Patents and innovation

Patents and innovation
Pharmaceutical companies and many governments argue that regardless of their impact on drug prices, patents are necessary for research and development (R&D).  Charging higher prices, so the argument goes, allows them to get a big financial return on their investment, and they can then re-invest in more R&D.  Without patents in other words, there will be no innovation.

This is easily disproved.  Africa accounts for some 1% of the world’s medicine market.  Even if the big pharmaceutical companies ended up making no sales on the continent, their profits – and therefore the money available to them to invest into R&D -  would be only negligibly impacted.  Their ability to generate income to perform more research depends overwhelmingly on sales in wealthy markets.  Yet patents are pursued just as vehemently in developing countries as they are in wealthier nations.

How the patent system keeps neglected diseases neglected
Further, a system where patents and monopoly pricing constitute the incentive to medical innovation causes serious collateral damage: the desperate neglect of the diseases that affect 90% of the world’s population.  

Indeed, patents can stimulate R&D for new medicines only when there is a commercially viable market. But for some diseases which mainly affect the poor, such as tuberculosis, or sleeping sickness, the lack of lucrative rewards means that patents are unable to stimulate innovation: a patent holder will never be able to make a profit by charging high prices, so little R&D is conducted on these diseases. 

Regardless of the intellectual property regime prevailing in developing countries, in reality there is little commercial incentive for the private sector to undertake research of specific relevance to the majority of poor people living in low income countries… So what role does intellectual property protection play in stimulating R&D on diseases prevalent in developing countries? All the evidence we have examined suggests that it hardly plays any role at all, except for those diseases where there is a large market in the developed world (for example, diabetes or heart disease).

Report by the UK government-sponsored Commission on Intellectual Property Rights – 2002

Read more about medical innovation

Twin problems, one solution: tackling innovation and access together
R&D into medicines is expensive, and someone has to pay.  But in today’s world, that person is the patient.  The predominant system for drug development today has two deadly effects, then: high prices on the one hand, and the lack of R&D into diseases of the poor on the other.  

If the world is to come up with a way of developing medicines which makes sure that those who need them can access them, we will therefore need to look at both medical innovation and access to medicines at the same time.

International talks currently underway at the World Health Organization are seeking to do just that.

The Intergovernmental Working Group on Public Health, Innovation and Intellectual Property, or IGWG, was established by member states of the World Health Organization in 2006 to tackle the problems with the current access to medicines and R&D environments.

The working group is groundbreaking as it is the first high-level international body to consider both R&D and access to medicines issues at the same time.   
Read more about the IGWG

Read more:

MSF and patents

Patents and access

What is a patent?

Overcoming patent barriers

TRIPS

Milestones

What needs to happen