European Union Trade Commissioner Peter Mandelson has warned the Thai government against moves that would force drugmakers to drop their prices on expensive medication, the Financial Times reported on Friday.
In a letter seen by the business daily, Mandelson wrote that Thailand "may be taking a new approach to medicines," adding that the country's military government "stated that if drug companies wish to do business in Thailand, they should offer their drugs for no more than five percent above the generic cost."
"This approach is a matter of concern for the European Union and would be detrimental to the patent system, and so to innovation and the development of new medicines."
Thailand has clashed with Western governments in the past over threats to extend the use of compulsory licenses, which are allowed under World Trade Organisation (WTO) rules so that countries can temporarily suspend patent protections on medicines that safeguard public health.
Mandelson also reportedly wrote that Thailand's moves would be in breach of WTO regulations, and encouraged Bangkok to negotiate with drugmakers.
According to the FT, Thailand has yet to reply to the letter, which was written in July.