Latin America has made great strides in protecting pharmaceutical patents still held by the intellectual property holders. Through free trade agreements such as NAFTA as well as some decisions made by South American governments, particularly Brazil, pharmaceutical patent protection is increasing and the pharmaceutical industry is growing and innovating. These steps by Latin American governments highlight a larger piece of the pharmaceutical patents debate which is ensuring an economic incentive for development of new intellectual property. Modern drugs are getting more expensive to produce and pharmaceutical patents still need to be honored and protected.
Pharmaceutical Patents Gaining Respect in Latin America
When Mexico and the United States signed NAFTA, the groundwork was laid for the now booming Mexican pharmaceutical market. Mexico is the largest market in the South America and the increased protection of pharmaceutical patents has lead to research companies such as Schering-Plough to increase their involvement in the Mexican pharmaceutical industry. Furthermore, direct investment has increased overall into the Mexican pharmaceutical space.
Increased foreign direct investment and balanced, fair Free Trade Agreements are two key aspects of healthy pharmaceutical patent protection. However, they do not answer the question "Why are pharmaceutical patents important?" The answer to that question is that pharmaceutical patents protect pharmaceutical innovation.
Pharmaceutical Patents Still In Effect Foster Development of New, More Effective Pharmaceuticals
The economic incentives found in drug patent protection can ensure that more money is funneled into research and development to make new, more effective medications. This idea isn't held just by pharmaceutical companies. In just about every industry the amount of money funneled into R & D is dependent on the expected success of the new intellectual property. Without pharmaceutical patents still in place, drugs do not have the protection they need to succeed in the market. If the drugs cannot succeed, then new ones cannot be developed. According to a study by the NCPA, a ten percent decrease in market value directly lead to a 2.25% decrease in spending for research and development.
The NCPA also presents the compelling argument that pharmaceutical patents are also directly responsible for an increase in affordable generic medications. Innovation and R & D is fueled by success in the market. If imitators (generic drug manufacturers) ignore patent protection, then they decrease the drugs chances on the market. If pharmaceutical patent holders cannot be reimbursed for their costs of development, then they are not going to develop new drugs. Without new drugs, the generic manufacturers will not have new products to create once the pharmaceutical patents expire.