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Pharmaceuticals and the patent system

Published by under Articles,Bio-Sciences,Politics / Management categories on June 10, 2011

Scientist in laboratory dressing, watching a new material in his hand. Few issues have caused so much discussion in the last decade as the patent system applied to pharmaceuticals. Very recently the TRIPS agreement has been enforced in developing countries with consequences yet to be fully aprehensible. By Joaquim Duarte.

What is the Trips Agreement, then? It is a part of the World Trade Organization’s Marrakesh Agreement signed in April 1994, establishing this global Institution and the acronym stands for Trade Related Aspects of Intellectual Property Rights. In short, this agreement obliges countries to respect international patents preventing them from marketing patented drugs or pharmaceutical active formulae registered in any of the WTO signatary countries through independent companies or research. The argument for this system comes from the arguable need to fund research and provide incentive to further pharmaceutical development. On the other hand it is discussed whether the global monopolies won’t end up investing rather more efforts on researching cures for problems arising on developed countries instead of providing efficient solutions for diseases of poor folk.

The latter problem stems from the period of exclusivity awarded to medical and pharmaceutical brands for marketing their products, which is of 20 years. This does not stimulate continuous research for drugs that cannot be sold at very high prices, thus making them more rentable in the long run and specially when governments find themselves obliged to pay whatever prices the private industries deem fair, in, for instance, dealing with pandemiae. So active principles patented will hardly be surpassed by further studies unless they are public funded or a rival company steps in to make some profit. The problem here is that monopolist companies have a tendency to stay out of each other’s way so as not to undertake unnecessary risks. Evermore so when States are willing to pay huge amounts of money in compensating them instead of trying to devise different methods of optimising pharmaceutical research and its applicability on a global scale, free of royalties and large time frames.

Some countries are now trying to encourage generics as a parallel to original drugs and a means to making the pharmaceutical principles available to a broader spectre of the population at lower prices. However that cannot be applied to everything and at any conditions wherefrom generics have, in turn, become a part of the problem rather than the perfect solution, although some credit is in order when we think of how much worse it would be without them. Consider this when thinking of the 20 year exclusivity for patented drugs: If a big corporation holds the exclusive marketing and branding rights for a pharmaceutical formula why would it release a better one before this period of time elapses? Isn’t it quite more profitable to let time run until the end of the patent rights no longer protect the formula?

If you are running a pharmaceutical that thrives on profit will it not be self-clear that putting forward more advanced drugs will kill the earlier versions on the market? So this presents the palpable risk that effective research will be delayed for generations, moreover when research costs money and divulging and distributing will also consume some fundings. This is where public research comes in, sometimes associated with private interests, and on other occasions dependant on the pressures and lobbying of large companies to be au courant with these investigations and findings, so remaining one step ahead and even enticing scientists to join them in exchange for higher salaries and, often, better technical conditions and unrestrained funding.

Universities and hospitals, clinics and public institutes are evermore increasingly joining efforts with the private sector without the due return when breakthrough is achieved. Countries are alienating their importance in researching and the consequences it has in public health matters, as well in confronting the liberalised markets, something that the modern State is unable or unwilling to do. Poorer countries spend billions on drugs that wouldn’t be developed if corporations were to rely on third world countries’ consumers. In the end these consumers will pay the price anyway, through taxes and the progressive impoverishment of already poor people.

A new paradigm must be met to counter this perversion of the profit-based-system. The right to private research and marketing as well as a mitigated form of patents is readily accepted, but public fundings must have public returns. If a country spends millions in researching, it must benefit the public, that is, all the tax payers that saw their contributions go into medical science, not private pharmaceutical companies, and the result must be made available to underdeveloped countries under International Cooperation Agreements regarding health and education, the main pillars of progress and development.

One might argument that then many jobs could be lost in the private sector or that some research would suffer even worse delays or indefinite postponing because researching would be less rentable in certain areas of medicine. This is precisely why a period of exclusiveness must still be granted to investigators. A period of 5 years renewable for further 5 if the company has developed an agreed number of pertinent innovative drugs during that same period, along with a public participation in the funding of specific investigations relevant to countries involved. Generic brands would have earlier access to formulae and would then ensure that these drugs were made available at lower prices. Generic brands would lever employment where original brand companies might lose one or two percent in jobs, if that much, because of the shortening of the exclusiveness period. Markets would flow at faster speeds and innovation could have a notable impulse, always at the service of those that need it the most.

Furthermore, parapharmacies can, too, play an important role in the consolidation of public health by also partnering with State-owned and private hospitals, offering their vast resources to patients on location in exchange for a direct market, which is readily available, or accessible, to people with less severe illnesses. These would also contribute to providing employment by extending their network to places previously barred to them. There are huge benefits to be taken from such a reform, from scientific innovation to employment growth and improvement of global health, lowering the percentage of some forms of absentism or reducing its timespan.

Governments must really rethink their positioning towards the private sector and take care of those that make the State: the people. If there is a reason for living in society is that together we are stronger, solidarity and fair cooperation make us grow faster and enhance our confidence in the future as well as in our representatives in public offices. Orthodoxy on the matter of eventual unfairness in economic affairs is blinding many politicians and has made many of them forget the basic principles of building a nation and State – that we all agree to help each other, as opposed to being suspicious (even paranoid at times) of the other or too scrupulous where we should have all but complexes. We all stand to gain from freeing our minds from stereotypes and reempowering our collective construction: The State.

By Joaquim Duarte, writer expert in History and Strategy.




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