September 26, 2018

Support Competition, not Compulsory Licenses


In order for the private sector to develop new and innovative cures in global markets, countries must have strong legal and regulatory frameworks in place. Effective IP laws are a critical component of those frameworks, which provide legal certainty that private investment in innovation can be sustained over time. In fact, studies have shown that life-saving new medicines reach patients faster in countries where intellectual property (IP) is protected and enforced.

Chile has increasingly become an attractive destination for biopharmaceutical investment in Latin America. With one of the most efficient healthcare systems in the region, Chile hosts the most clinical trials per capita out of all the Latin American countries. Yet, some in Chile are urging a hasty step that would undermine the vibrant environment for biopharmaceutical investment.

Since 2016, Chilean lawmakers have issued three non-binding resolutions calling on the government to break patents that protect a valuable new medicine that offers a cure for many patients suffering from hepatitis C. If taken, such action, would undermine the legal certainty needed to ensure that access to medicines goes uninterrupted.

As Chile starts down the path toward compulsory licenses, the government should take note of the impact similar proposals had on innovation in its Pacific Alliance partner Colombia, which recently launched a review that could lead to the compulsory licensing of the entire class of innovative hepatitis C treatments. In the process, Colombia has sent a chilling signal to innovators that the government may no longer adequately protect IP. While Colombia hosted over 100 clinical trials annually in 2012, that number fell sharply to just 40 in 2017. It is clear that the governments that erode IP rules will ultimately damage the long-term environment for biopharmaceutical innovation and investment and jeopardize the availability of future innovative treatments in the market.

Rather than challenging IP protection, the Chilean government could create access to more of the newest, life-saving treatments by promoting competition in the marketplace. If the government puts in place a legal and regulatory environment which helps speed the approval of innovative treatments to market, Chilean patients will have greater access to an array of innovative medicines. Indeed, studies on the availability of Hepatitis C medicines in the EU have shown that promoting competition between multiple medicines in a market can help drive down the price for consumers. The answer is clear: support competition, not compulsory licenses.

Chile has long been viewed as a leader among emerging markets in healthcare. Yet, the government risks jeopardizing that leadership position if lawmakers continue to take steps to undermine IP. U.S. industry encourages the Chilean government to reverse course in order to maintain its leadership in the region and continue on the path to becoming a true, knowledge-based economy.

ABOUT THE AUTHOR
Kelly Anderson is the director of international policy at the U.S. Chamber of Commerce’s Global Innovation Policy Center.

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