Patents are one of the key mechanisms of intellectual property protection. The patent system was developed in the 19th century to incentivise innovation by granting the patent holder a temporary monopoly in exchange for publication of the invention. Learn more about patents here.
Patent laws are regulated on national, regional and international levels. Every country has its own patent law and national patent offices to assess patent applications and grant monopolies. Regions often work together in regional patent offices [e.g. European Patent Office, African Intellectual Property Organisation, Patent Office of the Cooperation Council for the Arab States of the Gulf].
In 1995 the members of the World Trade Organization harmonised patent laws on an international level with the signing of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), making it easier for patent holders to enforce their patents globally. Rich countries with strong pharmaceutical companies have been strong supporters; countries with generic industries have been resisting the introduction of patents for pharmaceuticals. Only the least developed countries have an exemption from applying the provisions of the TRIPS Agreement.
Pharmaceutical companies benefit from patents as they allow them to protect their investments in high-risk drug research and development (R&D) and recover costs spent discovering, developing and marketing new drugs. The business model of pharmaceutical companies is based on patents as it allows them to create monopolies and raise prices for their medicines to whatever the market can bear. Please read about the Gilead sofosbuvir example.
However, patents have negative side-effects regarding access to medicine. The monopoly created by a patent gives patent holders complete control over the price of pharmaceuticals in the market, allowing them to charge excessively high prices and abuse patents at the expense of public health. The patent system has also failed to deliver new medicines in low-income countries for instance neglected tropical diseases (CDC), diseases of poverty, or where there are few patients and thus less economic incentive also know as rare diseases.
In principle, after a patent expires prices of medicines should drop as generic companies are able to begin producing affordable versions. In reality, pharmaceutical companies are masters in prolonging (“evergreening”) their monopolies through second use patents, Supplementary Protection Certificates (SPC) and data exclusivity.
The patent system can also be misused: to remedy this, the patent can be challenged in court. However, pharmaceutical companies sometimes request large numbers of patents (a patent ‘thicket’) for their blockbuster, so that generic companies get discouraged challenging them, think about the Humira example by I-MAK. To avoid the legal battles, generic companies often sign agreements that give them access in one market but delays entry in another market. Again the Humira case is a good example EU vs USA.
The unintended consequence of the patent system is that high-income countries pay increasingly high prices for new medicines. There is low incentive for pharmaceutical companies to develop medicines for rare diseases (see Market Failure) or medicines that need to be restricted such as antibiotic development failure.
What is FTV/PAF doing about this topic?
FTV/PAF is following cases where companies are evergreening their products.
If pharma companies are misusing patents, or not making the medicine available the government or courts can issue a government use or Compulsory License.
|If companies are making misuse of their economic power, there is also Competition Law|
The 3 best briefing documents for quick readers:
Who is working on the issue (link to partner websites)