[Ip-health] Intellectual Property and Competition in European and global pharmaceutical markets

[Sarah Rimmington]

European Public Health Alliance
Intellectual Property and Competition in European and global
pharmaceutical markets
http://www.epha.org/a/3144


At last, the message is getting through to politicians and policy-makers
that an inflexible system of Intellectual Property Rights (IPRs) can
have a detrimental effect on public health systems. In its current form,
the IPR model has produced some unwelcome consequences for access to
essential medicines for the patients who need them most.

Two parallel trends have recently emerged on the regional and
international stages that signify a welcome response to the issue of
competition and intellectual property(IP) in the pharmaceutical
industry. The International Working Group on Public health, Innovation
and Intellectual property (IGWG) in Geneva and Directorate General for
Competition at the European Commission have been inquiring about certain
aspects of the IP system. Even more promising is the public health
perspective taken by both forums, bringing patient and consumer issues
to the fore.


A Welcome International Development

At the international level, the World Health Organisation=92s (WHO) Member
States now recognise that market-driven research and development (R&D)
must be supplemented with additional incentives for needs-driven R&D, as
well as initiatives to ensure that these advances are affordable and
accessible to developing countries. The IGWG has brought together
country delegations for over two years to institutionalise these
concepts in a global strategy and plan of action for bridging the R&D
gap and increasing access to essential medicines in developing countries.

The final global strategy and plan of action, adopted by the World
Health Assembly (WHA) in May, devotes considerable attention to IPRs and
their impact on public health. It singles out worrying practices of
over-reaching IPR protection clauses negotiated in bilateral Free Trade
Agreements (FTAs), which circumvent the more flexible standards detailed
in the WTO Agreement on Trade-Relates Aspects of IPRs (TRIPS). The
stricter provisions in these FTAs allow monopolies to be maintained for
even longer, thus, locking cheaper generics out of the market and
keeping prices high, which inevitably puts a strain on the cost of
administering public health.

IGWG=92s global strategy also promoted developing countries=92 right to use
TRIPS flexibilities, which were negotiated at Doha for the very purpose
of supporting and protecting public health needs. Compulsory licensing
is one instrument that would enable developing countries to buy cheaper
generics for public health emergencies, but pressure from companies and
trading partners has made this option problematic.

The IGWG looked for ways to reorientate R&D priorities, under which
alternative financing mechanisms to put the current IP system. The IGWG
process was a struggle, but despite strategic negotiating by the United
States, a meaningful resolution was finally passed by the WHA.
http://www.who.int/gb/ebwha/pdf_fil...


European Scrutiny

At the European regional level, the investigations into competition in
the pharmaceutical industry, initiated by Commissioner Nelie Kroes of DG
Competition, are equally encouraging. The investigations into the
blocking of generics manufacturers, getting cheaper medicines onto the
markets quickly, by pharmaceutical companies could have implications far
beyond both those companies under scrutiny and the EU. Companies are
alleged to have extended patent protection through unfair means. These
means include the marketing of existing molecules, a practice known as
ever-greening, and vexatious litigation. The inquiry also looks into
whether drug companies=92 efforts to block competitors by extending
patents were also distracting them from developing new medicines, which
have been slow to appear on the market in recent years.

A recent report by the European Generics Association (EGA) agrees that
the current system of IPRs in the health industry stifles competition
and innovation. The current incentives actually encourage monopolies,
condoning practices such as, second use, ever-greening and other
inappropriate follow-on patenting. This IPR model, rather perversely,
diverts resources away from investment in innovation, which would
ultimately benefit public health.


Same system, similar problems.

The additional burden on public health systems, patients- and
consumer-spending brought about by the prolonging of patents, has become
a pressing issue at both European and international level. The
discussion about the European pharmaceutical market mirrors debates in
the IGWG and those put forward during the WHA in May this year. Both
address the problem of monopolies, the blocking of competition, and the
abuse of the patent system to secure big profits. But the most perverse
effect would be the stifling of innovation and the development of new
medicines with therapeutic value. As the EGA noted in their recent
report, without competition from generic medicines, there is little
incentive for innovation, cost containment, and increasing patient
access to healthcare treatments.

Though the WHA resolution represents a global strategy while the DG
Competition enquiries focus on the internal European pharmaceutical
market, both are tackling the same problems; high prices and lack of
innovation. Whether we are talking about the regional or the global, the
truth is plain; the current incentive system for companies is deeply flawed=
.
Last modified on July 7 2008.

--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: (202) 387-8030
Cell: (202) 422-2687
www.essentialaction.org/access/