewexceptionssuchasZimbabweisincludedwhilecountrieswhomeetthequalicationssuchasIndiaandthePhilippinesarenotincludedastheyareconsideredemergingmarkets. 46

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Figure2-7. Tradeofpharmaceuticalsdividedbypopulation PriortoredeningtheMiddlegroupwebrokeitintotwogroupsandduplicatedtherstgure,totaltradeofpharmaceuticalsdividedbypopulationforLow,High,UpperMiddleandLowerMiddlegroups.Inthisillustration,itappearstheLowerMiddleresemblesmoreofwhatishappeningintheLowerratherthantheMiddlegroup.ThisfurthersupportsourbeliefthatTRIPSishavingavaryingaectonmembersoftheMiddlegroup.Themeritsofthenewlyproposedclassicationarevalid,forthepurposeofthispaperwewouldliketofocusonwhatwouldgiveadevelopingcountryanadvantageinestablishingadevelopedpharmaceuticalindustrywhichwepreviouslydiscussed.Wechoosetousenewlyindustrializedcountries(NICs)whichareoftenatermusedtoclassifydevelopingcountrieswhichareexperiencingrapidgrowth.InTRIPStheWTOdoesnotdistinguishMiddlemembers 47

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whoareNICsandMiddlememberswhoarenot,andthusfar,neitherhavewe.Inthissection,theMiddlegroupwillbesplitintotwogroups,thoseMiddlememberswhichareclassiedasbeingNICsandthosewhicharenot(non-NIDCs:non-newlyindustrializeddevelopingcountries).TheNICsinthischapterareidentiedasBrazil,China,India,Indonesia,Malaysia,Mexico,Philippines,SouthAfrica,Thailand,andTurkey.Table1-7providesasnapshotofhowNICscomparetoLDCs,theaveragedevelopingcountriesandtheworldonvariousclassicationusedtorankdevelopmentlevels.ItisimportanttonotethatwhileIndiahasanHDI,lifeexpectancyandGNIbelowtheaveragedevelopingcountry,theyhaveconsistentlydemonstratedtheirabilitytoindustrialize.ItiswidelyacceptedthatIndiahasbeenoneofthemostsuccessfuldevelopingcountriesinestablishingastablepharmaceuticalindustry. 48

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Table2-7. HumanDevelopmentIndexandcomponents HDILifeGNIExpectancypercapita(outof1)(years)(PPP,2011) LDC0.50263.3$2,387Developing0.66069.89,071World0.71171.514,301 Brazil0.75574.515,175China0.72775.812,547India0.60968.05,497Indonesia0.68468.99,788Malaysia0.77974.722,762Mexico0.75676.816,056Philippines0.66868.27,915SouthAfrica0.66657.412,122Thailand0.72674.413,323Turkey0.76175.318,677 Development VeryHigh1.00-0.80High0.799-0.70Medium0.699-0.55Low0.549-0.00 DatacollectedfromtheBarro-LeeEducationalAttainmentDatasetand(UN2014). InTable1-8&1-9thetreatmentgroupwillbeNICs,therearethreecontrolgroups;non-NIDCs,Lowmembers,andHighmembers.Table1-10&1-11usesnon-NIDCsasthetreatmentgroup,ittestsifthereisastatisticallysignicantdierencebetweenthosemembers 49

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inthedevelopinggroupandnotidentiedasaNICrelativetoLowmembers.Table1-8&1-11usespharmaceuticalexportspercapitaasthedependentvariableandTable1-10&1-11usespharmaceuticalimportspercapita. Table2-8. Dependentvariable:pharmaceuticalexportspercapita ControlGroupsnon-NIDCsLowHigh t0.00230.00003***0.0095(0.89)(3.26)(0.16t*post-TRIPS0.0020-0.000090.0686(0.94)(-1.16)(1.33)NICs*post-TRIPS-0.01150.00233***-0.324*(-1.64)(10.87)(-1.90)HealthExpend%toGDP2.2760.0468**11.37(1.23)(2.20)(0.13)cons-0.0187-0.0020***-0.114(-1.60)(-4.63)(-0.31) N309155165R20.550.970.85 Signicance:*10%,**5%,***1% AsevidentinTable1-8column1thereisnostatisticallysignicantdierenceinNICsandnon-NIDCspharmaceuticalexportspercapita.Incolumn3weobserveaslightlysignicantestimateonthetreatmentestimatorwhichfollowswhatwasestimatedinTable1-5column2.InTable1-5itwasestimatedthatonaverageMiddlemembersexport$252lessofpharmaceuticalpercapitarelativetoHighmembers,inthetableaboveweestimatethatonaverageNICsexport$324lessrelativetoHighmembers.Thisresultwasunexpected,butcouldbemotivatedbyNICsabilitytoproducepharmaceuticalsdomestically.Whiledataondomestic 50

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productionisnotreadilyavailable,insection2.4.1wediscussthenatureofthepharmaceuticalindustriesinIndia,Indonesia,Thailand,andBrazil.InTable1-8column2wenoticethatalthoughwewerenotabletoestimateasignicantdierencebetweenMiddleandLowmembers'exportsinTable1-5,herewecanestimateasignicantdierenceamongNICsandLowmembers.Whencontrollingforatimetrend,post-TRIPStimetrend,healthexpendituresandcountryxedeects,NICsexport$2.33morethanLowmembers.NICsmembersalsospend4.68%moreoftheirGDPonhealthexpendituresrelativetoLowmembers.Whiletheseresultsareinteresting,itisnotcompletelyunfounded.ThevastmajorityofLowmembersareresourcelimitedandlacktheinfrastructuretosuccessfullyproducepharmaceuticals,therefore,limitingtheirabilitytoexportinsignicantquantities.Itisalsoimportanttonotethatthedollaramountscanappearsmall,itisimportanttokeepinmindthegenericversionsofsomelife-savingsuchascancerdrugsareavailableinless-developednationsforaslittleasacouplehundreddollarsayear.InTable1-9,whenpharmaceuticalimportspercapitaarethedependentvariableweobservethegapbetweenNICandnon-NIDCmembershasnarrowed.Column3showsbyredeningthetreatmentgroup,thegapbetweenNICsimportsrelativetoHighmembershavegrownby$44morethanthatwasobservedforMiddlemembersinTable1-9($80to$124).Thisresultdoesnotfollowthepredictionspreviouslymade,butuponfurtherthought,theseresultsmaybeduetothelackofavailabilitydataondomesticproductionandconsumptionofpharmaceuticals.Althoughthisdoesnotshedlightonalltheinterworkings,itdoesillustratethatinthefaceoflimitationsofdomesticproductionofpharmaceuticals,non-NIDCsareovercomingaspectsofitbyimportingmore.Thisisessentialaswithlimitedproductioncapabilities,non-NIDCswillbeforcedtorelyonimportstomeetpublichealthneeds.UnfortunatelycomparedtoNICs,LowmembersarenotimportingmorebutgapisnarrowingthanthatwhichwasfoundwhenusingMiddlemembersasthetreatmentgroup.RelativetoNICs,Lowmembersimport$11.44fewerpharmaceuticalspercapitaafterMiddlemembersimplemented 51

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TRIPS.Thegapnarrowedbyroughly$12,comparedtothatwhichwasobservebetweenMiddleandLowmembers(Table1-6).ThisisfurtherveriedinTable1-11,asthegapbetweennon-NIDCsandLowmembersisgrowingby$28. Table2-9. Dependentvariable:pharmaceuticalimportspercapita ControlGroupsnon-NIDCsLowHigh t0.00100.0015***0.0142(0.49)(2.73)(0.78)t*post-TRIPS0.0065***-0.000170.0231(3.55)(-0.33)(1.48)NICs*post-TRIPS-0.0148*0.01144***-0.124**(-2.58)(8.15)(-2.40)HealthExpend%ofGDP1.7560.13110.197(1.17)(0.94)(0.40)cons0.0130-0.00460.0742(1.37)(-1.30)(0.58) N309162162R20.880.940.92 Signicance:*10%,**5%,***1% 52

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Table2-10. Dependentvariable:pharmaceuticalexportspercapita ControlGroupsLow t0.0028(1.10)t*post-TRIPS0.00076(0.31)non-NICs*post-TRIPS0.0024(0.42)HealthExpend%ofGDP1.30*(1.77)cons-0.0159(-1.57) N342R20.56 Signicance:*10%,**5%,***1% 53

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Table2-11. Dependentvariable:pharmaceuticalimportspercapita ControlGroupsLow t0.00415**(2.14)t*post-TRIPS-0.0013(-0.68)non-NIDCs*post-TRIPS0.0284***(6.28)HealthExpend%ofGDP0.7449(1.32)cons0.0089(1.13) N349R20.89 Signicance:*10%,**5%,***1% Redeningthedevelopingclassicationprovidedvaryingresults.AsexpectedLowmemberslacktheabilitytodeveloptheirpharmaceuticalexportmarket,whileNICswereabletoexportsignicantlymore.WhilethegapbetweenNICsandLowgrew,thedierencebetweenNICsandnon-NIDCsexportspercapitaisinsignicant.Thiswasrathersurprisingasweexpectedtheretobeasignicantdierenceinaccessamongindustrializedandun-industrializeddevelopingcountries.InterestinglywefoundawidergapbetweenNICsandHigh,whilethisisnotinherentlybad,itwillbeofgreatinteresttofollowhowthisvariesovertimeandifinfactthisgaptranslatetoalimitationinmembers'abilitytomeettheirpublichealthneeds. 54

