In the publication “TRIPS and The Global Pharmaceutical Market”, Barton describes the effects of the Trade-Related Aspects of Intellectual Property Rights agreement on the global community. Access to medicines presents a conflict between the interests of social justice and the pharmaceutical industry’s interest in economic prosperity. By the end of this article, I was disappointed but not surprised to reach the conclusion that TRIPS protects private profit without as much consideration for the health needs of disadvantaged populations.
The patent system’s purpose is to permit an elevated price to fund research and development (R&D). TRIPS was put into place to extend patent protection. It required all World Trade Organizations to follow well-defined guidelines of intellectual property protection. The developed world readily accepted the agreement. The royalty costs to the developing countries would be greater, but in exchange, concessions were to be made that would expand the developing countries’ exports. In the late 1990s, NGOs became concerned about the detrimental effect TRIPS might have on developing countries. Patent law led to increased prices for pharmaceuticals, especially the prices of antiretrovirals used against HIV.
Dissent from individual countries led to compromise on pricing of drugs. Brazil could not keep up with the rising prices of imported medicines and threatened to grant compulsory licensing to allow production of medications under patent within the country. In 2001, differential pricing for poor countries and rich countries was introduced to appease developing countries. As it turns out, lower pricing does not improve access to medicine for patients suffering from HIV/AIDS in developing countries. The total amount of global health funds available are not sufficient to provide drugs for all the epidemic diseases, even when the drugs are available at low prices.
Disadvantaged populations do not reap the benefits of innovation. There is a lack of incentive for the drug industry to develop new drugs for the developing world’s market because this market has a limited magnitude. Simply put, there is no money to be made in the markets of poorer countries, so why incur costs of R&D for little returns?
The global patent law agreements have had the most impact on developing countries, but the United States should anticipate some impact as well. Developed countries such as the U.S. must prevent the low-priced products from being imported to the developed world. These imports would cut into this patent-protected market. To protect the developed market, the pharmaceutical industry has created ways of distinguishing low-cost drugs intended for developing countries by packaging and color.
This article raised an interesting point. How will Americans react when they discover that a drug is available to others at a far lower price? Yes, the people receiving the medicines at a discount are much less fortunate than we are, but the humanitarian angle is not a sufficient excuse for the price difference. The government and pharmaceutical companies will face political backlash. I do not think that the U.S. is currently capable of subsidizing pharmaceuticals to please the public. The coverage of pharmaceuticals would be difficult to include in the Affordable Care Act. Alternatively, the U.S. can move toward public control of the drug prices and negotiated prices.
The article was written to discuss a global issue, throughly presenting each stakeholder’s vantage point. I had not been aware of the politics of patent laws as it pertains to the drug industry; the article did a great job of summarizing the issues and the history.