BALANCING INTELLECTUAL PROPERTY RIGHTS AND ACCESS TO MEDICINE
Leading pharmaceutical companies play a crucial role in developing healthcare through the production of new drugs to battle various health problems. However, the patent system-a system that gives pharmaceutical companies the right to exclusively use IP-pushes up the price of drugs and denies care at a life-saving moment, especially to weaker countries. It thus clashes considerably by being the need to promote innovation by safeguarding intellectual property while assuring that crucial medicines for public health are accessible at affordable prices. In some cases, the monopoly enjoyed by pharmaceutical companies over their innovations is accompanied by a high price medicine because of national patent laws and the TRIPS Agreement on Intellectual Property Rights.
It is during such emergencies that the pandemic of COVID-19 and the HIV/AIDS epidemic have thrown light on the importance of flexible intellectual property regimes for granting access. With that, this essay is focused on discussing the trade-off between intellectual property rights and medical access regarding the function of generic medicines and other legal remedies, such as mandatory licensing.
Understanding Intellectual Property Rights In Pharmaceuticals
Intellectual Property Rights (IPR) is an essential element in the pharmaceutical industry. It protects and promotes innovation as well. For the pharmaceutical drug market, patents are a very crucial aspect because they give the pharmaceutical companies a monopoly, or in other words, the right to use their ideas exclusively for a specified period, which usually is 20 years. In turn, exclusive rights thus enable the patent holder to have a drug's monopolistic right on production and pricing since such rights do not allow competitors to manufacture or sell it without the patent holder's permission. While patents spur innovation by promoting what often requires immense sums of money in research and development (R&D), patents also make it harder for people to receive access to low-cost drugs, especially in developing countries where patented drugs may be prohibitively priced[2].
Ø Patents and Their Role in Innovation:
Patents are crucial to innovation in pharmaceuticals. The creation of a new drug involves several years of research, clinical trials, and clearance processes that are undeniably capital-intensive. Pharmaceutical companies can recover their investment by charging sky-high prices for their patented drugs because of the temporary exclusivity patents give them. The patent monopoly period is critically essential to provoke more research as, in the absence of patent protection, companies could not be economically motivated to take the risk of investing in highly cost R&D ventures. Although patents inspire the pharmaceutical research, simultaneously, they also raise the price of drugs that prevents many individuals from acquiring their life-saving treatment.
Ø TRIPS Agreement and Its Impact on Pharmaceutical Patents:
The World Trade Organisation enforces the TRIPS Agreement, which established minimum requirements for the protection of IP rights, including pharmaceutical patents and the harmonization of patent laws throughout the world. TRIPS has required WTO members to provide 20 years of patent protection but has severely impacted the availability of healthcare across the globe. While pushing pharmaceutical inventions worldwide, it was also criticized for supposedly limiting access to relatively affordable drugs, especially in less developed nations[3]. However, as the 2001 Doha Declaration set forth, provisions like compulsory licensing under TRIPS allow governments to manufacture generic versions of copyrighted medicines in cases of public health emergency[4].
Ø The Monopoly Power of Patents and Its Implications for Pricing:
During the period of the patent, pharmaceutical companies enjoy monopolistic control over both the manufacture and pricing of pharmaceuticals. Because businesses can set prices that incorporate significant investments in marketing and research and production costs, exclusivity normally results in higher prices. These high prices severely impair access to needed drugs, especially in low-income countries-even when they could be deemed acceptable as a means to recoup R&D costs. Companies also frequently engage in "evergreening," with minor tweaks to drugs to keep patents longer and further prolong the arrival of reasonably priced generics, and thus further entrench inequities in global health. This seems to be the ongoing legal and moral dilemma about finding a balance between patent rights and the demand for low-price accessibility.
Challenges To Accessing Affordable Medicines:
One of the main concerns in the global health agenda over access to affordable medicines is the right to patents by pharmaceutical companies. With the existence of patents, companies can charge even very high prices for their medicines simply to recoup the investment in R&D. Additionally, they will have the exclusive right to produce and sell those medicines for a specified period. This hence leaves low-income people at a total disadvantage, especially in developing countries, where out-of-pocket costs are high, and the healthcare sector is underfunded.