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2.4DiscussionThepolicysuggestionsoeredby Kremer ( 2002 )and LanjouwandCockburn ( 2001 )areofextremeimportancewhenanalyzingTRIPS.TheyrecognizedthepitfallofTRIPSasitrelatestothedevelopmentofpharmaceuticalstoaddressspecicdiseasesandsmallereconomies.SomeoftheirpolicyimplicationsfortheWTOhavesincebeenundertakenbylocalgovernmentsandNGOsalthoughnotinitiatedbytheWTOthemselves.India'sgovernmentnotonlyformednewagenciesgearedatdomesticR&D,theyhavealsooeredscalincentivestoapprovedpharmaceuticalcompanies.WhileBrazilwiththenancialsupportfromtheBillandMelindaGatesFoundationandOneWorldHealth,Inchasbeenabletodevelopresearch-intensivepharmaceuticalindustriesfocusedondiseasesspecictothem( Lehman ( 2003 )).ItappearsthatMiddlemembershavebeenabletodeveloptheirpharmaceuticalindustriesinamoresuccessfulmannerthanLowmembersbutthegapbetweenMiddleandHighiswidening.FurtheranalysissuggeststhatNICshavelessaccessthannon-NIDCS,whichwearenotcertainistellingthefullstory.WehypothesizethelackofdataondomesticproductionandconsumptionwithinNICsareinuencingsomeoftheresults.Whilethischaptermakesuseofimportandexportdata,itisthehopethatitisinterpretedasmorethantradeimpact,aspotentialhealtheects.Countrieswiththegreatestpublichealthneedsarereceivingrelativelylessaccess.ItispredictedthatthisdierencewouldwidenthegapofpublichealthindevelopedcountriesrelativetoMiddleandLDCs.Withtheestablishmentofrelativelylimitedaccess,thenextstepistoseehowitmighthaveadirectimpactonhealthoutcomes,suchas;mortalityrates,lifeexpectancy,andincidentratesofspecicdiseases.Inthefuture,wearehopefulthatdataonthenexttransitionperiodandmorespecicdataonthecompositionofpharmaceuticalspurchasedwillbeavailabletoallowforfurtheranalysis.Itwouldbeofinteresttoanalyzedatacollectedontheexports,importsaswellasdomesticproductionandconsumptionofpharmaceuticals,aswellasthosepharmaceuticals,earmarkedforspecicandglobaldiseases.Itwouldalsobeofinterestifwecouldcontrol 55

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forpharmaceuticalswhicharebeingproduceddomesticallybywayofcompulsorylicenses.WhilethischapterestimateddecreasesinpharmaceuticalexportstoLDCsitwouldbeofmoreinteresthowithasimpactedtheexportsofpharmaceuticalsforspecicdiseaseshaschanged.ThisanalysisdoesnotvalidateTRIPSordisclaimitratheritoersinsighttoitsimpact. 56

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CHAPTER3DOINTERNATIONALPOLICIESHELPMANAGEDISEASESSPECIFICTOTHELESS-DEVELOPEDWORLD 3.1BackgroundThemedicalworld'simpactoneconomicdevelopmentsoaredwiththediscoveryofantibiotics.AlexanderFleming'sdiscoveryofpenicillinin1928changedthelandscapeofpublichealth.Antibioticsnolongermadeaninfectionsuchaspneumoniaadeathsentence.Thesediscoveriesalsomademodernmedicalproceduressuchassurgeriesandchemotherapymoresuccessfulbypreventingandtreatinginfections.Accesstobetterpublichealthhasledtoimprovedqualityoflifeandlifeexpectancy.From1900to2000theaveragelifeexpectanciesofOECDcountriesgrewbynearly30years(48.5yearsto78.2years).Inthepriorcentury,itgrewbylessthan7years(38.8yearsto45.1)( Becker ( 2011 )).Itiswidelyacceptedmedicaladvancementsaredirectlyassociatedwiththedeclineinmortalityratesinthetwentiethcentury.Itisalsoacceptedthatthedeclineinmortalityrateshavesignicantlystimulatedeconomicdevelopment.Figure2-1mapsthelifeexpectancyoftwocountriesperdevelopmentclassication.Whiledevelopingcountries,Brazil,andPakistanhaveexperiencedadecreaseinmortalityratesoverthe1950to2009span;theyhavenotbeenabletoclosethegapwithdevelopedcountries,entirely,buthavemadestrides.Conversely,LDCsSwazilandandtheCentralAfricanRepublichaveexperiencedacomplicatedlifeexpectancytrendinlargepartduetoinfectiousdiseases.Duringthelatteryears,thetwoLDCshaveexperiencedalargergaprelativetoDevelopingandDevelopedcountries.1 1WhilethisdoesnotholdforallLDCs,itisnotanuncommonoccurrenceinsub-SaharanAfrica. 57

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Figure3-1. Lifeexpectancy Whilehealthisnottheonlyfactorthatcontributestoacountry'shumancapitalstock,itisanimportantfactor.Asthequalityofpublichealthinless-developedcountriesenhances,theybecomeexposedtoonelessimpedimenttostunttheireconomicandsocialdevelopment.Acknowledgingtheimportantrolehealthplaysinhumancapitalandeconomicdevelopment,thispaperaimstoexplorehoweectiveandtheimpactofinternationalpoliciesgearedatimprovingpublichealthhadatthestartpfthetwenty-rstcentury.Inparticular,itwillanalyzewhetherimprovedaccesstopharmaceuticalsasspeciedbyTRIPS,hashelpedtoalleviatetheburdenofdiseasesthatplaguetheless-developedworld. 3.1.1InternationalPolicyTheneedforinternationalaidandsupporttoless-developedcountriesiswidelyaccepted;theforminwhichitshouldtakeisdisputed.Throughoutthedecades,therehasproventobenotriedandtruemethodwhichwillholdforallnationsinneed.DuringtheAsian 58

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nancialcrisis,Malaysia,wearyofthestipulations,refusedabailoutfromtheInternationalMonetaryFund(IMF).AngusDeatonsuggestsforeignaidcouldcausemoreharmthangoodbyacceleratingcorruptionandunderminingtheimportanceofdemocracy.Usinga10-yearmovingaverage Easterly ( 2003 )illustratedasthepercentageofaidtoGDPdeclined(1970-2000),percapitagrowthrosegradually,outofthenegativeandintothepositive. AcemogluandRobinson ( 2012 )assertsthesuccessofinternationalaidliesheavilyintheinclusivityoflocaleconomicandpoliticalinstitutions.Othersaren'tconvincedthateconomicgrowthiseithernegativelyornotcorrelatedwithinternationalnancialaid. ClemensandBazzi ( 2012 )revisitedpaperswhichmadeclaimsofzerotonegativecorrelation.Afterrevisitingsomeassumptionspreviouslymade,theirresultsweresignicantlydierent.Theauthorsincludealagontheeconomicgrowthvariableandredenedtheinstrumentvariables.Thereisalsomorestraightforwardevidencethat,insomeform,aidhasbeenbenecialincombatingHIV/AIDS,malaria,TB,polioandotherdiseaseswhichplagueless-developedcountries.Itispertinenttounderstandthehowinternationalaidandpolicyimpactanation'spublichealthandeconomicdevelopment.Forthepurposesofthispaper,weareinterestedinhowaparticularinternationalpolicy,TRIPSasinstitutedbytheWTO,mighthavehadanimpactontheincidenceratesofinfectiousdiseasesoftheless-developedpopulations.Specically,wewillexaminehowinternationalpatentprotectiononpharmaceuticalscouldaectthepopulationsofless-developedcountriesabilitytoaccessessentialmedicines,directlyinuencingthepublichealthofagivencountry.InthepreviouschapterwefoundafterthepatentimplementationdeadlineasimposedunderTRIPS,less-developedWTOmembersreceivedrelativelylessaccesstopharmaceuticalsthanthedevelopedmembers,thuscausinggreaterinequality.Wefurtherfoundthatnewlyindustrializedcountries(NICs),whichareahostofcountrieswithinthedevelopingclassication,hadrelativelymoreaccesstopharmaceuticalsthanLDCsbutexportedlessrelativetonon-NIDCs.ThispaperwillexplorehowgreaterinequalityinaccesstopharmaceuticalsinuencedbyTRIPShasimpactedacountry'sincidencerateamonga 59

