When a company is introducing a new product which involves an innovative way of tackling with an issue, the company has exclusive rights for this invention. Hence, any invention that involves an inventive step and is capable of industrial application, can be patented. However, a discovery, a scientific theory or mathematical method, an aesthetic creation, literary, dramatic or artistic work, a method for performing a mental act, playing a game or doing business and the presentation of information or a computer program, are not patentable.
Development is the gradual growth and prosperity of something such as a business, an organization or an industry.
Research is the procedure of searching about something and involves studying something and trying to discover facts about it.
The pharmaceutical market is a market functioning under its own rules and conditions. One of its basic characteristics is the pharmaceutical patents. When a company introduces a new drug for the treatment of an illness, this drug can be manufactured and sold just by this company for a specific amount of time, which varies according to the drug and the country it has been manufactured at and will be sold in. This means that the drug is under patent protection and as result no other company is allowed to make profit from it or even produce it. The patent system is a system which mainly focuses on the protection of the interests of the company that has invented a new drug and indirectly it is a way of encouraging the pharmaceutical companies to do further researches and come up with new drugs. However, during the time that the drug is under patent protection, the company that holds the patent is given a monopoly and it is allowed to charge the drug at any price they wish to. Due to the high charges, many patients cannot afford the drugs and this leads to inequality in the provision of drugs.
As soon as the patent has expired, any other company has the right to produce the drug and sell it at the market. The drug is now called the generic drug and according to the legislation of each country it can be similar or identical to the branded drug. More specifically, taking into consideration the guidelines in most countries, including those from the US FDA, the generic drug must be identical to the branded drug as long as efficacy, safety, usage, route of drug administration, pharmacokinetics and pharmacodynamics are concerned 4. Once the generic drug is on the market, the monopoly of the patent holder is removed. The high competition among the companies that offer the drug in different prices, results in a drop in drug costs. The drop in the prices leads to life-saving as well as to the provision of drugs to the general population at reasonable prices.
It is still possible, though, for the company holding the initial patent to reapply for the patent by forming a new version of the medicine that is different in comparison to the brand drug. Additionally, the patent could be renewed if the drug regulators detect faults in the original drug and remove it from the market.
If pharmaceutical patents did not exist the companies would have no reason to spend a big part of their budget in inventing a new drug, since right after, it would be copied and manufactured by other companies, which would be taking advantage of it. This means that without the protection offered by the patent system, there would be no interest, firstly for the inventor to spend his/her time and effort to the formulation of an invention, since others could so easily replicate it and secondly an absence of patenting would make inventors protect their ideas through secrecy and non-disclosure.
In addition to the above, economists claim that pharmaceutical patents, positively affect the market and the economy, because they implicitly lead to innovation and research. The reason for this is that companies invest in research and development since the development of technological advancement can offer a significant profit to them. Patenting makes this process very profitable, since it ensures that others do not replicate the product with the aim of gaining a share of the potential profits. As a result, companies tend to spend their money in research and development and this investment leads to technological advancement. It is evident, though, that this procedure would certainly not occur if protections were not provided by the pharmaceutical patents.
Although it is normally not encouraged at all by the process of competition, it has been noted that monopolies, caused by the patenting process, preclude most forms of competition. As a result, most companies, wanting to take advantage of the monopoly a patented drug can offer, want to invest in research and development in order to ensure a significant and relatively long profit.
Moreover, due to the patent system adopted in the pharmaceutical market, many companies invest in research and development and this results in more jobs being available. The fact that more jobs are open leads to the fruitful functioning of the economy as a whole.
Last but not least, a company gains a lot of prestige by having a monopoly at the market. Simultaneously, at some companies, securing patents can lead to promotions, bonuses, and higher salaries, as well as bragging rights.
All in all, the application of the patent system in the pharmaceutical market has led to several innovations, further research and technological development.
The fact that the governments all around the world are allowing this artificial economy, which the patent system provokes since there is no competition between the pharmaceutical companies, leads to huge issues regarding inequality in the provision of drugs. To be more specific, the company that holds the patent for a drug is the only one allowed to sell it, resulting in extremely high prices. Bearing in mind that the company can hold the patent for at least 20 years, we can easily understand that for these 20 years this drug will be as if it does not exist since the majority of the population won’t be able to afford it. It is essential to mention that almost ten million people die each year because they cannot afford the necessary medicine for the treatment of their disease. Furthermore, three billion people all around the world are being at risk from diseases that lack market incentives for drug development.
Pharmaceutical companies who have rights to make profits on innovative new drugs and those who wish to direct companies to innovate new pharmaceuticals for developing countries have been arguing for the past couple of years. It is noted that during the last 25 years, out of all the drugs that have been developed, only 1% of them are for tropical diseases. The medicines that treat these diseases do not represent a profitable venture for the companies and thus the medicine that are developed in order tackle with diseases of the developing world are limited. Hence, that the patent system is mainly responsible for the luck of necessary medicine in LEDCs.
