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homework # 2 - Case Analysis Questions Compulsory...

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Case Analysis Questions Compulsory Licensing, Thailand, and Abbott Laboratories Politics and Markets: Innovation and the Global Business Environment Professor Primo Fall 2010 Isabella Tobon 1. Critically evaluate Abbott’s initial response (detailed on p. 604) to Thailand’s decision to issue compulsory licenses. Was this a wise move? Was there a better approach? No, it was not a wise move because: TRIPS Agreement, enforced by the Paris Convention, gave governments the right to grant compulsory licenses on “virtually any ground.” This includes public interest, abuse or anticompetitive conduct, or for noncommercial government use. Therefore, as Abbott tried to protect its industry it was violating a legal international patent law set forth by the World Trade Organization. It should also be pointed out that the licenses are for the non-commercial use of supplying their national health program which validates the Thailand approach even more. In terms of future trading, this was not a wise move since U.S. has a comparative advantage to other nations in pharmaceuticals and medical technology. The Abbott-Thailand controversy represents an obstacle in which pharmaceutical innovation and the Thailand Government Policy become a “collateral damage,” to Intellectual Property; even more this conflict represents a lost opportunity for international trade. There were probably other wiser moves in this case; nevertheless they are very limited given the International Agreements and the possibilities for negotiation. The compulsory licensing in Thailand is useful to replace the lack of regulatory control on the pricing of drugs. The main problem with the compulsory licenses for industries is that the industry has been entirely put aside from the process. Given this isolation, the best approach would be establishing mutual agreements between
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homework # 2 - Case Analysis Questions Compulsory...

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