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hostofdierentdiseases.Todosowemaketheassumptionthataccesstopharmaceuticalshasadirectinuenceontheoverallpublichealthofacountry,especiallyaless-developedcountry. 3.1.2DiseasesThecloseoftwenty-rstcenturywasmarkedwithintenseresearchsurroundingthreemajorinfectiousdiseases;humanimmunodeciencyvirusandacquiredimmunedeciencysyndrome(HIV/AIDS),tuberculosis(TB)andmalaria.In1987theWHOinitiatedtheGlobalProgrammeonAIDSandUNAIDSwasformedin1996.In1993theWorldHealthOrganization(WHO)deemedTBa\globalhealthemergency".In1998theRollingBackMalariaPartnershipwasformedbyvariousinternationalagenciesandledbytheWHO.Thesethreediseasesareoftenreferredtoasthe\bigthree".In2004ithasbeenestimatedthatthesethreediseasesclaimedthelivesof6millionpeopleworldwide.2Thusfar,scientistsarestillinsearchofeectivevaccinationsandmethodstoeradicatethesediseases.Thebigthreevaryinhowtheyarecontracted,HIV/AIDSandTBtransmittedfrompersontopersonandmalariafrommosquitostoperson.Thebigthreediseasearedierentinnaturebutsharesomesimilaritiesandinteractionsmakingthemmoredeadly.SomestrainsofthebacteriafoundinTBandmalariahaveevolvedfromtheirancientversionmakingpreviouslydiscoveredtreatmentlesseective.InrecentyearsithasbeendiscoveredthecombinationofHIVandTBspeedsuptheprogressionofbothdiseasesandisdeadly.In2014therewereoveronemillionnewcasesofTB,Africaaccountedforalmost75%ofthem( Hotez ( 2015 )).Thebigthreehaveproveddevastatingfortheless-developedworld,theyhavealsoalludedscientistwhoseekstondahigh-ecacyvaccine.Withlimitedornoknownvaccineornonaturalimmunity,theonlylong-termsolutionisprevention.Thesecharacteristicsmakethebigthreeuniqueandofextremeimportanceamongthegroupofinfectiousdiseases. 2ThreemilliontoHIV/AIDS,2milliontoTBand1milliontoMalaria. 60

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The WorldHealthOrganization ( 2015 )estimatedthat,asof2014,34millionliveshavebeenclaimedbyHIV-relatedcauses.WhilethenumberofpeoplewhodieannuallyofHIVisonthedecline,in2014itwasstillresponsiblefor1.2milliondeaths.Closeto37millionpeopleworldwidearelivingwithHIV,over25millionofthemresideinsub-SaharanAfrica.Theriskoftransmissiontonewbornshasgarneredagreatdealofattentioninthelastdecade.Thusfareortshaven'tproveneective;mother-to-childtransmissionhasbeenmanagedwitheectiveantiretroviraltreatment.In2014over1millionofthe1.5millionHIV-positivepregnantwomenworldwideavoidedtransmissiontotheirnewbornsbywayofantiretroviraldrugs.TBisthemostdeadlyinfectiousdisease,claiming1.5millionlivesin2014.Over95%ofTBcasesareintheless-developedworld.TBisanancientdiseasethathasatonepointintimeaectedallpopulations.Itstillpresentsthroughouttheworld,butmoreheavilyaectsLDCs.In201458%ofnewcasesgloballywerelocatedinSouth-EastAsiaandWesternPacicRegions.India,Indonesia,Nigeria,Pakistan,ChinaandSouthAfricawereamongthecountrieswhichexperiencedthelargestnumberofnewcasesin2014.Withouttreatment,45%ofindividualswhoareinfectedTBandareHIV-negativeandallindividualswhoareinfectedwithTBandareHIV-positivehavepassedaway(?).Roughlyone-thirdoftheworld'spopulationisinfectedwiththelatentformofthebacteriaandhavea10%chanceoffallingill.Latentcarrierscannotspreadthediseaseiftheyarenotill,unfortunatelymostindividualswithactiveTBdonotgetdiagnosedassuchuntiltheyalreadyputothersatrisk.Itisrarelyusedindevelopedcountries,buttheredoesexistavaccineforTB.TheBacillusCalmette-Guerin(BCG)vaccineisthemostwidelyusedvaccinebutitisverylimited.BCGhasonlyproveneectiveininfantsandecacydependsonlatitude. Roy ( 2014 )compiled14studiesandwith95%condencefounda19%protectiveecacyamongchildren.Whilethisisrelativelylow,otherstudieshaveshownhigherlevelsofprotectionagainstmoresevereformsofTB.Itshouldalsobenoted,althoughalengthyprocesstherearedrugsavailabletotreatTB.Unlikeotherdiseases,detectingTBinvolvesmorethanaurinalysisandbloodtest,itrequiresaskintestandx-raystopositivelyidentifyTB.Themethodofdetectionadds 61

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anotherbarriertoearlydiagnosisandtreatment.Less-developednationslacktheresourcesnecessaryfordetectionandhavelimitedaccesswhentheresourcesareavailable.Inthepastfewdecades,drugresistantstrainsofdiseaseshavebecomemoreprevalent.Multidrug-resistantTB(MDR-TB)isextremelydiculttotreatand,becauseofthis,itisspreadingratherrapidlyincountrieswhereitismostcommonlyfound.India,China,andRussiaaccountforhalfofallnewMDR-TBcasesin2014.SomedrugshaveprovensuccessfulintreatingMDR-TBbuttheeventthersttreatmentinunsuccessful,thenextoptionischemotherapywhichisanextensiveprocess,lastingupwardsoftwoyears.Thelastofthebigthreeismalaria,alife-threateningdiseasewhichisactivein95countriesandputshalfoftheworld'spopulationatriskofinfection.Africaaccountsfor90%oftheworld'scasesand78%ofdeaths;childrenunder5yearsoldaremostsusceptibletoinfectionandclaims70%ofallmalaria-relateddeaths3.Therearevestrainsoftheplasmodiumparasitewhichcausemalaria,withplasmodiumfalciparumclaimingthemostmalaria-relateddeathandmostlyaectingsub-SaharanAfricancountries( Mistry ( 2011 )).Whiletherearecurrentmedicationstotreatmalaria,discoveringavaccinewithhighsuccessratewouldnotjusthelpsolveahealthcrisis,itiseconomicallycompelling.Itisestimatedthatannuallytwobilliondollarsarespentinresearchandpreventioneortsofmalaria.Iftherewereavaccineavailableitwouldcostroughly15%ofthattovaccinateeverynewbornwithanyriskofexposuretothedisease( Bourzac ( 2014 )).In2013GlaxoSMithKlineBiologicals(GSK)andthePATH,MalariaVaccineInitiativeannouncedRTS'S/AS01amalariavaccinewhichtheywereintheprocessofseekingapprovalforbytheEuropeanMedicinesAgency.Asoflate2015,theywereinphase3oftrialsforthevaccine.Preliminaryresultsaredecentbutnotaseectiveasseeninmorewidelyusedvaccinesworldwide( Aponte ( 2007 )). 3Adultsarecapableofdevelopingpartialimmunityoveryearsofexposure,reducingthechancesofinfectionand/orsignicantcomplicationsfrominfection. 62

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Whilethebigthreecontinuetoleavethescienceworldguessing,otherdiseasessuchasthosewhichareclassiedasneglectedtropicaldiseases(NTDs)continuetorunhavoconless-developedcountriesandreceivelimitedattention.Theyareamedicallydiversegroupofconditionsthatarestronglyassociatedwithpoverty,slums,andruralcommunitieswithinlow-incomecountriesandimpairthelivesofmorethan1billionpeopleworldwide.TheDepartmentofControlofNeglectedTropicalDiseasesoftheWHOandhastakenonmajorityoftheresponsibilityforidentifyingandmanagingmethodstotreatNTDs.TheWHOwiththeassistanceof GlobalGenes ( 2016 )identiesthefollowingthe17NTDs:Buruliulcerdisease,Chagadisease,dengueandchikungunya,dracunculiasis,echinococcosis,endemictreponematoses(yaws),foodbornetrematodes,humanAfricantrypanosomiasis(HATalsoknownassleepingsickness),leishmaniasis,leprosy,lymphaticlariasis,onchocerciasis,rabies,schistosomiasis,soil-transmittedhelminthiases,taeniasis/cysticercosisandtrachoma4.EconomicallyNTDsresultinincreasedpoverty,healthcosts,lossofproductivityandoverallobstacleinanation'squesttodevelop.WhiletheneedtoaddressNTDsisofextremeimportance,itismorediculttoquantifytheeectTRIPshashadonthem.WhileNTDsexistthroughouttheworld,therateofnewincidencesisnearzeroinmanyregions.5In2011therewere3,838casesofBuruliulcerdiseasereportedworldwide.Thisincidencewerereportedby8countries,dataonanadditional40countrieswherethediseaseisprevalentwasnotavailable.HumanAfricantrypanosomiasisoftenabbreviatedasHATorknowasthesleepingsicknessinfected6,740newcasesin2011,across14countrieswith5,595residingintheDemocraticRepublicoftheCongoanddatamissingin12othercountrieswheretheinfectiousdiseaseispresent.WhileNTDsareofimmenseimportance,theyaresparselyreportedmaking 4SeeAppendixforadescriptionofeachoftheNTDs5TheWHOsplitstheworldintosixregions,atleastsixNTDshavebeenpresentinallregionsasof2015. 63

