In 2015, the United Nations Secretary-General Ban Ki-moon convened a High-Level Panel on Access to Medicines. Its charge was to recommend solutions to the fallaciously described “policy incoherence between the justifiable rights of inventors, international human rights law, trade rules and public health in the context of health technologies.” Unfortunately, their starting point was misguided, and – not surprisingly – the resulting report is dangerous nonsense.
Like a wolf in sheep’s clothing, the U.N. Panel’s report is fundamentally an attack on intellectual-property laws, disguised as an endeavor to improve access to medicines in the developing world. While improving access to medicine is an undeniably laudable goal and thus not surprisingly included in the Millennium Development Goals (MDGs), the Panel’s recommendations are more likely to inhibit, not extend, global access to critical medicines.
In 2015, the U.S. Food and Drug Administration (FDA) approved 45 new drugs, a figure that is especially striking because it is the highest annual number in two decades (Philipson, 2016). The incentives to innovate, provided by intellectual property rights, are working. Moreover, and perhaps more importantly for this debate, these incentives are working for innovation in the developing world as well.
As noted in a report by the World Intellectual Property Organization (WIPO), “many follow-on and patented innovations might contribute in a positive way to the improvement of public health and also to economic development, and that some forms of adaptive innovation may be especially relevant to meeting neglected health needs.”
Consider the following incremental innovations with specific importance to the developing world.
- AIDS: Efavirenz/emtricitabine/tenofovir DF, was the first-ever single-pill AIDS treatment regimen combining three drugs into one pill, simplifying the dosing regimen and increasing patient compliance (Cohen & Kaitin, 2008).
- Chagas Disease: Clinical trials are underway to explore the effects of the anti-fungal medicine ravuconazole against the pathogen that causes Chagas disease, a neglected tropical disease affecting nearly 10 million people (IFPMA, 2013).
- Malaria: Improvement innovation led to the development of a new formulation of two anti-malarial drugs, artesunate and amodiaquine, reducing dosing regimens from eight tablets a day to two (IFPMA, 2013).
Beyond the fact that patents are incentivizing innovation to improve health in the developing world, it is important to also recognize that patents are not the barrier to access that they have been depicted to be. Notably, almost all of the 375 drugs on the World Health Organization’s (WHO) Essential Drug List are off-patent. In addition, the majority of the 5 percent of drugs that remain on-patent are for HIV/AIDS treatments for which the patent owners either do not register or do not enforce their patents in the poorest countries.
Further evidence is found in the actual cost of off-patent drugs in developing countries. Notably, on average, off-patent drugs cost a mere six percent of what they do in the U.S. Additional confirmation may be found in a study by Kyle and Qian (2014) that considers the WTO TRIPS Agreement, intellectual property rights (IPRs) and access to pharmaceutical innovation. Specifically :
“Finally, IPRs have a very large bearing on product launch. Thus, while the potential for patents to limit access is often emphasized in policy discussions, it appears that IPRs – by creating increased incentives for marketing efforts by originators – may increase the availability of new treatments to populations in developing countries. . . On average, access to new pharmaceuticals has at least not decreased following TRIPS. While patents are also associated with higher prices, there is some evidence that prices in poorer countries have fallen, though not to the level of off-patent products.”
From an R&D perspective, the ‘diseases of poverty’ remain a problem largely because of the absence of market incentives, not the presence of patents. Notably, in a study of ARV drugs in Africa, Attaran and Gillespie-White (2001) find that even where intellectual property protection is available, many firms elect not to patent their drugs.
The High-Level Panel has squandered a unique opportunity to contribute to this process and the careful consideration of what mechanisms will truly encourage innovation and simultaneously enhance access is a critical next step. Not only did the Panel fail to move us toward these goals, they have almost certainly moved us backward.
Dr Kristina Lybecker is Associate Professor of Economics at Colorado College in Colorado Springs where she is also the Associate Chair of the Department of Economics and Business. Dr Lybecker is an economist with a PhD from the University of California at Berkeley. She specialises in innovation and intellectual property rights and has been writing on these issues for several years. She has also worked with the US Food and Drug Administration, PhRMA, and the World Bank, on a variety of issues relating to the economics of innovation and international trade policies.