The United States of America (USA) has one of the well-established patent systems in the world. Bearing in mind the effectiveness of this system, it is the ideal place for a pharmaceutical company to become profitable. In 2001, 402 new cancer medicines, 123 new treatments for heart disease and stroke, 83 new AIDS drugs and 176 new drugs for neurological diseases have been developed. These new drugs were the result of patent incentive with companies expecting to have a return in their investment on the research and development of these new drugs. This shows, that the U.S.A.’ s pharmaceutical market bases its profit on the patent system.
India is one of the top twenty leading exporters of pharmaceutical products, with the top manufacturers directing their business towards the MEDCs. Before 2005, India hadn’t adopted the patent system and this meant that medicine that treated illnesses such as HIV/AIDS, tuberculosis, cancer, etc., were developed in India and then were transferred to developing countries where they were used with the aim of treating such diseases. However, later on, India adopted the patent system as well and thus no more drugs for the treatment of diseases similar to the above were manufactured. Today, a large number of generic drugs are being patented in India including vaccines making it difficult for the industry to produce life-saving medicines.
In South Africa, each year millions of people die because they are infected by the AIDS/HIV virus. Due to the pharmaceutical patents, the prices for the essential medicine are extremely high and hence most of the people cannot afford them and finally die. In countries like South Africa, there has been illegal medicine trade in order to provide the citizens with drugs in reasonable prices. After the prohibition of such actions, though, the amount of people dying increased. As a result, the government of South Africa decided to allow the trade of medicine and the production of medicine by third parties without controlling if they copy or not the patented drugs of a large pharmaceutical company. This situation dissatisfied all the company owners in South Africa and that is why there has been a “war” between them and the government.
India put into place a series of policies aimed at moving the country towards self sufficiency in medicines
Drug Price Competition and Patent Restoration Act
Most recent changes to patents resulted from the General Agreement on Tariffs and Trade Uruguay Round in 1994, which established an international uniform standard of 20 years for patents
India officially changes its patent laws and starts looking at new “mailboxed” patent applications
Since the patent system has both a positive and a negative effect on the market and on the society as a whole, each nation should focus on its own policy. For instance, the MEDCs will stand for the pharmaceutical patents because they offer economic growth and technological development to their nation, whereas the LEDCs will not support the system since it is the reason for so many people’s deaths. It is not up to the United Nations, though, whether this system will be abolished or not. Nevertheless, it is essential to ensure that all people have access to medicine that can treat their diseases. This can be achieved through alterations in the current patent system.
First of all, a very good solution would be to limit the period of time during which a drug is under protection. In order, though, to urge the companies to invest in new medicine, despite of the fact that they will be holding the patent for less time, the governments should reward innovation with ways such as:
? The governments, that can afford so, should limit the taxes they impose to the companies that invest in a new medicine. This reduction will be calculated according to the money the companies need to spend for manufacturing a specific drug, the period of time the company will be working on it and the number of people who will be working for the company in order to manufacture the new medicine.
? The governments should also offer grants or other subsidies to innovators at the early stage of medicine research. This method was adopted by the US National Institutes of Health (NIH), which provides $30 billion annually in government funding for medicine research.
? Additionally, prizes should be offered to the companies and inventors who manufacture new drugs. These prizes will be both financial and honorable meaning that the inventor will receive both money and fame. This would give the company and the inventor a motive to continue their work.
? The companies will be gaining profit from the other companies that will be selling their drug. This way they will be having a monopoly for less years but their income will be increased since the source of their profit will be the sails of their drug from other companies as well.
Another way to tackle with the issue would be to increase the time during which the company will be having monopoly on the drug but simultaneously force it to sell the medicine in reasonable prices so that it will be affordable to all people. This way both the company will be holding the patent for more time and will be thus ensuring a long-term income and at the same time most people will be able to buy the drug.
Moreover, it is essential for the Non-Governmental Organizations (NGOs) to create a network of provision of the drugs and prioritize areas which suffer the most from certain diseases. The use of volunteers with the necessary experience would be needed for this action.
Taking into consideration, that due to the fact that many companies do not invest in drugs that treat diseases such as AIDS because they have no interest in doing so, company owners should be urged to manufacture products that will be sold in the developing world. The World Bank and other relevant organizations must help financially for the implementation of this measure.
Finally, as soon as the patent protection has elapsed governments should urge all other pharmaceutical companies to manufacture the drug because the more the companies, the more the competition and this leads to the reduction of the prices. As a reward, the government should fund a part of the production or offer grants or other subsidies.
Certain nations have abolished the patent system, due to the fact that numerous people were dying since they could not afford the essential medicines for the treatment of their diseases. As a result, companies stopped producing new medicine and this led to a pause in the technological advancement of the country. At the same time, the companies closed and many people lost their jobs. We hence reach the conclusion that abolishing the pharmaceutical patents will be harmful for the economy and the development.
* Bear in mind that the United Nations funds are unlimited