It’s Time for You To Take Responsibility

Access to pharmaceuticals is a hotly debated topic centering on intellectual property rights.  Many third world countries have raised the issue of whether it is ethical to deny a person medical treatment or medical information based on the ability of the person to pay.  This issue represents the dichotomy between the advanced world and the developing world.  The developing world has a huge need for drugs, but a relatively low demand at current price levels.  The drugs needed, contrary to popular belief, are not only anti-retrovirals or drugs and antibiotics for tropical diseases, but also cholesterol controlling drugs, which have a huge market base in the developed world.  The developing world market, however, is blocked by strict patents that give pharmaceutical companies a monopoly over the information of new technology and the lack of sufficient health systems in developing countries.   This is mainly an issue of international trade, but there are other obstacles to drug access than intellectual property right protection.

Most of the research and development of new drugs, and that of old drugs for that matter, has taken place in the developed world.  The costs of the research, the testing for safety and quality standards, and clinical trials are extremely high.  Pharmaceutical companies are allowed to maintain an effective monopoly over new drugs and can therefore charge higher than the costs of production for these drugs in order to fund future research and development.   Pharmaceutical companies do have a legitimate fear for abandoning intellectual property right protection.  In an increasingly globalized market, parallel selling is a reality.  This occurs when a nation infringes on a copyright and makes a commodity for a relatively cheap price and then sells that good on the international market.  Intellectual property patents were created as an international standard to protect firms and promote innovation within any industry.  When applying this regulatory institution to the specific case of pharmaceuticals, the patents seem unethical.  There is no need to change the entire rules of the game for this one exception.    The TRIPS agreement has, however, fostered international negotiations on a country by country basis to ensure that US firms will be protected from parallel selling and countries will obtain need drugs at lower costs.  Pharmaceutical companies  cannot in and of themselves bare the entire cost of providing drugs, basically for free, to everyone in need.

In order to improve access in the developing world national health systems must be strengthened to meet the pharmaceutical companies half-way.  This would include some sort of insurance plan.  Most of the expenditures on drugs in developing countries are incurred out-of-pocket.  This is the reason why the market for drugs in the developing world is so small.  People just can t afford the out-of-pocket expenditures.  Emphasis should also be placed on the governments of the developing world to subsidize much needed pharmaceuticals.  US pharmaceutical companies will offer a drug in a market only if there is enough incentive, as any rational firm would do.  Governments can develop plans to purchase drug from the US at a relatively high cost and then resell the drug to their national much cheaper.  This would provide some incentive for private investors in the developing world to invest in drug specifically for developing countries.  I believe it is up to the government of the health system of the trading nation to provide for the severely indigent.  This would also require improved infrastructure, such as roads and low-cost transportation systems.  Also regulations on drugs and supply chain management are requisite.  The responsibility for providing access to pharmaceuticals should be split, in a fair manner, between the companies and governments of the developed world and the governments of the developing world.

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