In this essay about international drug pricing in the global pharmaceutical market, we focus on the issue of access to medicine in developing countries. Acknowledging the essential trade-off between equity and efficiency that characterizes international drug pricing, we provide a perspective on the panorama of drug pricing and patenting policies. These policies are designed to optimize both supply and access to drugs. We examine their respective rationales, consequences and limitations. In a context of increasingly intense market interactions between developed and developing countries, the common challenge for these regulations is to safeguard incentives for the research and development industry, while accounting for lower purchasing power in developing countries.
At the 2001 Doha convention, the World Trade Organization (WHO) declared:
« We recognize that intellectual property protection is important for the development of new medicines. We also recognize the concerns about its effects on prices. » (WTO, 2001)
This statement was a response to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) that had been adopted seven years earlier. The aim of that agreement was to set down minimal intellectual property protection standards, notably in the field of pharmaceuticals. However, the TRIPS agreement raised concerns that patenting would increase pharmaceuticals’ prices and undermine the ability of developing countries to face pressing public health challenges. The main purpose of the Doha convention was, therefore, to reform the protection of the intellectual property within the field of pharmaceuticals in order to protect public health and promote universal access to medicines.
The history of the TRIPS agreement and its amendments highlights the complexity of international drug pricing and the tension between two sometimes incompatible considerations. On the one hand, equity concerns, through the developing countries’ claim to affordable access to pharmaceutical products that treat HIV/AIDS, malaria or tuberculosis at affordable prices. On the other hand, efficiency concerns, with the pharmaceutical industry’s need to protect intellectual property rights in order to incentivize investment in innovation and development of new drugs…
- Market characteristics and problems of access to drugs in developing countries
- Impact of current policies on availability and prices
- Pricing policies
- Patent protection
- Reconciling equity and efficiency
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