Ø The Impact of Patent Protection on Drug Prices:
In large measure, patent protection inflates drug prices. The lack of generic competition throughout the patent period gives the patent-owning pharmaceutical company near-monopoly over the drug. Such prices are often set well above cost because of this. Millions of patients are barred from taking medicines that could save their lives, for example, cancer treatments or antiretrovirals for HIV, even though patents are justified on the rationale that they enable companies to recover their investments and induce new drugs.
Ø The Role of Pharmaceutical Companies in Access to Medicines[5]:
Because of their potential to either assist or hinder affordability, pharmaceutical companies have a great role in whether it is easy or not to access medicines through their pricing mechanisms and rules on patents. Some companies have made voluntary licensing agreements or have mounted international campaigns to better increase access to pharmaceuticals in the less developed countries. However, most focus on maximizing profit, and many times, this leads to low-income communities accessing fewer innovative drugs.
Ø Global Inequalities in Access: Developed vs. Developing Nations:
Developed countries have better health care structures, are covered by various insurance policies, and have better-negotiating positions to come out with easy access to patented drugs in most instances. Underdeveloped countries experience serious medicine price problems; government funding is also scarce; and the health care system and their related infrastructures are weak compared with these developed countries. This is the reason for significant gaps in the area of access. This raises questions about how unevenly necessary drugs are being distributed and, therefore, how international co-operation and legal changes are badly needed to cope with this problem.
Compulsory Licensing As A Solution
Compulsory licenses can be issued by governments to sanction generic versions of copyrighted medicines even without the consent of the patent holders, through a legal process known as compulsory licensing. It usually happens when there is an exceptional public health emergency. Compulsory Licensing, enacted under the TRIPS Agreement of the WTO, ensures access to a life-saving treatment at affordable prices and balances the rights of intellectual property with public health. Governments can license firms under specific conditions, for example, in cases of national crises or anticompetitive behavior. This allows local producers to manufacture drugs locally, and because the latter are not branded, the prices will be cheaper and accessible.
Ø Case Studies: India, South Africa, and Brazil:
Several countries have effectively used compulsory licensing to combat public health challenges:
India
For enhancing accessibility to reasonably priced drugs, India is known to make strategic usage of compulsory licensing[6]. For the first time, India implemented mandatory licensing in 2012 for the Bayer cancer drug Nexavar that is sorafenib. The Indian government cleared Natco Pharma, a local manufacturer, for making the generic version and brought the price down by more than 90 percent. Bayer quoted it around $5,600 for a month. The generic alternative would have cost around $175. This ruling set an important precedent in the use of compulsory licensing in a public health emergency and increased dramatically a patient's access to life-saving treatment for cancer in India.[7]
South Africa
South Africa had to come to compulsory licensing in the midst of the HIV/AIDS epidemic when the cost for antiretroviral (ARV) treatments, which many could not afford anyway, was just too high. The government pressure and license would force the pharmaceutical companies to cut down the exorbitant prices of the ARVs by many folds. In effect, it helped citizens get access to drugs that could save their lives in time and help South Africa combat the outbreak of HIV infections[8].
Brazil
Brazil also used its compulsory licensing in the early 2000s to produce low-cost HIV/AIDS drugs. Compulsory licensing was used on government patents for expensive ARVs, such that low-end local companies were able to manufacture the generic versions at much more affordable prices. This cut down the treatment cost significantly and made it easier for the country to effectively deal with the HIV/AIDS challenge[9].
Balancing Innovation And Public Health: The Role Of Generic Medicines
Generic drugs, providing affordable alternatives to patented drugs, are vital in maintaining a balance between public health and pharmaceutical innovation. Generic drugs deliver life-saving therapies in the low-income regions when the patents have expired. Global health equity will require generics, even though patents held at the full extension permitted under current law and draconian IP rules present obstacles.
Ø The Importance of Generic Drug Manufacturing:
Generic drug manufacturing plays a very important role in bridging that gap between innovation and public health. With the expiry of a drug's patent, generic manufacturers can create comparable drugs at a fraction of the price, thereby increasing access to needed therapies, especially in low-income countries. It is also helping meet public health needs by making affordable alternatives available to expensive proprietary medications for life-saving therapies, such as insulin, cancer therapies, and antiretrovirals in HIV/AIDS. Generics are critical in helping balance the profit-driven innovation paradigm of the pharmaceutical business with a more general goal of global health equity through competitive pricing.
