January 6, 2010

Myth 5: Intellectual Property rights block developing countries’ access to medicines by making drugs more costly, stifling competition, and preventing cheaper generics from entering the market.

Fact:  Study after study has shown that IP rights actually facilitate the development and deployment of new technologies and medicines to the developing world. Further, these reports show that, among other things, the real barriers to technology access include weak legal frameworks to protect the rights of patent holders, high tariff and non-tariff barriers, limited infrastructure, and insufficient human capital in these countries to absorb the technology.

Government duties, taxes, and tariffs in many developing countries also raise the cost of medicines many times over, making vital drugs unaffordable to many. These government-imposed costs are a regressive tax on the world’s poor and should be removed to promote improved access to medicines. While pharmaceutical companies have increased access by offering medicines at or below cost—and even free—to the world’s poor, and NGOs and governments in the developed world have established global funds to help cover the costs of these medicines, developing countries need to do their share by also improving their legal frameworks for IP protection and taking other steps that will improve their ability to effectively absorb, deploy, and utilize these technologies. 

IP rights play a vital role in stimulating innovation in public health by guaranteeing private-sector researchers and investors a sufficient return on their investment if they are successful. History has shown this market-driven process to be very successful. For example, nearly all of the 300 products on the World Health Organization’s Essential Drug List came from the R&D-based pharmaceutical industry. Without strong IP rights, a good share of this R&D might never have been conducted in the first place. Generic drugs can help lower costs for consumers, but they must be allowed in a way that does not undermine the incentives or remove the means by which companies conduct R&D into new and better medicines. All of this must be done, as well, in a way that safeguards drug quality for patients. 

Lastly, without strong and enforced IP rights, the counterfeiting of medicines can run rampant, resulting in the proliferation of fake or poor quality drugs that either fail to perform as a patient requires, or include toxic materials that can harm (and kill) someone who is ill. In either case, patients and consumers suffer when IP rights are not protected and enforced. 

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