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Pharmaceuticals and Health Outcomes

In a discussion on access to medicines, it’s easy to forget the case for intellectual property. We asked Emily Williams to set out the arguments you would hear from industry.

The U.N High Level Panel on Access to Medicines and the Role of Pharmaceuticals in Improving Health Outcomes

United Nations Secretary-General Ban Ki-moon has convened a High-Level Panel on Access to Medicines. The panel is expected to report in June of 2016. At the centre of this discussion is the effect on access is intellectual property protection and the role it plays on the development, manufacturing, and use of pharmaceuticals. Concerns focus both on the provision of intellectual property protection and the timescales for which such protection lasts. Many of these concerns are the focus of a paper authored by Dr. Usman Khan, Stephen Kreutzer, Chris Thomas , Dr. Panos Kanavos and Prof. David Taylor in 2013: “Wealth, Health and International Trade in the 21st Century”

Critics argue that there are circumstances under which intellectual property rights will disadvantage poorer populations in need of effective medicines. However, this is not the purpose of patents and other data-protection provisions. Legislation in countries and regions such as the United States, Japan, Singapore, Australia and the EU, incentivise research into new and rarer indications by extending periods of exclusivity. Yet, contrary to what is claimed, this does not stop generic medicine producers from supplying low-cost versions of off-patent products for their original uses. Indeed, undermining IPR protection for pharmaceuticals is the greater threat to worldwide future public-health interests. For this reason, it is important to consider the modern role of patent and other forms of intellectual property law in the development of new medicines and vaccines for both rich and poor world populations.

A well-working IP regime provides pharmaceutical companies with the secure environment they need to invest in new treatments and cures. Currently, under the WTO’s Trade-Related Aspects of Intellectual Property Rights agreement, patents should be available for a minimum term of 20 years in all member nations. When it comes to pharmaceuticals, trials to confirm safety and efficacy reduce the “on the market” period of protection to half or less than half of this period. A radical shortening of the duration of the patent-protected or other forms of exclusive-supply terms available to innovators relative to the effort and resource investment needed to market new medicines is one of the reasons the unit cost of innovative drugs for cancer and other indications has risen markedly in developed world markets in recent decades. Casual observers may automatically associate the concept of lengthened or otherwise strengthened patent or other exclusive-supply terms for innovative medicines with higher unit prices for innovative treatments. But in reality, this can be a false causality assumption: Other factors, such as levels of competition and the levels of return regulatory and allied bodies regard as permissible, are often sidelined in the debate over medicine prices, despite their crucial role.

Other key facts, which demonstrate why intellectual property rights are important in the context of effective new medicines development, include:

  • Research-based pharmaceutical manufacturers today spend some 15–20 percent of their gross turnovers on research and development. Although they are the result of highly advanced research and extensive safety testing, many new medicines, other than biologic medicines are, once proven and licensed normally, relatively easy to copy.
  • Much of the value of a medicine lies in the knowledge on the basis of which its use has been authorized, rather than the cost of its physical ingredients. Once again, this means that without appropriate intellectual-property law, it would never be viable for private investors to fund pharmaceutical research, because lower-cost copyists would be in a position to undercut the legitimate prices of innovators even while still generating supra-normal profits.

Without a doubt there is a powerful humanitarian case for improving access to essential/effective medicines and vaccines for people around the world. From an evidence-based public-health perspective, poorer communities in areas such as South-eastern Asia are most likely to need better access to high-quality, low-cost generic drugs for relatively common disorders combined with better basic health care and improved vaccination programmes, rather than the latest medicines for later life conditions. On the other hand, in the case of public-health emergencies involving outbreaks of new infections, poor populations may also need mass access to recently developed, still IP-protected, treatments. There is no reason that IP protection should stand in the way of providing either types of access. While some non-governmental lobbying organizations oppose IPR-related provisions that incentivize pharmaceutical innovation it is important to understand the truths surrounding IPR as described above and it’s vital role in allowing pharmaceutical companies to invest in research and development as well as improving global health outcomes.

Emily Williams

Emily Williams is a research assistant at Ward health, Canada. Ward Health works with governments, academia and patient groups around the world in the quest for better health.

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