Ø Case Study: India’s Role as the “Pharmacy of the World”:
Due to the status sometimes accorded to India as the "Pharmacy of the World," it now finds itself in a front line in producing generic drugs. The country exports high-quality and reasonably priced generic medications to over 200 nations. Indian generics have played a significant role globally in health initiatives, especially in fighting HIV/AIDS by granting access to affordable antiretrovirals for millions of people in impoverished nations. It became very flexible regarding patent rules, and the Indian pharmaceutical industry was in fact flourishing and is using compulsory licensing too. Based on this, affordable medicines were made accessible to people from all parts of the globe[10].
Ø Challenges Faced by Generic Drug Manufacturers Under Current IP Laws:
There are a number of hurdles that block generic drug producers under the current intellectual property regimes. The patent protections, as offered by TRIPS-compliant standards, keep the monopolies of the pharmaceutical corporations in business by delaying the generation's entry into the market. The other tactics- never-ending are evergreening-minimal changes done on a drug's patent to extend the life of the drug.[11] These issues also fall harder in developing and low-income nations as they hinder on-time access to reasonably priced generics.
Public Health Exceptions In Patent Law
Patents on public health exceptions allow governments to promote the availability of essential drugs as opposed to strict enforcement of patents. Mechanisms such as compulsory licensing enable countries to make affordably available generics in times of health crises. The tug and pull of public health and intellectual property rights continue, the current court cases attesting.
Ø Use of Patent Exceptions for Public Health Purposes:
Exceptions to public health-related patent law ensure that a need for affordable medicines is prioritized above strict protection of intellectual property rights. In order to make available essential medicines to many people, especially during public health emergencies, several governments allow exceptions to, or restrictions on, patent rights. These provisions guarantee that nations can respond to medical emergencies in a timely manner by allowing governments to bypass patent protections on lifesaving medicines, thereby providing at-risk populations with the therapies they need.
Ø The Role of Governmental Interventions and Policies:
Effective use of public health exceptions relies on government action. The two policies that allow a country to manufacture or obtain generic copies of patented medications without infringing on patent rights are compulsory licensing and parallel importation. Countries, for example, Brazil and India, have proved that it is possible to advance public health interests respect of the challenges of patent law through political pressure to successfully implement such measures in expanding access to antiretroviral drugs for HIV/AIDS.
Ø Recent Legal Battles Over Patent Infringement and Policies:
Recent court cases highlight the conflict between public health and patent protection. Instances such as the cases in which pharmaceutical corporations objected to governments' rights to make use of compulsory licensing underscore the continuing battle to balance such pressing needs for affordable medication with incentives for innovation. These jurisprudential setbacks underscore the importance of maintaining balance in overtly draconian legal regimes that safeguard the rights of patent holders, but also allow for certain exemptions on public health grounds and thus, globally, would tend towards a balanced approach to intellectual property in health.
One such case is Bayer Corporation v. Union of India (2012)[12], where India granted its first compulsory license for Bayer's cancer medicine, Nexavar, or sorafenib. A large number of patients could not afford the said treatment as Bayer was charging an astronomic price for it. Acting on this, the Indian Patent Office handed a verdict claiming that drug was unavailable at a reasonable price and granted a generic manufacturer to manufacture it at a significantly lower cost.
Legal And Ethical Considerations
Ethical issues pertaining to the monetarization of profits above public health arise since there is a balance in accessing medication and that of intellectual property rights. Conflicts, on the other hand, lie between human right to health and corporate patent rights. Legal systems are different; in some countries, flexible intellectual property laws are tolerated so that the access to cheap medicines can be extended, especially when emergency situations prevail in the medical profession.
Ø Ethical Concerns in Balancing IP and Access to Medicines:
Balancing access to necessary medications with intellectual property rights thus raises serious ethical questions. Pharmaceutical firms argue on one hand that strong patent protections are necessary to recover R&D expenses and to encourage innovation. But for low-income groups-especially in developing countries patented medicines sometimes remain inaccessible due to their costs. This raises an ethical question: Would financial incentives outweigh the demand for affordable drugs globally?