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analysisdicult.Intheanalysistofollowwewilluseincidencedataforthebigthreediseasesfordeveloping(Middle)andLDC(Low)members. 3.2EmpiricalFrameworkAlldevelopingandleastdevelopedcountriesreportednewcasesofTBfortheyears2002to2011.Malaria,whilelargelyadiseasewhichaectstheless-developedworld,doesnotinfecteverycountry.Thedatasetconsistsofatleast36developingcountriesand26LDCswhichhavereportednewcasesofmalaria.NewcasesofTBandmalariaareunderestimatedasdetectioncanoftenbeabarriertotreatment.NewcasesofHIVareprevalentin40developingand29leastdevelopedcountries.ThisvalueisanestimateprovidedviaWHO,whiledetectioncanbeabarrierbutthesocialstigma,aswellasfearforonessafteyassociatedwiththedisease,isalsoabarrier. Table3-1. Incidenceper100,000individuals HighMiddleLow TBMalariaHIVTBMalariaHIVTBMalariaHIV 200227.8--169961,1983104782,885200327.2--170941,2063001,0282,838200426.6--167961,2332991,0902,812200525.8--166951,2312941,1752,767200625.5--164901,2142901,0072,726200725.1--161771,2262871,3042,688200824.4--157681,2242791,1462,661200924.3--155721,2272771,6172,629201024.1--151781,2382702,4652,614201124.3--149671,2432652,5852,580 Figure2-2mapsoutnewcasesofTBrelativetopopulationforeachMiddleandLowmembersfrom2002to2011.AsimilargraphincludesHighmembersisprovidedinAppendix 64

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B.FromTable2-1andFigureB-1wenditusefultoeliminateHighmembersfromthisdataset.OnaverageTB,malaria,HIV/AIDs,andNTDsfailtoposeathreattothenationalhealthofHighmembers.Whilesomeofthisdiseasesarestillprevalentinthedevelopedworld,theirincidenceratesareconsiderablylower.Figure2-3$2-4illustratetheincidencerateofmalariaandHIVamongMiddleandLowmembers. Figure3-2. Middle&LowMembers:fractionofnewTBcasesrelativetopopulation 65

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Figure3-3. Middle&Lowmembers:fractionofnewmalariacasesrelativetopopulation Figure3-4. Middle&Lowmembers:fractionofnewHIVcasesrelativetopopulation 66

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Figure2-3isanimportantgraphandonewhichwillbediscussedinmoredepththroughoutthischapter.Ofthebigthree;malariaisundeniabletheleastdeadlyandcostlytotreat.Onemightsuggestthatasaccesstopharmaceuticalsincrease,regardlessofrelativeaccess,youwouldexpectadeclineinincidenceratesamongdiseaseswhicharemost`easily'treated.Yetthisgraphillustratesthisisnotthecase.ItisobservedthattheincidencerateofmalariaamongMiddlemembersisdecliningslightlyandisconsistentlyincreasingforLowmembers. 3.2.1DataThedataiscompiledutilizingtheWorldHealthOrganizationStatistics.Annualdataiscollectedonnewmalaria,tuberculosis,andNTDcases;HIVcasesarebackedoutusingtheHIVrateandannualpopulationsdata.Dataonnewcasesareonlyavailableonforasubsetofthepopulation,fortheremainderdataisrecordedonave-yearbasis.Thedatasetalsoincludespopulation,healthexpenditure,andGDPforaneleven-yearspan(2002-2011).DatahasbeenaggregatedperWTOdevelopmentclassicationfortherstsetofregressionsandthenreassignedintodierentclassicationforthesecondsetofregressions.Thereare161membersintheWTO,thispaperwillusedataavailableon89members;59developingmembersand30LDCs.TheanalysisinthischapterwillexaminetheimpactTRIPShashadonless-developedmembers,forthisreason,wedonotutilizedatafromdevelopedmembers.Dataondevelopedcountriesonthediseasesofinterestislimited.OnaveragedevelopedmembershaveverylowincidenceratesofTBandHIV,andtheincidencesofmalariaareassociatedwithtravelandnotdomestictransmission.Onlycountrieswhoreporteddataforyearsofinterestwereincluded.6WTOmembersaredividedintotwocoreclassications;developingcountriesandLDCs.Laterwewillredenethedevelopinggroupintotwoseparate 6Itshouldbenotedthatsomeofthedevelopingcountriesremovedfromthesetmighthaveonlybeenmissingonedatapointwhileleast-developedcountriesremovedweremoreoftenthannotmissingseveraldatapoints,butregardlessoftheextent,incompleteinformationwoulddistorttheresults. 67

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groups,newlyindustrializedcountries(NICs)andnon-newlyindustrializeddevelopingcountries(non-NIDCs).Adierence-in-dierence(DD)techniqueisutilizedtoexaminetheimpactthesecondtransitionperiodhashadonthepublichealthofmembers.Developmentclassicationshavebeenre-identiedtomakeanalysisanddiscussioneasiertofollow. 1. Middlemembers(59)-developingmembers(9NICsand50non-NIDCs) 2. Lowmembers(30)-LDCmembersThedeadlineforMiddlememberstoimplementandrecognizepatentsasspeciedbyTRIPSwas2006.Thischapterwillnotincludedatafrom2005-2007;toeliminateanymis-measurementinducedbyearlyorlateimplementation,orearlyorlatereporting.DataoncountrycharacteristicswerecollectedfromtheWorldBankDatabankandWorldHealthOrganizationStatistics. 3.2.2ModelThereareafewchallengesinquantifyingtheeectofTRIPS'secondtransitionperiodonthepublichealthoftheless-developedworld.First,wemaketheassumptionthattheGlobalFinancialCrisis,whichoccurredayearbeforetheimplementationperiod,didnothinderacountry'sabilitytomeettheirpublichealthneeds.Whilethiscandistorttheregressionresults,itisnotcertainifitwillinateordeatethem.Secondly,thereisnodocumentationoftheexacttimealldevelopingcountriesimplementedTRIPS.Adeadlineforcompliancewassetbutdoesnotrequirememberstoreporttheexactdateoryeartheycomplyby.Thirdly,thereisnotsubstantialdataavailablefornewcasesofdiseasespriorto2002,itcouldbesuchthatwecouldobserveachangepriortothesecondtransitionperiod;possiblyafter1994whenTRIPSwasrstestablished,orafter1996thersttransitionperiodinwhichdevelopedcountrieswereforcedtoimplementthefullyfunctioningpatentsystemasitrelatestopharmaceuticals.Lastly,wearenotabletorandomlyobserveWTOdevelopingmemberswhowithoutsanctionschoosenottoparticipateinTRIPSandmemberswhochoosetoimplementit.WhilethereareafewdevelopingcountrieswhochoosenottobepartofWTO,itisoftenthecasethatother 68

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factorswhichimpedetheirabilitytobeaWTOmember.Thislimitsourabilitytoconstructan`equivalent'treatmentandcontrolgroup.Laterwewilldiscusshowweremedythesesetbacks. Yit=+t+Dit+1Xit+uit(3{1)Whereisthecoecientoftrendeectofthetreatmentandcontrolgroup.ThevectorXitareasetofcovariatesanduitistheerrorterm.estimatesthetreatmenteectofcountrieswhoimplementedTRIPS.Aboveisthegeneralform,morespecicallywewillmakeuseoftheequationbelow. Yij=+t+0(tTi)+(TiTreatj)+c+uit(3{2)Yitisthedependentvariablevarieswitheachsetofregressions.Itisequalto;theincidencerateofthebigthree,malaria,TBandHIV.Tiisabinaryvariable;equalto0forthepre-TRIPSyears(suchthati=2002,2003,2004),and1forthepost-TRIPSyears(suchthati=2008,2009,2010,2011);tiisatrendvariablewhichinteractswithTitoestimatetheaveragetrenddierencebetweenpreandpost-TRIPSyears.Thevariableofinterestforallregressionsistheinteractionterm,TiTreatj.WhereTreatj=1forallMiddlemembers,andthusinthetreatmentgroup,forallothermembers(LowandHigh)Treatj=0makingupthecontrolgroup.ccapturescountryxedeects. 3.3Results 3.3.1MemberDevelopmentClassicationItishypothesizedthatgreataccesstopharmaceuticalswillhelptodecreasetheincidencerateofsomediseasesifnotall.InChapter1itisobserved,MiddlemembershavemoreaccessthanLowmembers,thereforeitwouldfollowthatonaveragetheytoowouldexperiencearelativedecreaseinincidencerates.Althoughdevelopingcountrieshavegreatchancesofincreasedpublichealth,itisnotcertainthiswilltranslateintolowerincidencerates.Duetothenatureofthebigthree,itcouldbedicultforlargernationstomanagethesediseases. 69

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Table3-2. Dependentvariable:incidencerateperyear ControlGroup:LowMembers BigThree t-0.0039(-0.13)t*post-TRIPS-0.0554**(-2.10)Middle*post-TRIPS0.120*(1.92)cons11.68***(37.41) N(Treat+Controlperyear)380R20.99 Signicance:*10%,**5%,***1% 70

