Patents help ensure that companies can recoup their development costs-and make profits-by selling their products without competition for a set period of time. The pharma industry has followed that model for decades.
So the industry has reacted with predictable horror to recent calls to ignore patents in sub-Saharan Africa to make AIDS medicines more affordable. Pharma companies believe that if patents are ignored, there will be little or no incentive for future research into new medicines, threatening the sustainability of the entire drug discovery process.
In May 2001, the United Kingdom's secretary of state for international development, Clare Short, established a Commission on Intellectual Property Rights to consider how best to design IP regimes to benefit developing countries in the context of international agreements such as TRIPS and to make them part of a broader policy framework.The report, published in September 2002, concludes that global patent rules raise the price of medicines in developing countries and bring no benefits, and that poor countries should therefore limit patent protection. It also suggests that they encourage local production of generic versions of vital medicines, consider the compulsory licensing of "essential" drugs by overruling pharma companies' market exclusivities, and import patented medicines if they can buy them more cheaply elsewhere.
The Association of British Pharmaceutical Industry's Ben Hayes expressed outrage at the recommendations: "The idea that Africa should ignore IP is crazy. What incentive would there be for research to make new and better drugs?" He also referred to the situation in India, where IP is already ignored. Although generic AIDS drugs are available there, India has one of the fastest growing AIDS problems in the world. Clearly, he added, the view that patents are the problem is simplistic.
ABPI's deputy director general Andrew Curl points out that just because a medicine is not patent protected does not mean it is readily available in developing countries: "More than 95 percent of the medicines on WHO's essential drugs list are not patented and can therefore be copied by generic manufacturers."
ABPI is particularly concerned about the proposal for compulsory licensing and an extension of parallel trade. It believes that many factors other than IP affect people's access to healthcare in poor countries, including a lack of medical services, delivery mechanisms, and the infrastructure needed to distribute and administer medicines safely.
Oxfam believes the report does not go far enough, because poor countries tend to lack the technology to manufacture their own medicines. It also called for a wholesale revision of the TRIPS agreement, which it believes is skewed to the disadvantage of the developing world.
"For too long, IP regimes have been regarded as food for the rich countries and poison for poor countries," says UK High Court patents judge Sir Hugh Laddie in the report's foreword. He believes the report shows that the situation is not as simple as ABPI makes it out to be and that each country must find its own approach. He adds, "Governments in all countries should make decisions with that in mind."
ABPI's Hayes cites efforts in Uganda that show how pharma can work with national governments and nonprofits such as WHO, within the context of existing IP regimes, and still deliver healthcare to those in need. Such initiatives, he suggests, may point the way to resolving everyone's concerns.