19 June 2015
The effects of patenting pharmaceutical products on access to medicines in developing countries are relatively recent as these countries have only been mandated by the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) rules to grant patents on pharmaceuticals since 2005. As a result there are a limited number of empirical studies documenting these effects.
However, patents grant the patent holder a monopoly on the market that allows the blocking of price-lowering generic competition and the raising of prices which restricts affordable access to medicines. Where patent and other intellectual property (IP) barriers do not exist, generic competition has proven to lower prices of medicines. The attached memo provides numerous examples where intellectual property rules stronger than those required by TRIPS have raised the cost of medicines.
For example, the US Food and Drug Administration reports that “on average, the cost of a generic drug is 80 to 85 percent lower than the brand name product.”[i] The experience of HIV medicines prices illustrates this. When first-line antiretroviral medicines were first introduced in developing countries, they were priced out of reach of millions at more than US $10,000 per patient, per year. Following the introduction of generic versions, prices fell dramatically. Today prices for first line regimens in developing countries are 99 percent lower – as low as $100 per person, per year.[ii]
Evidence documenting the effect of TRIPS and patenting of pharmaceuticals on promoting innovation is similarly lacking, however some reports have already documented the lack of impact patents have in promoting innovation targeting the specific needs of patients in developing countries.[iii]
Implementation of stricter IP obligations (referred to as TRIPS-plus) is even more recent for many countries, but increasingly these additional or expanded provisions that go beyond what is required by the TRIPS agreement and which limit TRIPS flexibilities have been pushed for or implemented in developing countries through trade agreements and other tools. These include patent term extensions, patent linkage, data exclusivity, lower patentability criteria and additional enforcement measures. Examples of TRIPS-plus provisions appearing in trade agreements include the Dominican Republic-Central America FTA (DR-CAFTA), the US-Jordan free trade agreement and the currently under negotiation Trans-Pacific Partnership Agreement (TPP) between 12 Pacific-Rim countries, including several developing countries.
The effects of TRIPS-plus provisions on access to affordable medicines and pricing are not yet well documented, particularly in developing countries. However, a review of existing literature indicates that a number of studies, reports and statements, have in fact documented, assessed and/or projected the effects of TRIPS-plus provisions on access to medicines, including at least 28 resources. Several of these are from countries like the US that have had a longer experience in the implementation of TRIPS-plus provisions in their national law.
The attached memo compiles a preliminary and non-exhaustive collection of analyses, reports and statements made by international experts, academics, international organizations and other stakeholders that demonstrate or project the impact TRIPS-plus intellectual property (IP) obligations have had or could have on access to affordable medicines in any country. Resources were collected by requesting recommendations through listserves or from experts and stakeholders working on IP and access to medicines and through supplemental Google Scholar searches. Abstracts or excerpts were reviewed to determine the resources’ relevance to this memo.