Jean O. Lanjouw February, 2003 The Global Patent System and the Availability of Pharmaceuticals in Poor Countries

There is widespread disagreement about the international framework for patent rights (TRIPS) as it applies to pharmaceuticals. What global patent system would best promote welfare? What system could end the fighting?

Patents embody a tradeoff between two public health goals: access to existing products & the creation of new ones

There are two extremely different and identifiable types of drug markets Some diseases are specific, with almost their entire market in the developing world (Malaria). Many others are global. They are important worldwide, and their therapies have global markets (Cancer).

Developing country-specific products The policy problem is to increase research effort. Cannot have access without products. To this end there are good arguments for private sector involvement a role for patents in poor countries.

This is 4 times the loss due to Malaria Cancer, heart disease and diabetes together cause 16% of the total disease burden in poorer countries. Global disease products

However, poor countries hardly figure in the worldwide market for global products Poor countries with 46% of the world’s population represent less than 2% of spending on cardiovascular drugs.

the optimal global system would treat innovations differently in accordance with their very different world markets. Because the benefits of extending protection to include poor countries differ for global & non-global products,

Problems with Current Process Uncertainty - Patents can do no Good Procedural knots limit entry in poorer markets Huge cost in time and effort Conflict over patents impedes coordination to resolve other problems

General Thoughts about a Lasting Solution Required characteristics: Clarity Fairness Lack of firm discretion

A Specific Proposal Very structured, and in such a way that protection evolves as a country develops and with changes in disease incidence. Protects markets as they become important to firms. Everything happens automatically

A Specific Proposal Implemented through rich country legislation Essentially, rich country patentees promise not to enforce patents according to structure just described. Inventors in poor countries have full protection, supporting development of their R&D capacity.

For Details See:

Not a solution but nonetheless useful firm effort: Voluntary Differential Licensing Pharmacia (soon Pfizer) Zero royalty on selected drug in set of countries. NGO as intermediary for quality control. Described in the most recent version of the journal Lancet