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Table3-3. Dependentvariable:incidencerateperyear ControlGroup:LowMembers BigThree t-0.0213(-0.73)t*post-TRIPS-0.0548**(-2.10)Middle*post-TRIPS(2008)0.759(1.08)Middle*post-TRIPS(2009)0.1454*(1.91)Middle*post-TRIPS(2010)0.2016**(2.41)Middle*post-TRIPS(2011)0.2976***(3.19)cons11.78***(37.70) N380R20.99 Signicance:*10%,**5%,***1% InTable2-3,onaverageMiddlemembershavea12,100morecasesoftheBigThreerelativetoLowmembersper100,000individuals.TheestimatesthatleadustostatethatwhileMiddlemembersbenetedfromgreateraccesstopharmaceuticalsduringpost-TRIPSyears,itdidnotnecessarilytranslateintoincreasedpublichealthrelativetoLowmemberswhenexamingthebigthree.Conversely,incidenceratesoverallarefallingforbothgroups.Whiletheseresultsweren'texpecteditisplausibleassomeMiddlemembersarefairlydensely 71

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populatedallowingdiseasessuchasTBandHIVtospreadquickerthanasmallless-denselypopulatedcountrymightexperience.OnaverageMiddlemembersalsohavehighpopulationgrowthrates.Thefollowingtwotables,useeachofthebigthreeincidencesandincidenceratesseparatelytoestimatetheimpactperdiseasetohelpshedlightontheunexpectedresultandhelpdetermineifoneofthethreemightbedrivingtheresults. Table3-4. Dependentvariable:incidencerateperyear ControlGroup:LowMembers MalariaTBHIV t0.0013-1.55e-06-0.0033(0.82)(-0.06)(-0.10)t*post-TRIPS0.00114-0.0009***-0.0832***(0.78)(-3.40)(-2.84)Middle*post-TRIPS-0.0117***0.00022***0.2753***(-3.38)(3.74)(3.97)cons0.0575***0.00029*0.1665(4.48)(1.94)(1.06) N(Treat+Controlperyear)415623483R20.700.980.99 Signicance:*10%,**5%,***1% EstimatesfromTable2-2showtheoverallimpactoftheBigThree,Table2-3estimatesthatalargeportionoftheeectismotivatedbynewHIVcases.InTable2-3thereisadecreaseof1,200newmalariacasesper100,000peopleinMiddlemembersrelativetoLowmembers.In2011thepopulationofallLDCswasabout850millionpeople,thereforeonaverageLowmembershadover1millionnewcasesofMalariarelativetoMiddlemembersduringpost-TRIPSyears.Thereisanincreaseof20ofnewTBcasesper100,000peopleinMiddlemembersrelativetoLowmembersandanincreaseof27,500newHIVcases.These 72

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estimatesallowustore-examineTable2-2andinferthattheresultswereprimarilydrivenbytheHIVrate.InTable2-3theestimatesoftheinternationaltrendvariableillustratethatinternationaleortstodecreaseTBandHIVintheless-developedworldhavebeensuccessful.Relativelyspeaking,afterthesecondimplementationperiodofTRIPSLowmembershaveexperiencedgreaterpublichealththanMiddlemembersasitrelatestoTBandHIVbuthavenotexperiencedsuchwithMalariathemosteasilytreatofthebigthree.Inthenextsection,weredenetheMiddlegrouptodetermineifTRIPShaveavaryingaectonNICsandnon-NICs. 3.3.2RedeningtheMiddle:DoNICsHaveanAdvantageinTreatingSpecicDiseases?Intheprevioussection,weranregressionsgearedatestimatingtheimpactofTRIPSonLowmemberspublichealthrelativetoMiddlemembers.AsdoneinChapter1wewillredenetheclassications;asitwasproventhattheeectontheMiddleclassicationvaried.PharmaceuticalindustriesinlargermarketswillgrowfasterthanthoseinsmallermarketsonceIPRsarefullyprotected,thereforeMiddlememberswhoarecapableofprogressingtheirindustriessignicantlyquickerthanotherMiddlememberswillexperiencegreateraccesstopharmaceuticalsandinturnagreateropportunityforincreasedpublichealth.Forthepurposeofthispaper,wewouldliketofocusonwhatwouldgiveadevelopingcountryanadvantageinmeetingthepublichealthneedsoftheirpopulation.FollowingtheanalysisinChapter1,wechoosetousenewlyindustrializedcountries(NICs)whichareoftenatermusedtoclassifydevelopingcountrieswhichareexperiencingrapidgrowth.InTRIPStheWTOdoesnotdistinguishMiddlememberswhichareNICsandMiddlememberswhoarenot,andsofar,neitherhasthispaper.Inthissection,theMiddlegroupwillbesplitintotwogroups,thoseMiddlememberswhichareclassiedasbeinganNICsandthosewhicharenot,non-NIDCs(non-newlyindustrializeddevelopingcountries).Inthepriorchapter 73

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wementionedthepitfallsofnothavingsucientdatatoincludedomesticproduction,thisfollowsforthisanalysisaswell. Figure3-5. NICs&non-NIDCs:fractionofnewTBcasesrelativetopopulation 74

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Figure3-6. NICs&non-NIDCs:fractionofnewmalariacasesrelativetopopulation Figure3-7. NICs&non-NIDCs:fractionofnewHIVcasesrelativetopopulation 75

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ExplicitlanguageinTRIPSseekstoimprovethepublichealthofless-developedmembers.PreviouslyweshowedthatwhileaccesstopharmaceuticalshasimprovedforallWTOmembersafter2006ithasbeendisproportionateinitseect.Italsofollowsthatthecountriesthatgainlessaccess,whiletheyareinmoreneed,willnotexperiencebetternationalpublichealth.BydisaggregatingtheMiddlegroupthissectionofanalysiswillaimtodeterminehowNICs'accessthepharmaceuticalsandinturnnationalpublichealthmayvarysignicantlyfromtheotherdevelopingmembers(non-NIDCs)andLowmembers.Inthefollowingregressionsweusenon-NIDCSandnon-NIDCsplusLDCsandthetwocontrolgroups7. Table3-5. Dependentvariable:incidencerateofbigthreenewcasesperyear ControlGroups non-NIDCsnon-NIDCsandLow t0.00172-0.0064(0.19)(-0.23)t*post-TRIPS-0.0417-0.0443*(-1.33)(-1.85)NICs*post-TRIPS0.2442**0.3022***(2.17)(2.91)cons5.518***11.62***(40.81)(37.87) N(Treat+Controlperyear)234380R20.990.99 Signicance:*10%,**5%,***1% 7Inthepriorpaperweprovedthatnon-NIDCsaccesstopharmaceuticalspost-TRIPSresembledthatofLowmembers 76

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InTable2-4bothcontrolgroupsexperienceastatisticallysignicantdecreaseintheincidencerateofthebigthree.RelativetoNICs,non-NICs'incidencerateofthebigthreefellby24%.WhenusingtheLowmembersandnon-NIDCsasacontrolincidencerateofthebigthreefellby30%.ComparedtotheresultsfromTable2-2thereisalargerdierencebetweenNICsandLowplusnon-NIDCsthanwasbetweenMiddleandLow. Table3-6. DependentVariable:IncidenceRateofnewcasesperyear ControlGroups non-NIDCsnon-NIDCsandLow MalariaTBHIVMalariaTBHIV t0.00049-2.38e-060.00400.00196-0.000013-0.159(1.22)(-0.08)(0.13)(1.22)(-0.48)(-0.49)t*post-TRIPS-0.00087**-0.00004*-0.0318-0.0008-0.00005**-0.0478*(-2.47)(-1.69)(-1.19)(-0.59)(-2.29)(-1.73)NICs*post-TRIPS0.0020*0.00016*0.2026**-0.00330.00025**0.3446***(1.92)(1.79)(2.04)(-0.69)(2.49)(2.63)cons0.00040.0003**0.798***.0639***0.00036**0.428**(0.31)(2.31)(6.79)(4.96)(2.46)(2.72) N262413280415623483R20.790.980.990.690.980.99 Signicance:*10%,**5%,***1% ThereareafewimportantaspectsoftheHIVandAIDSepidemicwhichcouldgetlostintheresults.LowmembersexperiencelowerHIVratesshouldnotbetoosurprisingastheyexperiencedahigherinfectionrateintheearly2000's.Someofthedevelopingnations,specicallythoseinAsiaexperiencedasteepdropininfectionratesduringthelate1990'sandbegantoleveloutinthe2000's.UNAIDscreditspropereducationoninfectionasasubstantialcontributortothis.Ontheotherhand,someLowmembershavenotbeguntoseemuch 77

