By de Mello e Souza, André; Bale, Harvey E.
Americas Quarterly , Vol. 2, No. 3
Patents Price Medicines Out of Reach of the Poor
Globalization of IPR has reduced availability of generics as well.
Both logic and empirical evidence suggest that patent protection prevents access to medicines in developing countries. Patents are by definition monopolies and, as such, increase prices, other things being equal. Abundant data demonstrate that generic producers dramatically lower the cost of drugs, because they operate with lower profit margins and promote competition.
Accordingly, in Brazil the substitution of patented imported antiretrovirals (ARVs) used to treat AIDS with locally produced generic equivalents caused their price to fall 80.9 percent on average. This was possible only before the country began to grant patent protection for pharmaceutical products. However, after such protection began to be offered in 1997, the cost of ARV therapies in Brazil escalated, threatening the sustainability of the government's AIDS treatment program and the survival of over 160,000 patients. Since then, the affordability of these therapies has depended on the capacity of the health ministry to make credible threats of issuing compulsory licenses for ARVs, thereby forcing the patent holders to considerably discount these drugs. In addition, local generic ARV production has relied on the importation of active ingredients from India and China. As both countries concede patent protection for new ARVs in compliance with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), these ingredients may no longer be available.
The globalization of intellectual property rights promoted by TRIPS has also undermined efforts by other developing countries to gain access to cheap, generic ARVs. Research conducted by Oxfam tracking the price of patented ARVs in Uganda from May 2000 to April 2002 showed that such prices fell as much as 97 percent after the country started to import generics from India. As a result, at one treatment center alone, the number of patients taking these medicines increased by 200 percent within a year.1 Unfortunately, like Brazil, Uganda will face difficulties in financing anti-AIDS therapies after changes in the Indian Patents Act begin to take effect.
Some interested parties claim that the lack of access to medicines in the developing world is caused by poverty and insufficient health care spending rather than the high cost of medicine. Studies conducted by Amir Attaran and Lee Gillespie-White, the Pharmaceutical Research and Manufacturers of America (PhRMA) and the pharmaceutical multinational Merck, show that many of the anti-AIDS cocktails are not subject to patents in most African countries-with the notable exception of South Africa- and could thus be readily used by these countries. The studies also point out that lower prices in ARV medicines have not by themselves led to substantial increases in treatment opportunities in Africa.2
There are at least two major fallacies in these studies. First, as several NnGOs have countered, patents for anti-AIDS medicines are correlated with purchasing power and the size of HIV-infected populations. 3 In order to correctly assess the impact of patents on access to medicines, the market sizes of different countries must be taken into account. Lumping South Africa in with other less populous and poorer countries, plus the greater demand for ARVs in South Africa, obscures the adverse effects of patents on access to medicines under conditions of less affluent countries. Therefore, these effects have been considerably underestimated by the above-mentioned studies.
Second, evidence shows even medicines not protected by patents remain unavailable in African countries; patents cannot be considered a major barrier to treatment. But the effects of patent protection on the costs of (and access to) medicines often-times transcend national borders. South Africa, which exports patented ARVs to the rest of the continent, is a case in point. …