Affordability versus innovation: Is compulsory licensing the solution?

In an era which marks an exceptional phase of growth in science and technology, the acute disparities in access to healthcare still persist. So where on one hand scientific advancement in medicine aims at increasing life expectancy, on the other hand there are millions who are denied access to existing medicines. Patents on medicines also pose a significant barrier to access new drugs, especially in low and middle income countries which already suffer from poor health financing mechanisms. The patent laws were built on the assumption of incentivizing the innovators by rewarding them with the exclusive right to produce, sell or market the innovation. The basic premise for granting patents was based on the thought that it would increase investment in research and development promoting dynamic gains through newer innovations. However, evidence found to support this justification is meager. So in a situation where the drug gap still persists and we aim to achieve sustainable development goals by 2030, this paper attempts to focus on understanding how compulsory licensing has been used in selected cases to alleviate the major legal and political barriers to access medicines. The methodology comprises of cross-country comparison of patent framework and compulsory licensing cases. The sample selected for study includes both developed as well as developing countries. The aim is to evaluate the policy approaches used by selected countries to grant compulsory licenses and to identify the best practices for evidence-based policy making on international issues related to pharmaceutical patents. In each case, a driving factor has been the international extension of patent laws through trade agreements; first bilaterally (US-Canada) and subsequently internationally (1995 Uruguay round, under which low- and middle-income countries were granted a grace period until 2005 to comply).

Patent implications in the pharmaceutical industry: Are static high prices leading to dynamic innovations?

Agreement on Trade Related aspects of Intellectual Property Rights (TRIPS) was laid on the premises of rewarding monopolistic patent rights to the innovator. Stronger patent protection was advocated to promote technology transfer from developed nations to the rest of the world. To boost domestic innovative potential and to maintain trade ties, most developing countries signed the TRIPS agreement. Impact of patent laws in the pharmaceutical industry was crucial as it posed threat to access health. This paper aims to analyze the impact of pharmaceutical product patent laws incorporated under the TRIPS agreement using 65 countries panel dataset from 1995 to 2016. The data is empirically analyzed using negative binomial regression and Poisson regression. Results clearly indicate that the number of pharmaceutical patents filed in US Patent and Trademark Office (USPTO) has decreased after TRIPS compliance in both low and middle income countries. However, the decline is larger in upper middle and lower middle income countries than in low income countries. The phenomenon of low patent activity has an increasingly declining trend across low and middle income countries. Hence the claimed hypothesis that stronger patent rights would increase innovative potential does not seem to stand true, which raises serious affordability concerns of bringing patents in the pharmaceutical sector.