By Prof. Dr. David Taylor, University College London
Introduction
In the absence of a vaccine much of the positive progress on combating HIV/AIDS recorded in the last 20 years has been due to the availability of effective anti-viral drugs. Seen from this perspective the process of drug innovation underpinned by IPRs, that in global public interest terms exist to encourage research investment and the open communication of useful findings, has been a clear success. But the history of the HIV global epidemic also reveals major problems related to supplying what were when they were first marketed some of the world’s most advanced medicines to the world’s least economically developed communities.
Concerns about the high prices of AIDS therapies led to extensive questioning of the role of intellectual property protection in relation to world development. In 2001 the Doha Declaration highlighted the ability of nations to circumvent IPRs when public health requires low cost access to new products. In reality, world-wide improvements in the use of anti-HIV drugs have stemmed more from advances in aid policies and pharmaceutical purchasing and delivery strategies than they have from suspending patent rights. Nevertheless, anxieties about the relationships between granting IPRs and achieving sustainable development live on in many spheres.
Trade, innovation and prosperity
The origins of patents, trademarks and copyrights go back to ancient Greece, Imperial Rome and medieval Venice. However, the foundations of modern IP law are normally attributed to British legal reforms in the early 1600s which stopped the then King, James I, from granting monopolies to his favourites as an arbitrary act of patronage. This meant that what were in effect patents could only be awarded for temporary periods to those introducing genuinely original innovations. Advances in areas such as copyright law followed at the start of the 1700s as a prelude to the industrial revolution, which in part hinged on the existence of IPRs. As nineteenth century economic thought developed, there was an early emphasis on the value of international free trade as a means of allowing countries to exploit their relative advantages in order to build wealth. In the short term this benefited those most able to adapt: in the longer term everyone’s standard of living has risen.
It is more explicitly realised today that innovative capacity underpins successful trading and wealth creation, which in turn links to better health and increased wellbeing. In that IPRs foster innovation by enhancing investor confidence, continuing to grant them will contribute to achieving the Sustainable Development Goals identified by the United Nations in 2015. In practical terms enhanced global wellbeing is critically dependent on the existence of intellectual property law.
However, this is not to deny that those whose occupations and ways of life are made redundant by new technologies could suffer as a result, unless effective social ‘safety nets’ exist to shield them. Likewise, in the case of biomedical innovations the poorest in the world will not benefit if these innovations are not also affordable and accessible, for example via rebates in prices of medicines for developing countries (which also means that high- and middle-income countries should pay their shares in order to afford the poor country rebates). A caveat to add, therefore, is that harvesting the full benefits of IPRs depends on the effective pursuit of all forms of social justice, nationally and internationally; as well as willingness to pay for new innovations by those who are most able to. Enlightened innovators and governments care for not only their own rights but those of all their customers.
Policy choices
Different forms of industrial, scientific and artistic progress are impacted by intellectual property provisions in different ways. The funding of pharmaceutical advances is unusually dependent on patents, together with marketing exclusivities associated with the use of original research data in licensing new treatments. This is because products such as medicines are typically very expensive and difficult to develop, but do not have multiple parts (like, say, jet engines) and have low marginal production costs. They are therefore relatively easy to copy and sell at low cost. It is also the case that due to safety and allied concerns their manufacturers cannot regularly update them as software producers or fast moving electrical good makers are able to do.
Added to this, the nature of health care is such that across the world those most in need of effective medicines, vaccines and diagnostics are often least able to pay. Although with most forms of vascular and neurological disease and the cancers rising prevalence is associated with population ageing following the first key stages of human development, there are likely to be more conflicts ahead as poorer communities seek world-class treatments for their citizens.
Some commentators seem to believe that the funding of pharmaceutical research and development could in future be dis-linked from products’ prices via measures such as separate State funding for R&D programmes. However, the realism and desirability of such suggestions is questionable. More viable ways forward are likely to require adequately resourced universal health care systems linked to international agreements which both protect the integrity of IPRs and enable differential pricing to ensure that poorer nations only pay affordable amounts for access to vital technologies.
The positive news from a pharmaceutical standpoint is that low marginal production costs make so-called ‘Ramsey pricing’ a viable way forward, providing vested interests in both the emerging and established economies permit it. Alongside this, as medicines mature they become more valuable to patients as their appropriate use is better understood, while prices fall to commodity levels when generic competition ensues. Hence the ultimate goal of effective and affordable pharmaceutical care for all will be attainable, given sufficient political will and respect between stakeholders for each other and the endpoint of sustainable global freedom from disease.
References available from the author at David.G.Taylor@ucl.ac.uk. For an introduction see Affording the Future? at https://www.ucl.ac.uk/pharmacy/sites/pharmacy/files/affording-the-future_0.pdf
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