[Ip-health] IHT: Patents are the wrong target

[Malini Aisola]

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"NGOs like Oxfam and Doctors Without Borders provide fantastic
humanitarian aid to the third world. But when the World Health Assembly
and other international bodies meet, officials should advance policies
that have proven effective rather than radical political agendas that
will help no one."

Patents are the wrong target

By Benedetto Della Vedova
Tuesday, May 27, 2008

http://www.iht.com/articles/2008/05/27/opinion/edvedova.php

When the World Health Assembly met in Geneva last week, scores of
nongovernmental organizations descended on the city to lobby for a new
cause in global health care: eliminating the patent system.

Faced with the knowledge that 30 percent of the world lacks access to
life-saving medicine, advocates like Doctors Without Borders and Oxfam
have marshaled their forces to convince members of the World Health
Organization to scrap the patent system. They believe their efforts will
increase access to vital pharmaceuticals in the third world.

However, while no one would question the motives of these groups, if
they are successful they will endanger the lives of the very people they
are trying to help.

Well-meaning NGOs oppose patents because the temporary monopoly that
patents provide allows pharmaceutical companies to charge high prices
for their medicines. What these NGOs fail to consider is what would
happen without patent protection.

Development of pharmaceuticals is among the most expensive and risky
business propositions in the world. Only .02 percent of chemical
compounds tested by a pharmaceutical company will ever go to market.
Each drug takes 10 years to develop and costs about $1 billion. And of
the few medicines that do eventually reach consumers, 70 percent will
never be profitable.

Without the protection of patent rights it would be impossible to ever
turn a profit developing new medicines.

Rather than attacking the patent system, these NGOs should focus on the
real obstacles to getting patients the medicine they need.

Poverty is, of course, the greatest threat to world health. In poor
countries about 45 percent of the cause of disease is related to poor
nutrition, indoor air pollution, and lack of proper sanitation. Poverty
also impedes access to pharmaceuticals, but not just because of price.

"It is very obvious that the elephant in the room is not the current
price of drugs," according to Kevin De Cock, the director of WHO's HIV
division, in 2006. "The real obstacle is the fragility of health
systems. You have health infrastructure that is dilapidated, and supply
chains that don't exist."

Poor nations lack the infrastructure needed to distribute drugs. Good
doctors, nurses, and hospitals to administer the drugs properly are also
lacking. In fact, according to one World Bank study, education,
distance, culture, and other factors that affect the demand for medicine
may be more important determinants of access than price.

Without correcting these basic problems, reducing the price of
pharmaceuticals will have a negligible impact on the availability of
drugs worldwide.

Of course, price is not irrelevant when it comes to accessing medicine.
But even here patents do not deserve all the blame. Governments have
erected unconscionable tax burdens on medicine. Taxes, duties, tariffs,
and markups by government procurement agencies all inflate the cost of
drugs. In some countries these policies contribute more to the final
price than the manufacturer's price.

These taxes contribute little revenue and harm the most vulnerable
members of society. Eliminating them would be a low-cost means of
expanding access to medicine.

In addition to eliminating these government-created price increases,
there are a number of reforms that can be undertaken to increase access
without eliminating the patent system that ensures continued research
and investment in pharmaceuticals.

Strengthening the patent systems in the third world would encourage
pharmaceutical companies to invest in medicine to combat the diseases of
poverty.

Governments could work to expand pre-existing incentives for research in
neglected disease. The U.S. Orphan Drug Act, enacted in 1983, provides
tax credits and market exclusivity for developing treatment for rare
diseases. Annual creation of new treatments for rare diseases was 12
times greater in the 16 years following the passage of the Orphan Drug
Act than in the previous decade. The success of the legislation has led
to similar models in Japan and the European Union.

Researchers at Duke University have proposed a voucher system that would
reward companies that develop new treatments for neglected diseases with
vouchers for a Federal Drug Administration "priority review" of any
other drug. This voucher would potentially increase revenue by hundreds
of millions of dollars. Part of these revenues could be used by
companies for philanthropy toward third world countries to help them in
acquiring patent products. Vouchers could even be paid by companies at
an affordable price, to be used by governments to provide medicine to
poor countries.

Combined with the Orphan Drug Act, the voucher system would provide a
powerful incentive to develop new treatments.

NGOs like Oxfam and Doctors Without Borders provide fantastic
humanitarian aid to the third world. But when the World Health Assembly
and other international bodies meet, officials should advance policies
that have proven effective rather than radical political agendas that
will help no one.

/Benedetto Della Vedova is a member of the Italian Chamber of Deputies
and a former member of the European Parliament.
/


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Malini Aisola

Knowledge Ecology International

1621 Connecticut Ave., NW, Washington, DC 20009 USA

Tel.:  +1.202.332.2670 Fax: +1.202.332.2673