How TRIPS Agreement Shapes Global Access to Generic Medicines

Before the TRIPS agreement, many developing countries could make cheap generic versions of life-saving drugs without breaking the law. In places like India and Brazil, local manufacturers reverse-engineered patented medicines using different production methods. A heart drug that cost $1,000 in the U.S. might sell for $50 in India. That changed in 1995, when the TRIPS agreement became law for all 164 members of the World Trade Organization. Suddenly, countries had to enforce 20-year product patents on pharmaceuticals-even if it meant people couldn’t afford their own medicines.

What the TRIPS Agreement Actually Does

The TRIPS agreement, part of the WTO’s founding rules, forces every member country to give drug companies at least 20 years of exclusive rights from the date they file a patent. That means no one else can legally make or sell the same drug during that time, even if it’s just a copy. Before TRIPS, only 23 of 102 developing countries protected drug products with patents. By 2010, that number jumped to 147. The shift wasn’t just legal-it was economic. A 2001 study in the Journal of the American Medical Association found that patented drug prices rose by more than 200% in developing countries after TRIPS kicked in.

The agreement also banned process patents from being used as loopholes. Before TRIPS, a company in India could make the same drug using a different chemical process and still call it a generic. After TRIPS, that became illegal. The only way to legally produce a generic was to wait until the patent expired-or get special permission.

Compulsory Licensing: The Legal Escape Hatch

TRIPS wasn’t completely rigid. Article 31 lets governments issue compulsory licenses-allowing local manufacturers to produce a patented drug without the company’s permission. But there’s a catch. Paragraph (f) says these licenses must be used mostly for the country’s own market. So if you’re a small African nation with no drug factories, you can’t import cheaper generics made in India, even if you have a legal license.

This rule crippled public health efforts. In the early 2000s, countries like South Africa and Thailand tried to use compulsory licensing to fight HIV/AIDS. South Africa faced a lawsuit from 40 drug companies. Thailand was pressured by the U.S. government to back down. Only a handful of countries ever managed to use this tool effectively.

In 2003, the WTO tried to fix this with the “Paragraph 6 Solution.” It allowed countries without manufacturing capacity to import generics made under compulsory license from another country. But the process was so complicated-requiring multiple government approvals, paperwork, and legal safeguards-that by 2016, only one shipment of malaria medicine had ever been sent this way.

Data Exclusivity: The Hidden Patent Extension

Even after a patent expires, generic drugs often can’t enter the market right away. That’s because of data exclusivity, a rule not even required by TRIPS but pushed by rich countries through trade deals. It means regulatory agencies can’t use the original drug maker’s clinical trial data to approve a generic version. So even if the patent is gone, generics must wait 5 to 10 years before regulators can even review them.

This is called “TRIPS Plus”-stricter rules added on top of what TRIPS requires. The EU-Vietnam Free Trade Agreement, signed in 2020, gives 8 years of data exclusivity. The U.S. includes similar clauses in nearly all its bilateral trade deals. In low-income countries, 65% report delays in generic approval because of these extra rules.

The result? A drug that should be cheap after 20 years can stay expensive for 25, 30, even 35 years. That’s not innovation-it’s legal delay.

India’s Pivot: From Generic Hub to Patent Compliance

India was the world’s pharmacy. Before 2005, it didn’t grant product patents on drugs. That meant companies like Cipla and Natco could make affordable HIV, cancer, and hepatitis C medicines for the entire developing world. In 2005, India had to change its laws to meet TRIPS. The result? A 300-500% price jump for some cancer drugs, according to a 2008 Lancet Oncology study.

But India didn’t give up. It kept strict patent standards. Only new chemical entities got patents-not minor modifications. That’s why, in 2012, India granted a compulsory license for a kidney cancer drug, allowing Natco to make a generic version. The drugmaker, Bayer, sued. But India’s patent office stood by its decision. The price dropped from $5,500 per month to $175. Patients across Africa and Latin America started getting the drug.

India still makes 60% of all generic medicines used in the developing world. But its ability to do that is shrinking under pressure from trade deals and patent lawsuits.

Real-World Impact: Who Pays the Price?

The human cost is real. In 2000, it cost $10,000 a year to treat HIV with branded drugs. By 2019, thanks to generic competition in countries that could bypass patent barriers, that cost dropped to $75. But that’s only true where governments acted. In countries that followed TRIPS strictly without flexibilities, treatment remained unaffordable.

For newer drugs-like those for hepatitis C or rare cancers-the story is worse. The Access to Medicine Foundation found that 80% of medicines in low-income countries are off-patent, but still out of reach because of poor supply chains, weak regulation, or hidden patent traps.

The Global Fund, UNAIDS, and Médecins Sans Frontières have all documented how patent rules delay access. One mother in Malawi couldn’t get her child the hepatitis C drug because it was still under patent. The generic version existed-but couldn’t be imported legally. She had to wait three years.

TRIPS Waiver and the Pandemic Wake-Up Call

The COVID-19 pandemic forced the world to confront the flaws in the system. In October 2020, India and South Africa proposed a temporary waiver of TRIPS protections for vaccines, tests, and treatments. Over 100 countries supported it. The U.S., EU, and Switzerland blocked it for over a year.

In June 2022, the WTO agreed to a limited waiver-only for vaccines, not treatments or diagnostics, and only for a few years. It was a symbolic win, but the process took 20 months. By then, millions had died. The waiver didn’t change the rules-it just gave countries a temporary excuse to ignore them.

Meanwhile, pharmaceutical companies kept making record profits. Moderna and Pfizer earned over $100 billion combined from COVID vaccines. Yet they refused to share their formulas or license production to generic makers in Africa or Latin America.

The Future: Will TRIPS Survive?

The Medicines Patent Pool, created in 2010, has negotiated voluntary licenses for 26 medicines, reaching over 17 million people. It’s a good model-but it relies on companies’ goodwill. It doesn’t change the system.

Experts like Dr. Ellen ‘t Hoen and Professor Brook Baker argue that TRIPS was never meant to serve public health. It was designed to protect corporate profits. The Doha Declaration in 2001 said public health matters more than patents. But without enforcement power, it’s just words.

Countries like Brazil, Thailand, and South Africa have shown it’s possible to fight back. But they’ve paid a heavy price-trade threats, diplomatic isolation, and legal battles.

The next big test will come with new medicines for tuberculosis, malaria, and antimicrobial resistance. If TRIPS stays unchanged, those drugs will be priced beyond reach for billions. If the world finally reforms it, millions could live.

For now, the system still works for shareholders. It doesn’t work for patients.