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progressuntiltheearly2000's.Someduetolackofeducationandagreatpartduetolackofwidespreadacceptanceattheindividualandgovernmentlevel.In2000SouthAfrica'sPresidentandHealthMinisterpubliclyacknowledgedtheirdisbeliefthatHIVcanbeattributedtoAIDS. 3.4FurtherDiscussion:PoliciestoAddressSpecicDiseasesinLess-DevelopedNationsDevelopedcountries'responsetothepublichealthneedfortheless-developedworldhasbeenunreliableandoftenabsentwithoutinternationalpressure.Less-developedcountriesmustlookwithinortoeachothertohelpmeettheirneedtoaddressspecicdiseases,includingthebigthreeandNTDs.AftertheoriginalsigningofTRIPS,less-developednationsacknowledgethisandmadethedecisiontoghtasone,evenifitputtheirindividualnationatadisadvantage.LDCssupportedthechangesthatcametoTRIPSundertheDohaRound,althoughitspecicationscouldnotberealizedbymajorityoftheLDCs.Onethoughtinsupportofthiscouldbewhiledevelopingcountriescontinuetogrowanddeveloptheirpharmaceuticalindustries,LDCsmaynotreapthebenetsimmediately,butintheyearstocomedevelopingnationswillbeabletooerlow-costessentialmedicinestoLDCs. 3.4.1CountryLevelAcknowledgingthelackofinternationalsupportintreatingspecicdiseases,andtheextenttowhichpoorpublichealthstuntseconomicgrowth,governmentsandnationshavebecomemoreinvestedinaidingeortstoimprovethelandscapeoftheirpublichealth.Theseeortsincludenancialincentivestormsaswellasgovernment-nancedprogramstopromotehealtheducation.OneexampleofhowthiscanbeseeninPeru,adevelopingcountrywhomadeuseofhowwidelymobilephonesareusedtohelpsupplypreventivecareinformation.In DammertandGaldo ( 2014 )theyusearandomized,large-scaletrialtotesttheeectivenessoftheuseofmobilephonesinrelayinginformationonpreventivemeasurein 78

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dengue-endemicareasofPeru.UsingtheBreteauIndex,8theyndhouseholdswhoreceiveinformativetextslie0.10standarddeviationsbelievethecontrolgroup.Theyalsodidnotndanystatisticallysignicantdierencebetweenhouseholdswhoreceivedmonetarybenetsforimplementingpreventivemeasuresandthosewhenreceivednobenets.Roughly75%oftheworld'shouseholdsaremobilesubscribersand90%haveaccesstomobilenetworks.Whilethismethodalonemaynotsingle-handlymanagethedenguevirusinPeru,itisonemethodofhowless-developednationsarecapableofintroducingmethodsofmanagingandtreatingdiseases.India'sblueprintforforgingastablepharmaceuticalindustryhasbeenfairlysuccessful.Theirpharmaceuticalindustryhasfocusedmostoftheirresourcesonproducinggenerics.Currently,over70%ofdrugsproducedaregenerics.Asof2015,itisestimatedthatIndiaisthethirdlargestproducerofpharmaceuticalsintermsofvolume(10%oftheglobalpharmaceuticalindustry)andthirteenthintermsofvalue.Indiacontinuestoexperiencesteadyandstronggrowthinthisindustry,butsomehavearguedgrowthdidn'ttranslateintoaccessformostofthepopulation.Intheearly2000'sstudiesshowedthatmanyIndianswerepricedoutofthemarketofessentialmedicines.In1997theGovernmentofIndiaformedtheNationalPharmaceuticalPricingAuthority(NPPA),theyareresponsibleformakingdrugsontheDrugPriceControlOrderavailableandaordable.Unfortunatelythelistoriginallyconsistedof347drugsbutpriorto2013ithaddwindleddowntoonly76drugs.Somehavearguedtheactionstakenbythegovernmentwasanecessitytoencouragethegrowthoftheindustry.Allowingrmstochargehigherprices,gavethemtheprotmargintogrowandeventuallylowertheirprices.Regardlessoftherationale,itisafacttheindustrydidgrowsubstantiallyandin2013theGovernmentchangedtheirfocusandgrantedNPPAtheauthoritytoregulatethepriceof348essentialmedicines9.In2014theGovernmentmadeanotherstep 8Anobjectivemeasureofdenguerisk.9Ofthe348,itincludedtheoriginal347. 79

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byaddinganadditional10810drugsdeemedlife-savingtothelistandplacedapricecapon3611moredrugs( NationalPharmaceuticalPricingAuthority ( 2014 )).Itappearedthecountrymadeashift,thegrowthoftheindustrynowallowedthenationtoplacepricecontrolsdrugsthattreatedmorethanjustinfectiousdiseases.Accordingto Ahmand ( 2014 )theseactionswereseenasaparadigmshiftfromwhatwasbelievedtobeanindustry-friendlypolicytohealthpolicy.Indonesiahasalsomadesubstantialprogressinthepharmaceuticalmarket.Asof2011,theyarehometosixpharmaceuticalsubsidiariesofJapan,therstdatesbacktothe1960's.Inthe1990'stheIndonesianGovernmentbeganapushtopromotedomesticrmsandbeganinvestinginlocalproduction;70%ofthepharmaceuticalmarketshareiscontrolledbylocalcompanies.Unfortunatelysomelocalcompanieshavestruggledduetothehighcostsassociatedwiththeimportationofrawmaterials. UnitedNations ( 2011 )credittechnologytransferbywayofJapanesepharmaceuticalpracticesandcompaniesasamajorstrengthinthedevelopmentofIndonesia'sindustry.TheThaiGovernment12alsousedTRIPSlanguageandtheguidanceofinternationalagenciestoissuea`governmentuse'compulsorylicensesforsevendrugs.ThisgrantedthemtheabilitytoproducedrugstotreatHIV,heartdisease,breastcancer,lungcancerandleukaemia.Withinternationalpressuringloomingsomedevelopingcountriescontinuetopushtheirpublichealthagenda.Less-developedeortstopushforimprovementsinpublichealthwhetherbywayoftechnologyoraccesstodrugs,.hasbeenandwillcontinuetobeessentialtotheirdevelopment 10Currentdialogueoverthese108drugsmayleadtothisactionbeingreversed.Manypharmaceuticalcompanieshaveexpresseddiscontentandthatitmayleadthemtodiverttheirresearcheortstotheproductionofotherdrugs,thuslimitingtheavailabilityofsomeofthese108drugscompletely.Currently,eortssuchattaxbenetsareintalkstohelprelaxsuchconcern.11Theynowhadtheabilitytoplacecontrolsonglobaldiseasessuchcancer,cardiovascularandanti-diabeticdrugs.12Thailandhasauniversalhealthcareplan. 80

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IndiaandIndonesiaarejoinedseveralotherless-developednationsinmakingHIVtreatmentaordable,buttheystandaloneintheircommitmenttomakingmedicationforglobaldiseasesaordableandtheireortscouldmotivateothercountriestotakesimilaraction.Cancerandheartdiseasearenotailmentsthatonlyaecthigh-incomecountries,theyareglobaldiseaseanddiseasessomedevelopingcountrieshavenowmadethestepsnecessarytoaddress. 3.4.2InternationalSupportTheWHOandotherNGOshavebeenasignicantsupportsystemforless-developedcountriesastheyhavesoughttondwaytomeettheirpublichealthneeds.Inthelate1990'sandearly2000'stheWHOheldsemi-secretiveconferencesintheattempttoeducateless-developednationsontheirrightswithinthelanguageofTRIPS.Thiswasanessentialresourceforless-developedmembers.UnderTRIPStheWTOrecommendedtheWIPOastheagencytohelpwithpatentimplementationandunderstandingthespecicationsofit.ItiswidelythoughtthattheWIPOoersastrongU.S.-EUsupportivestance( Abbott ( 2002 )).TheWHO,ontheotherhand,oftenoeredadvicewhichstronglyfrownedonuponthedevelopedmembersoftheWTO.InresponsetotheJointPapertheless-developedmembersoftheWTOleinJuneof2001,theU.S.amongotherthingssuggestedthatmembersstoprelyingondocumentsbeingprovidedbyoutsideagenciesasadviceonTRIPSandthattheyobligebytheruleofTRIPSasitwasmeanttobeinterpreted.AmongtheadvicegivenandworkshopsheldbytheWHO,thestrongestemphasishasbeenontheimportanceofissuingcompulsorylicenses.Inthelast10years,therehasbeenanincreaseincompulsorylicensesusedforHIV/AIDSandcancertreatments,life-savingdrugs.TheWHOhasalsopromotedmemberstomakeuseofothermemberstechnologicaladvancementsbywayofparallelimports.Thisisimportantas,evenintheinstancethatacountryissuesacompulsorylicense,itmaynotbecost-eectiveforadomesticrmtoproducethegenericmakingparallelimportsamoreviableoption.Lastly,theWHOhasalsorecommendedthateachmembersetuptheirownpatentprotectionreviewpolicyastheyseetfortheirpopulation.PharmaceuticalswhichaddadditionalhealthbenetsintheU.S.may 81

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varysignicantlythanthoseinIndia.ThisgrantsIndiaandotherless-developedmemberstherighttodenythepatentofaproductthatmayalreadybeavailableinanotherform.Thiswillalsoimplyagenericversionofthedrugunderpatentwillbeavailablesooner.Internationalagencieshavealsoencouragedparallelimports.Mostpharmaceuticalcompanieshavelittletogainbymakingdrugsavailableinmarketswhereanindividual'swillingnesstopayisextremelylow,yetitcanaddsignicatnhealthbenettoLDCs.BymakingthesedrugsavailableinLDCsdoesnotimpacttheirbottomlineorunderminetheR&Deorts,aslongtheyarecondentthedrugswillnotndahomeinadevelopingordevelopedcountry.WhiletheWHOhastakenaverystrongstanceonTRIPSandpublichealth,otherNGOs,andinternationalagencyhasexpressedtheirsupport.TheUN'sHighCommissionforHumanRightshasexpressedtheirsupportofnationsusingcompulsorylicensesandparallelimportstomeettheirhealthneeds.Whileafewdevelopednations'suchasNorwayhavebeensteadfastintheirsupportofless-developednationswiderinterpretationofTRIPS,theEUhassoftenedtheirstancesome. 82

