At last, the message is getting through to politicians and policy-makers that an inflexible system of Intellectual Property Rights (IPRs) can have a detrimental effect on public health systems. In its current form, the IPR model has produced some unwelcome consequences for access to essential medicines for the patients who need them most.

Two parallel trends have recently emerged on the regional and international stages that signify a welcome response to the issue of competition and intellectual property(IP) in the pharmaceutical industry. The International Working Group on Public health, Innovation and Intellectual property (IGWG) in Geneva and Directorate General for Competition at the European Commission have been inquiring about certain aspects of the IP system. Even more promising is the public health perspective taken by both forums, bringing patient and consumer issues to the fore.

A Welcome International Development

At the international level, the World Health Organisation’s (WHO) Member States now recognise that market-driven research and development (R&D) must be supplemented with additional incentives for needs-driven R&D, as well as initiatives to ensure that these advances are affordable and accessible to developing countries. The IGWG has brought together country delegations for over two years to institutionalise these concepts in a global strategy and plan of action for bridging the R&D gap and increasing access to essential medicines in developing countries.

The final global strategy and plan of action, adopted by the World Health Assembly (WHA) in May, devotes considerable attention to IPRs and their impact on public health. It singles out worrying practices of over-reaching IPR protection clauses negotiated in bilateral Free Trade Agreements (FTAs), which circumvent the more flexible standards detailed in the WTO Agreement on Trade-Relates Aspects of IPRs (TRIPS). The stricter provisions in these FTAs allow monopolies to be maintained for even longer, thus, locking cheaper generics out of the market and keeping prices high, which inevitably puts a strain on the cost of administering public health.

IGWG’s global strategy also promoted developing countries’ right to use TRIPS flexibilities, which were negotiated at Doha for the very purpose of supporting and protecting public health needs. Compulsory licensing is one instrument that would enable developing countries to buy cheaper generics for public health emergencies, but pressure from companies and trading partners has made this option problematic.

The IGWG looked for ways to reorientate R&D priorities, under which alternative financing mechanisms to put the current IP system. The IGWG process was a struggle, but despite strategic negotiating by the United States, a meaningful resolution was finally passed by the WHA.

European Scrutiny

At the European regional level, the investigations into competition in the pharmaceutical industry, initiated by Commissioner Nelie Kroes of DG Competition, are equally encouraging. The investigations into the blocking of generics manufacturers, getting cheaper medicines onto the markets quickly, by pharmaceutical companies could have implications far beyond both those companies under scrutiny and the EU. Companies are alleged to have extended patent protection through unfair means. These means include the marketing of existing molecules, a practice known as ever-greening, and vexatious litigation. The inquiry also looks into whether drug companies’ efforts to block competitors by extending patents were also distracting them from developing new medicines, which have been slow to appear on the market in recent years.

A recent report by the European Generics Association (EGA) agrees that the current system of IPRs in the health industry stifles competition and innovation. The current incentives actually encourage monopolies, condoning practices such as, second use, ever-greening and other inappropriate follow-on patenting. This IPR model, rather perversely, diverts resources away from investment in innovation, which would ultimately benefit public health.

Same system, similar problems.

The additional burden on public health systems, patients- and consumer-spending brought about by the prolonging of patents, has become a pressing issue at both European and international level. The discussion about the European pharmaceutical market mirrors debates in the IGWG and those put forward during the WHA in May this year. Both address the problem of monopolies, the blocking of competition, and the abuse of the patent system to secure big profits. But the most perverse effect would be the stifling of innovation and the development of new medicines with therapeutic value. As the EGA noted in their recent report, without competition from generic medicines, there is little incentive for innovation, cost containment, and increasing patient access to healthcare treatments.

Though the WHA resolution represents a global strategy while the DG Competition enquiries focus on the internal European pharmaceutical market, both are tackling the same problems; high prices and lack of innovation. Whether we are talking about the regional or the global, the truth is plain; the current incentive system for companies is deeply flawed.

Last modified on July 24 2008.