Crystina Riffel: Pharmaceutical Drug Policies


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Crystina Riffel: Pharmaceutical Drug Policies

  1. 1. Crystina Riffel JUS494 Pharmaceutical Technologies And Inequality
  2. 2. CASE: <ul><li>Despite medical advances and increasing life expectancy, there is evidence of rising disparities in health status among people worldwide </li></ul><ul><li>Drug technologies (patents) create inequalities between third world and industrialized countries </li></ul><ul><li>Higher prices for pharmaceuticals and other healthcare inventions can prevent low-income consumers in developing countries from obtaining life-saving medicines and equipment (Lanoszka 181) </li></ul><ul><li>Many countries are at an unfair disadvantage to start with—making them vulnerable to powerful companies/countries </li></ul>
  3. 3. CASE (Cont’d): In attempt to understand how these inequalities are created… <ul><li>Focused on: TRIPS Agreement, the problems with it, impact on pharmaceutical drug policies in developing countries </li></ul><ul><li>Also focus on problems with IPRs </li></ul><ul><li>In context of international technology transfer and research development </li></ul>
  4. 4. ANALYSIS: TRIPS & IPRs <ul><li>TRIPS Agreement : Trade-Related Aspects of Intellectual Property Rights </li></ul><ul><li>IPRs: Intellectual Property Rights </li></ul><ul><li>TRIPs Agreement modeled on western legal practice </li></ul><ul><li>TRIPS (1)established the minimum global standards for IPRS protection,(2) rules on enforcement (3) and brought domestic IPRs regimes of WTO members under jurisdiction of WTO dispute settlement system </li></ul><ul><li>TRIPS goal : to ensure global technological progress by securing the inventor’s rights to benefit from their research and development efforts </li></ul><ul><li>TRIPS allows private owners of inventions to restrict access on the basis of commercial considerations </li></ul>
  5. 5. Analysis (Cont’d)… TRIPS & GATT <ul><li>TRIPS developed by GATT (General Agreement on Tariffs and Trade) </li></ul><ul><li>GATT framed a distinct set of rules and procedures for intellectual property protection to be mandatorily adopted as a standard by all the GATT members </li></ul>
  6. 6. Analysis (Cont’d)… TRIPS <ul><li>TRIPS Agreement demonstrates the dominance of developed countries in economies in IPRs </li></ul><ul><li>TRIPS Agreemnt is a component of a policy known as technological protectionism </li></ul><ul><li>Technological protectionism : policy with intention intended at consolidating an international dividion of labor where the industrialized nations generate innovations and developing countries are the market for the resulting produc ts (Lanoszka 182) </li></ul><ul><li>Agreement helps create powerful monopolies that control the market for essential knowledge-based products such as life-saving medicines (182) </li></ul>
  7. 7. Analysis (Cont’d)… PATENTS <ul><li>PATENTS: temporary monopolies granted by governments </li></ul><ul><li>Granted for a minimum of 20 years </li></ul><ul><li>They give the inventor the right to exclude everyone else from producing, selling or distributing a product in that country (Kapcsynski) </li></ul><ul><li>Allow for higher prices that allow companies to charge, provide incentives to develop and commercialize new products (Kapcsynski) </li></ul>
  8. 8. Analysis (Cont’d)… PATENTS <ul><li>PATENTS : give developing countries monopoly prices without giving them innovation , </li></ul><ul><li>allow pharmaceutical firms to keep high prices above their marginal costs of production—Result:discourages the emergence of competitors, </li></ul><ul><li>And have allowed pharmaceutical companies to maintain similar drug prices around the world despite the wide gap in the per capita income level between developed and developing countries (Lanoszka 183) </li></ul><ul><li>PROBLEM IS : </li></ul><ul><li>Patents cannot generate innovation where there is no market </li></ul><ul><li>Companies do not produce drugs for diseases that primarily affect the poor because it is not profitable </li></ul><ul><li>Fear of drug companies: </li></ul><ul><li>by allowing these countries to buy low priced med.’s, consumers from developed countries will demand the same </li></ul>
  9. 9. ANALYSIS (Cont’d) … Compulsory Licensing: A Way Around the Patents <ul><li>Compulsory Licensing: refers to a situation where a government allows an agent to produce a patented product without the consent of the original patent-owner (Mishra 4465) </li></ul><ul><li>“ provision to avoid the abuse of monopoly power and guarantee effective dissemination of knowledge” (Kabiraj 2992) </li></ul><ul><li>Gives developing countries a “ bargaining chip that can be used to negotiate better terms with multinational pharmaceutical companies” (Mishra 4465) </li></ul><ul><li>The TRIPS Agreement allows governments to override patents and allows for generic production, through compulsory licensing. </li></ul><ul><li>Governments can use compulsory licensing whenever they choose, as long as they follow certain procedures. </li></ul><ul><li>These procedures include negotiating with the patent-holder and allowing for appeal of the government’s decision. But in the case of an emergency, or where the product is for public non-commercial use, a government can issue a compulsory license without even consulting the patent-holder (Kapczynski). </li></ul>