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CHAPTER4CONCLUSIONWhilethepurposeofthispaperistoestimatetheimpactTRIPShashadonthepublichealthofless-developedcountries,wedonotcontendthattherearenototherfactorscontributingtothis.AnygrowthorgreaterinequalityisnotcreditedsolelytoTRIPS.WhilewestrivetoexploremoreapproachestoestimatetheeectofTRIPS,thispaperillustratestheextenttowhichtheless-developedworldhasbeenabletoimprovepublichealthasitrelatestospecicdiseasesandalsoillustratestheunequalgrowthinpublichealthacrossdierentdevelopmentclassications.Itisthehopethatinthecomingyearsmoredataonthecompositionofdrugswillallowustotrackhownewdrugsenteringanewmarketimpactthemanagementofcertaindiseases.Unfortunatelywedonothavedataontheexacttypeofpharmaceuticalsindividualcountriesimportedandexportedwhichcouldhelpshedmorelightonwhatisoccurring.Astimepassesinterestinhowcountriesareaddressingspecicdiseasewillbeofgreatconcernandimportantinaidingthehealthofotherless-developednations.India,Thailand,Turkey,SouthAfricaandBrazilareafewoftheless-developedmembersthatcontinue,toinvestindomesticrmsresearchingdiseasesspecictothem,grantingcompulsorylicenses,makinguseofparallelimportsandbeingstrictintheirpatentreviewprocess. Hoen ( 2004 )believednationswouldbefacedwiththedicultdecisionofmeetingthehealthneedsoftheircountryorfacesanctions;thecountriespreviouslymentionedhavechosenthelatter.TheycontinuetogovernandenforcecontingentontheirinterpretationofTRIPSeveninthefaceofU.S.-EUtradepressure.Onemightdrawaparallelbetweendevelopednationspoliciesintreatingrarediseasesandless-developednationscommitmenttotreatingspecicdiseases.WhiledevelopednationshavethetaxbaseandlegalsovereigntytopromotetheR&Dofrarediseases,less-developedmembersdonotandthereforeseekallwithintheirpowertodoso.Attheendallnations,least-developed,developinganddevelopedhaveadutytoprotectthe 83

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healthoftheirpopulations,somehavemoreattheirdisposal,buteachcountryshouldattempttouseeverytoolwhichisavailabletodoso.Inthefuture,itwillbeofinteresttocontinuetomonitortheuseofcompulsorylicensesforspecicdiseasesandthenewfrontieroftheiruseinglobaldiseases.Whilenationscontinuetoplaceemphasisonspecicdiseases,aretheysimultaneouslyaddressingglobaldiseases?WhileTRIPSmighthaveputtheminadecitforafewyears,didtheyuseitasmotivationtoleapfrogintoastrongandstablepharmaceuticalindustry?Itwillalsobeusefultoanalyzehowissuingcompulsorylicensesmighthaveencouragedthegreateruseofparallelimports.Mightless-developedcountriesbegantospecializeandrelyonparallelimportstomagnifytheiraccess.WillothermembersfollowIndia'sstepandbecomemorestrictinwhotheygrantpatentsto. 84

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APPENDIXANOTESANDADDITIONALTABLESFORCHAPTER1Note:Duringtheprocessofthispaperweattemptedtodocountrypairanalysis,unfortunatelythelimitationsofthedatasetcreatedlimitedvariableproblems.Itisourhopethatasmoredatabecomesavailablethisissuewillberesolved. TableA-1. DependentVariable:PharmaceuticalExportspercapita(in$1,000) ControlGroupsLowHigh t0.00090.0124(0.43)(0.47)t*post-TRIPS0.00090.0724***(0.45)(3.04)Middle*post-TRIPS(2008)0.0055-0.2295***(1.02)(-3.36)Middle*post-TRIPS(2009)0.0042-0.3151***(0.65)(-4.50)Middle*post-TRIPS(2010)0.0079-0.3949***(1.03)(-5.05)Middle*post-TRIPS(2011)0.0163*-0.4699***(1.81)(-5.34)HealthExpend%ofGDP0.4522.757(0.58)(0.13)cons-0.0093-0.0310(-0.99)(-0.23) N(Treat+Controlperyear)403413R20.560.85 Signicance:*10%,**5%,***1% 85

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TableA-2. DependentVariable:FractionofPharmaceuticalExportstoGDP(per$100,000) ControlGroupsLowHigh t0.0150-0.0137(0.62(-0.31)t*post-TRIPS0.00320.1079***(0.14)(2.63)Middle*post-TRIPS-0.0013-0.3785***(-0.02)(-4.02)cons-0.0483-0.0105(-0.46)(-0.05) N(Treat+Controlperyear)403427R20.700.83 Signicance:*5%,**10%,***1% 86

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TableA-3. DependentVariable:FractionofPharmaceuticalImportstoGDP(per$100,000) ControlGroupsLowHigh t0.01280.0119(0.44)(0.47)t*post-TRIPS0.03110.0233(1.13)(1.00)Middle*post-TRIPS0.01660.0544(0.26)(1.03)cons0.996***0.997***(8.04)(8.81) N(Treat+Controlperyear)410424R20.880.90 Signicance:*5%,**10%,***1% 87

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TableA-4. DependentVariable:FractionofPharmaceuticalExportstoTotalExports ControlGroupsLowHigh post-TRIPS0.0000.012***(0.02)(5.55)Middle*post-TRIPS0.000-0.012***(0.13)(-4.65)HealthExpend%ofGDP0.001-0.000(1.00)(-0.06)cons-0.0030.001(-0.34)(0.05) N(Treat+Controlperyear)395406R20.860.92 Signicance:*10%,**5%,***1% 88

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TableA-5. DependentVariable:FractionofPharmaceuticalImportstoTotalImports ControlGroupsLowHigh post-TRIPS0.0000.001(0.06)(1.12)Middle*post-TRIPS-0.001-0.002(-0.49)(-1.66)HealthExpend%ofGDP0.003***0.002***(3.35)(4.55)cons0.034***-0.013(3.86)(-1.48) N(Treat+Controlperyear)406412R20.850.91 Signicance:*10%,**5%,***1% 89

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APPENDIXBDATAFORCHAPTER2 Rate.jpgRate.bb FigureB-1. AllMembers:TheFractionofNewTuberculosisCasesRelativetoPopulation 90

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TableB-1. DependentVariable:NewCasesperyear ControlGroup:LowMembers BigThree post-TRIPS2,828,790(1.31)Middle*post-TRIPS1,632,810(0.62)cons170000000(14.58) N(Treat+Controlperyear)380R20.99 Signicance:*10%,**5%,***1% TableB-2. DependentVariable:Newcasesperyear ControlGroup:LowMembers MalariaTBHIV post-TRIPS289,906***2,1663,363,218**(5.30)(0.93)(2.20)Middle*post-TRIPS-306,887***-5,142*435,483(-4.64)(-1.80)(0.22)cons-22,6482,27012,600,000***(-0.10)(0.36)(3.03) N(Treat+Controlperyear)415623483R20.640.990.99 Signicance:*10%,**5%,***1% 91

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NeglectedTropicalDiseaseList(WHO) 1. Dengue:Amosquito-borneinfectioncausingu-likeillnessthatmaydevelopintoseveredengueandcauselethalcomplications. 2. Rabies:Apreventableviraldiseasetransmittedtohumansthroughthebitesofinfecteddogsthatisinvariablyfataloncesymptomsdevelop. 3. Trachoma:Achlamydialinfectiontransmittedthroughdirectcontactwithinfectiouseyeornasaldischarge,orthroughindirectcontactwithunsafelivingconditionsandhygienepractices,whichleftuntreatedcausesirreversiblecornealopacitiesandblindness. 4. Buruliulcer:Adebilitatingmycobacterialskininfectioncausingseveredestructionoftheskin,boneandsofttissue. 5. Yaws:Achronicbacterialinfectionaectingmainlytheskinandbone. 6. Leprosy:Acomplexdiseasecausedbyinfectionmainlyoftheskin,peripheralnerves,mucosaoftheupperrespiratorytractandeyes. 7. Chagasdisease:Alife-threateningillnesstransmittedtohumansthroughcontactwithvectorinsects(triatominebugs),ingestionofcontaminatedfood,infectedbloodtransfusions,congenitaltransmission,organtransplantationorlaboratoryaccidents. 8. HumanAfricantrypanosomiasis(sleepingsickness):Aparasiticinfectionspreadbythebitesoftsetseiesthatisalmost100%fatalwithoutpromptdiagnosisandtreatmenttopreventtheparasitesinvadingthecentralnervoussystem. 9. Leishmaniases:Diseasetransmittedthroughthebitesofinfectedfemalesandiesthatinitsmostsevere(visceral)formattackstheinternalorgansandinitsmostprevalent(cutaneous)formcausesfaceulcers,disguringscarsanddisability. 10. Taeniasisandneurocysticercosis:Aninfectioncausedbyadulttapewormsinhumanintestines;cysticercosisresultswhenhumansingesttapewormeggsthatdevelopaslarvaeintissues. 11. Dracunculiasis(guinea-wormdisease):Anematodeinfectiontransmittedexclusivelybydrinking-watercontaminatedwithparasite-infectedwatereas. 12. Echinococcosis:Infectioncausedbythelarvalstagesoftapewormsformingpathogeniccystsinhumansandtransmittedwheningestingeggsmostcommonlyshedinfecesofdogsandwildanimals. 13. Foodbornetrematodiases:Infectionacquiredbyconsumingsh,vegetablesandcrustaceanscontaminatedwithlarvalparasites;clonorchiasis,opisthorchiasisandfascioliasisarethemaindiseases. 92

