Newsweek has an article this week about Thailand's decision to issue compulsory licenses for a number of important drugs. By eliminating patent monopolies on several AIDS drugs, as well as a few other medications, Thailand was able to reduce prices by close to two-thirds. Naturally, the drug industry is furious over the possibility that their patent monopolies may not be protected. Newsweek apparently shares the drug industry's anger, telling readers that "advocates of free trade see Thailand's move as a big threat." Actually, any real advocate of free trade, almost by definition, would have to applaud Thailand's action. After all, the Thai government is eliminating a government imposed monopoly and allowing drugs to sell at prices that are much closer to their free market level. There are arguments for patent protection, patent protection is obviously one possible mechanism for supporting pharmaceutical research, although probably not a very efficient one. But patent protection is a form of protectionism. It is not free trade.
--Dean Baker
