1 - Introduction

Summary

In 1990 an American-based private business association used its power not only to reject, but to actively shape, the legislation of a foreign, sovereign government. Up until 1991 Chile, like many developing countries, refused to grant patent protection for pharmaceutical products. This refusal was an effort to keep the prices of necessary medicines affordable by placing public health considerations above property rights concerns. In the late 1980s Chile faced increasing pressure from the US-based Pharmaceutical Manufacturers of America (PMA) to revise its laws to extend patent protection to pharmaceutical products. The PMA sought a law providing for monopoly pricing protection for twenty-five years, potentially placing necessary medicines out of reach for the average Chilean. In 1990 the Chilean government proposed a revised patent law, which the PMA rejected as inadequate. In response, the Chileans went back to the drawing board. Chile finally came up with a law providing patent protection for pharmaceutical products for a fifteen-year period. The PMA declared that it was satisfied. The PMA's role in this matter was intriguing. Where did this power come from? How had this situation come to pass?

The Chilean incident foreshadowed a related and even more dramatic event – the adoption of the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) administered by the World Trade Organization (WTO). TRIPS ushered in a full-blown, enforceable global intellectual property (IP) regime that reaches deep into the domestic regulatory environment of states.