Pharmaceutical Patents and Economic Ineqality (original) (raw)
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We routinely refer to pharmaceutical patents as intellectual property rights. The argument in this article is that pharmaceutical patents represent a ‘bargain’ between government, business and society. The pharmaceutical patent system constitutes a social institution with social goals that go well beyond solely providing incentives to proprietary pharmaceutical companies to develop innovative drugs. Therefore we need to assess this institution in terms of what is referred to here as its social effectiveness, that is, its ability to accomplish the social goals it was set up to achieve. Such assessment has to take into account the fact that the pharmaceutical patent system has now become global, a development that has made its social ineffectiveness more apparent and worrisome. The severity and gravity of unmet global and local public health needs compels urgent scrutiny of the pharmaceutical patent system, as well as of alternatives to it, such as prizes for pharmaceuticals.
Patents and Other Incentives for Pharmaceutical Innovation
Encyclopedia of Health Economics, 2014
The public sector helps finance the drug discovery enterprise through a variety of mechanisms. These include grants for biomedical research conducted in public sector labs, tax subsidies for private drug plans, and the extension of intellectual property privileges to drug developers. The cost of bringing new drugs to market has increased markedly during the last two decades. This has raised questions about whether existing forms of public sector support is optimal, and, in particular, if alternative forms of public support would result in more therapeutically valuable drugs per dollar spent. This chapter reviews the advantages and deficiencies of existing forms of government support for drug R&D, and the features of the alternative arrangements that their proponents suggest will improve upon the current system. We review both "push" programs-schemes that make private investment in pharmaceutical R&D more profitable by reducing the private cost of the R&D-and "pull" programs-schemes that increase the revenues accruing to companies that manage to bring new drugs to market. We conclude with an assessment of the issues that need to be resolved for these alternative forms of support to be actually implemented.
Influence of Patent Law on Price of Medicines
Patent Law and Intellectual Property in the Medical Field
There is a great deal of disparity between the availability and affordability of medicines in least developed, developing and developed nations. Patents are one of the major reasons of this difference. The pharmaceutical industry spends over US$10 billion to fund some 90% of 40,000-80,000 randomised controlled trails being conducted across the world at any given time. A United Nations AIDS study reported that the number of people in poor countries who have access to anti-retroviral medicines remains extremely low; only 30,000 received medication in 2002, out of an estimated 5 million in need. The proposed chapter aims to study effect of patent law on pricing of medicines. The legal and regulatory policies such as TRIPs jointly introduced by various nations to regulate the pricing of patented products will be elaborated in this chapter. Apart from national and international policies, the behaviour of pharmaceutical companies also affect price of patented products. The chapter will also cover various techniques pharmaceutical industry adopt to control price of patented products such as proliferation of me-too drugs, product reformulation, prolonging patent rights, biasing research and large promotional expenditures.
The economics of patents: from natural rights to policy instruments
2013
This paper uses latest advances in economic research for examining recent changes in patent regimes aimed at strengthening patent protection, and beyond that, for rethinking the rationale of the patent system. Considering that economic theory does not regard patents as a natural right that should be systematically granted to inventors, but as a policy instrument aimed at fostering innovation and diffusion, three major implications can be drawn from economic theory regarding current policy debates. First, patents may not be the most effective means of protection for inventors to recover R&D investments when imitation is costly and first mover advantages are important. Moreover, they may do more bad than good to innovation if innovation is cumulative and first generation inventions are essential to develop further inventions, especially when patent protection is strong. Patents should not be seen as the solution by default, notably as regards new areas of patentability such as software, business methods and genetic inventions. Second, patentability requirements, such as novelty or non-obviousness, should be sufficiently stringent to avoid the grant of patents for inventions with low social value that increase the social cost of the patent system. Third, rather than the statutory patent life, what matters is the effective life of patents: the broader is a patent the longer is its effective life. Policy instruments affecting patent breadth (e.g. extra fee for independent claims above a certain threshold) and length (e.g. renewal fees) could be used to provide long effective lives to inventions with high social value. Beyond these currently debated issues, economic theory pleads for an in-depth reshuffling of the patent system. If the system were to be radically changed, an optimal patent policy could be based on a multidimensional menu of different degrees of patent protection associated to different patent fees, where stronger protection would correspond to higher fees. Patents could be transformed into self-selection mechanisms whereby patentees reveal the economic characteristics of their inventions, compensate society for the protection they are granted and obtain sufficient incentives to innovate.