  10. 10. Analysis (Cont’d)… <ul><li>1997—South African government implemented compulsory licensing to ensure availability of generic drugs and to reduce drug prices </li></ul><ul><li>Medicines Amendment Act — authorized two practices: (1) parallel importing and (2) licensing local companies to produce cheaper versions of drugs whose patents are held in other countries </li></ul><ul><li>Parallel importing : allows importers to buy pharmaceutical drugs from the cheapest sources available abroad (Lanoszka 191,192) </li></ul><ul><li>“ The new South African law struck at the heart of the pharmaceutical industries most precious commodity: patents ” (Cooper, Zimmerman and McGinley) </li></ul>
  11. 11. Analysis (Cont’d)… Lawsuit <ul><li>Feb. 1998--In response, a group of leading pharmaceutical companies filed a lawsuit </li></ul><ul><li>Industry claimed the new legislation was inconsistent with South African obligations under TRIPS Agreement </li></ul><ul><li>Trade sanctions placed on South Africa </li></ul>
  12. 12. Analysis (Cont’d)… <ul><li>As a result of attention to the lawsuit, there was a heighten awareness of the AIDS crisis </li></ul><ul><li>Developments of activism </li></ul>OXAM (NONPROFIT ORG.): Pointed out consequences of globally institutionalized pharmaceutical patents Considered a direct threat to health the world’s poor Noted problems of TRIPS Demanded that the WTO take steps to change patent rules that restricted access to life saving drugs
  13. 13. Analysis (Cont’d): lawsuit <ul><li>April 2001---Lawsuit dropped in response global awareness and pressure </li></ul><ul><li>Medicines Amendment Act to be enforced </li></ul><ul><li>Allowed for importation of affordable medicines --- increased use of generic drugs in South Africa </li></ul>
  14. 14. Analysis (Cont’d): What to do now? <ul><li>Compulsory licensing only allows for affordability of medicines for diseases specific to global ailments </li></ul><ul><li>It is argued that for these medical treatments, because R&D costs can be recovered from high-income consumers in the north, prices can be reduced to more affordable levels w/o diminishing incentives for future research and innovation </li></ul><ul><li>BUT…for drugs related to poor country specific diseases such as malaria and tuberculosis, there are no large markets in the north to free ride on </li></ul><ul><li>R&D of better treatments must come from markets in the south </li></ul><ul><li>Low incomes – patients in south can’t support the price-volume combinations needed to induce the commercial development of new medical treatments for these ailments </li></ul><ul><li> *(Mishra 4466) </li></ul>
  15. 15. Analysis (Cont’d): “Orphan Drugs” <ul><li>Free markets are the problem issue </li></ul><ul><li>Relates to “Orphan drugs” </li></ul><ul><li>Orphan drugs: those drug treatments which, despite having been discovered and patented, are not developed and brought to market because the small size of ailing population limits the commercial viability of this activity </li></ul><ul><li>Response in US– US Orphan Drug Act of 1983 </li></ul><ul><li>Act provided incentives: excluding marketing rights and subsidizing clinical testing for all new treatments brought to markets where number of sufferers was less than 200,000 </li></ul><ul><li>*(Mishra 4467) </li></ul>
  16. 16. Another alternative: Bulk Purchases <ul><li>Initiative that ensures survival and availability of affordable new medical treatments for poor country specific ailments </li></ul><ul><li>Bulk purchase pre-commitments include binding agreements offered by sponsoring agencies to buy effective medical treatments that are known to exist but are not developed and brought to the market because of the low demand </li></ul><ul><li>Allows researchers and companies freedom to decide which projects to pursue </li></ul><ul><li>Payments are reliant on the successful development of an affective, marketable treatment </li></ul><ul><li>funds will not be wasted or mis-directed because scientists and pharmaceutical companies will invest time and money only on those projects they think are worthwhile </li></ul><ul><li>*(Mishra 4467) </li></ul>
  17. 17. Conclusions: <ul><li>Due to the growing belief among consumers that pharmaceutical companies price their drugs to high, the US government reconsidered their complete support for the industries position in foreign territory. </li></ul><ul><li>The recent anthrax scare has forced policy-makers to take a closer look at the TRIPS Agreement and its implications </li></ul><ul><li>(Lanoszka 193) </li></ul><ul><li>Growing awareness and resistance to high medical prices </li></ul><ul><li>Investors are now more aware and concerned of the issue </li></ul>
  18. 18. Conclusions (Cont’d) <ul><li>Ranking of pharmaceutical companies </li></ul><ul><li>Evaluates them by how easy they make it for patients in poor countries to get drugs and vaccines </li></ul><ul><li>Access to Medicine Index- - has been created for “social responsibility” funds and investors who want to know how companies whose shares they own or might buy are doing at helping people at risk of AIDS, tuberculosis, malaria and other third world diseases-- may also be useful to governments, medical charities (NYT McNeil, 2008) </li></ul>
  19. 19. <ul><li>A lot needs to be done to help with the health of third world countries…We can start by providing the equal availability to medical treatment </li></ul>