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14. Lymphaticlariasis:Infectiontransmittedbymosquitoescausingabnormalenlargementoflimbsandgenitalsfromadultwormsinhabitingandreproducinginthelymphaticsystem. 15. Onchocerciasis(riverblindness):Infectiontransmittedbythebiteofinfectedblackiescausingsevereitchingandeyelesionsastheadultwormproduceslarvaeandleadingtovisualimpairmentandpermanentblindness. 16. Schistosomiasis:Trematodeinfectionstransmittedwhenlarvalformsreleasedbyfreshwatersnailspenetratehumanskinduringcontactwithinfestedwater. 17. Soil-transmittedhelminthiases:Nematodeinfectionstransmittedthroughsoilcontaminatedbyhumanfecescausinganemia,vitaminAdeciency,stuntedgrowth,malnutrition,intestinalobstructionandimpaireddevelopment. 93

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REFERENCES Abbott,FrederickM.\TheDohaDeclarationontheTRIPSAgreemntandPublicHealth:LightingadarkcornerattheWTO."JournalofInternationalEconomicLaw5(2002). Acemoglu,DaronandRobinson,James.WhyNationsFail:TheOriginsofPower,Prosperity,andPoverty.CrownBusiness,2012. Ahmand,Akram.\Drugpricingpoliciesinoneofthelargestdrugmanufacturingnationsintheworld:Areaordabilityandaccessacauseforconcern?"JournalofResearchinPharmacyPractice4(2014). Aponte,J.J.\SafetyofRTS/S,/AS02DcandidatemalariavaccineininfantslivinginahighlyepidemicareofMozambique:adoubleblindrandomizedcontrolledphasetrial."Lancet270(2007):1543{1551. Bale,H.E.\UruguayRoundNegotiationsonIntellectualProperty:AStepForward?"3rdAnnualConferenceonInternationalTrade(1991). Becker,Gary.\Healthashumancapital:synthesisandextensions."GlobalHealth,DivisionofParasiticDiseasesandMalaria59(2011):379{410. Bourzac,Katherine.\Infectiousdisease:Beatingthebigthree."Nature507(2014).7490. Chambouleyron,A.\Lanuevaleydepatentsysuefectosobrelospreciosdelosmedicamentos:Analisisypropuestas."Estudios18(1995).75. Clemens,RadeletStevenBhavaniRikhiR.,MichaelA.andBazzi,Samuel.\CountingChickenswhentheyHatch:TimingandtheEectsofAidonGrowth."TheEconomicJournal122(2012).561:590{617. Dammert,GaldoJose,AnaandGaldo,Virgilio.\Preventingdenguethroughmobilephones:EvidencefromaeldexperimentinPeru."JournalofHealthEconomics35(2014):147{161. DepartmentofHealthStatisticsandInformatics.\TheGlobalBurdenofDisease,Updated2004."(2008). Easterly,William.CanForeignAidBuyGrowth?,vol.17.2003. GlobalGenes.\RAREList."R.A.R.E.Project(2016). Gottschalk,PandKarlsen,J.\FactorsAectingKnowledgeTransferinITProjects."EngineeringManagementJournal16(2004).1. Hoen,Ellen.\TRIPS,PharmaceuticalPatentsandAccesstoEssentialMedicines:Seattle."PrincetonUniversityPress(2004). Hotez,PeterJ.\Bluemarblehealthandthebigthreediseases:HIV/AIDS,tuberculosis,andmalaria."MicrobesandInfection17(2015).8:539{541. 94

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Imam,Ali.\Howpatentprotectionhelpsdevelopingcountries."AIPLAQuarterly33(2005).4:377{395. InternationalMonetaryFund.\WorldEconomicOutlook."(2015). KaiserFamilyFoundation.\TheU.S.GovernmentGlobalEmergingInfectiousDiseasePreparednessandResponse."(2014). Kremer,Michael.\PharmaceuticalsandtheDevelopingWorld."TheJournalofEconomicPerspectives16(2002).4:67{90. Lanjouw,JeanandCockburn,Iain.\NewPillsforPoorPeople?EmpiricalEvidenceafterGATT."WorldDevelopment29(2001).2. Lehman,Bruce.\ThePharmaceuticalIndustryandthePatentSystem."InternationalIntellectualPropertyInstitute(2003). Maskus,Keith.\TheRoleofIntellectualPropertyRightsinEncouragingForeignDirectInvestmetnandTechologyTransfer."DukeJournalofComparativeandInternationalLaw9(1998):108{161. Mirza,Zafar.\WTO/TRIPS,PharmaceuticalsandHealth:Impactsandstrategies."Develop-ment42(1999).4:92{97. Mistry,N.\ImpactingNTDsandtheBigThree."GlobalNetwork(2011):427{452. NationalPharmaceuticalPricingAuthority.\NationalEssentialLostofIndia."(2014). Oh,Cecilia.\JointPaper:SpecialDiscussionoftheTRIPSCouncilonTRIPSandPublicHealth."(2002). Otten,A.\TheImplicationsoftheTRIPsAgreementfortheProtectionofPharmaceuticalInventions."WHODrugInformation11(1997).1. Pedrique,Strub-WourgaftN.SomeC.OlliaroP.TrouillerP.FordN.PcoulB.,B.andBradol,J.H.\Thedrugandvaccinelandscapeforneglecteddiseases(2000-11):asystematicassessment."TheLancetGlobalHealth1(2013).6:371{379. Roy,Aetal.\EectofBCGvaccinationagainstMycobacteriumtuberculosisinfectioninchildren:systematicreviewandmeta-analysis."BMJPublishing349(2014):643{665. Subramaniam,A.\PuttingsomeNumbersontheTRIPsPharmaceuticalDebate."Interna-tionalJournalofTechnology10(1995).1. UnitedNations.\UniversalDeclarationofHumanRights."(1948). |||.\LocalProductionofPharmaceuticalsandRelatedTechnologyTransferinDevelopingCountries:AseriesofcasestudiesbytheUNCTADSecretariat."(2011). U.S.\RareDiseaseActof2002,PublicLaw107-280."(2002). 95

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Weissman,Robert.\ALong,StrangeTRIPS:ThePharmaceuticalIndustryDrivetoHarmonizeGlobalIntellectualPropertyRules,andheRemainingWTOLegalAlternativesAvailabletoThirdWorldCountries."UniversityofPennsylvaniaJournalofInternationalEconomicLaw17(1996).4. WorldHealthOrganization.\WorldHealthReport:Makingadierence."(1999). |||.\ConstitutionSupplement."(2006). |||.\FactSheet2015."(2015). WorldTradeOrganization.\AgreementonTrade-RelatedAspectsifIntellectualPropertyRights,Annex1C."(1995a). |||.\AgreementonTrade-RelatedAspectsifIntellectualPropertyRights,Article31."(1995b). |||.\FactSheet."(2006). 96

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BIOGRAPHICALSKETCHJevayGroomswasborninLosAngeles,California.SheobtainedherBachelorofScienceineconomicsandpoliticalsciencefromLoyolaMarymountUniversityofLosAngelesin2006.PriortoattendingtheUniversityofFloridashewasinthejobforceforseveralyearsworkingasananalyst.ShebeganherstudiesattheUniversityofFloridain2011andobtainedherMasterofArtsineconomicsfromtherein2014.WhileattheUniversityofFlordiashewasawardedaMcKnightFellowshipandanAmericanEconomicsAssociationSummerProgramTeachingFellowshipatMichiganStateUniversitywhereshewasafellowforProfessorJeWooldridge.SheisalsoafellowoftheAmericanEconomicAssociation'sPipelineProgram.DuringthefthyearofherstudiesattheUniversityofFloridasheservedasaVisitingInstructoratPomonaCollegeinClaremont,California.JevayGrooms'researchliesinvariousintersectionsofHealthandPublicEconomics.Herresearchcoverstopicswhichinvestigatepolicyandinitiativeswhichimpactthepublichealthofdisadvantagedpopulations,bothdomesticandinternational.Herworkshavebeenpresentedatthe94thand95thSouthernEconomicsAssociation'sAnnualConferenceinAtlanta,GAin2014andinNewOrleans,LAin2015,theWesternEconomicAssociationinHonolulu,HIin2015andtheConfabSeriesatPomonaCollegeinClaremont,CAin2015.JevaywasalsoinvitedtospeakatTheImpactofPovertyonHealthbytheHeritageCollegeofOsteopathicMedicineatOhioUniversity. 97