Ø The Human Right to Health vs. Corporate Patent Rights:
The human right to health, as articulated in the Universal Declaration of Human Rights[13] and other international treaties, obliges everyone to a basic form of medical treatment available to them, including medicines. Such a fundamental right often comes into conflict with the corporate patent rights, as the latter give precedence to the financial interests of pharmaceutical corporations. This is because while patents become too high in profile for public health goals to be neglected, making patents too high in profile undermines the attainment of public health objectives because unequal access to life-saving therapies may be realized.
Ø Legal Frameworks in Different Jurisdictions:
The balance between public health and IP rights has been struck much differently by various countries in a completely different legal stance. For example, flexible intellectual property laws of India, which incorporate mandatory licensing, allowed the production of reasonably priced generic medicines. On the other hand, the US still maintains stronger patent protections, where patents often delay the entry of generics.
A comparative study has shown that both Brazil and South Africa, countries with lenient rules regarding intellectual properties, have utilized the legal framework to gain access to such medicines which are greatly needed during public health emergencies. This situation underlines an ongoing ethical and legal debate over how to ensure intellectual property rights do not violate the universal right to health.
Conclusion
Continued concerns over global access to medicines and intellectual property rights, particularly concerning life-saving therapies, also continue to pressure pharmaceutical innovation. "On the one hand, patent protection is essential for promoting pharmaceutical innovation. On the other hand, it may create monopolies that increase access prices to medications for disadvantaged populations.". Such salient topics are the ethical dilemma between the human right to health and corporate patent rights, generics in guaranteeing access, and legislation in the guise of mandated licensing. Elastic IP frameworks do indeed augment the pro-health policies' benefits in Brazil, South Africa, and India; yet, there still exist quite disparate access inequities regardless of where on this earth one may stand-in the distinction often made between developed and developing countries.
To address these problems, legal reforms are needed, including promoting compulsory licensing during public health emergencies and relaxing patents by discouraging activities such as evergreening that unduly extend patent monopolies. Prior to national and international policy changes, fair access to essential medicines must be recognized as a prior priority. Only when a balance has been struck between the demand for low-cost healthcare in the global sphere and innovation incentives in such a way that intellectual property laws do not become obstacles to the realization of this fundamental right to health will it be possible to live together in peace with IP rights and public health.
[1] Aparna Srivastava is a 3rd Year Law Student at Lloyd Law College.
[2] Outterson, Kevin, "Pharmaceutical Arbitrage: Balancing Access and Innovation in International Drug Markets." 5 Yale Journal of Health Policy, Law, and Ethics 193 (2005).
[3] Sell, Susan K., "TRIPS and the Access to Medicines Campaign." 20 Wisconsin International Law Journal 481 (2002).
[4] Correa, Carlos M., "Implications of the Doha Declaration on the TRIPS Agreement and Public Health." World Health Organization, (2002).
[5] Moon, Suerie, "Powerful Ideas: The Global Politics of Pharmaceutical Monopoly." 44 Journal of Health Politics, Policy and Law 251 (2019).
[6] R. Raghavan, “India Grants First Compulsory License to Generic Drug Manufacturer.” 30 Nature Biotechnology 321 (2012).
[7] Dhar, Biswajit, and K.M. Gopakumar, “Compulsory Licensing in India: The Bayer- Natco Case.” 18 The Journal of Intellectual Property Rights 132 (2013).
[8] Heywood, Mark, “South Africa’s Treatment Action Campaign: Combining Law and Social Mobilization to Realize The Right to Health.” 1 Journal of Human Rights Practice 14 (2009).
[9] Flynn, Matthew, "Brazilian Pharmaceutical Diplomacy: Social Democratic Principles versus Soft Power Interests." 43 International Journal of Health Services 67 (2013).
[10] Kumar, Anil, "India as the Pharmacy of the World: The Challenges and Opportunities," 77 Indian Journal of Pharmaceutical Sciences 275 (2015).
[11] Sell, Susan K., "TRIPS and the Access to Medicines Campaign." 20 Wisconsin International Law Journal 481 (2002).
[12] Bayer Corporation v. Union of India, (2012) IPD 103.
[13] Universal Declaration of Human Rights, G.A. Res. 217 A (III), U.N. Doc. A/810 at 71 (1948).
About the author
Aparna Srivastava is a 3rd Year Law Student at Lloyd Law College.