Monopolies: State And Corporate Interests Surrounding Access To Medicines

Amongst the many issues faced by developing countries to ensure access to medicines, cost is a primary one. Proposals to tackle it include limiting the price and regulating competitive conditions. Monopolies created by patents are seen by many as an impediment to accessing basic healthcare. Meanwhile, countries have realised that imposing stringent criteria for granting patents and taking a long duration to process them could be detrimental to them as much as resisting the regime.

This issue has arisen in a variety of recent contexts, including at the latest World Health Assembly and in an IP-Watch Inside Views piece (IPW, Patents/Design/Trade Secrets, 18 May 2018).

The debate was rekindled at a 25 May event during the 71st World Health Assembly on “Access to Medicines: Overcoming Obstacles created by monopolies – Essential to UHC and the 2030 Agenda.” The event brought together speakers from Brazil, India, Senegal, Morocco, Thailand, and an appearance by Dr Tedros Adhanom Ghebreyesus (Dr Tedros), director general of the WHO.

Carlos Correa, executive director elect of the South Centre, opened the discussion of monopoly being an obstacle to affordable medicines as it drives the prices up. Setting the price according to market rates does not work for medicines due to the inelasticity of demand, he explained. People who can afford it or those insured can pay what the pharmaceutical company deems fit while others continue to suffer despite the existence of a cure.

Dr Tedros, in his brief address, referred to turning a blind eye to such suffering as ‘moral decay’ of the society.

Echoing those sentiments, Brazilian Ambassador ‎Maria Azevêdo termed access to medicines a human rights issue touching upon the right to life and the right to health. As she pointed out, public health is now a political issue where governments ‘have to deliver.’

It emerged from the discussion that this issue is one where everyone has something at stake, and the skyrocketing prices of medicines have brought the global North and South together. Even developed countries are concerned about rising drug prices and ensuring their citizens have access to affordable medicines, as echoed by the speakers.

Some of the solutions suggested at the event included price control as a market access criterion and local production, which was emphasised by Senegal and Morocco.

India has been successful in using flexibilities to patent protection under the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). But it has been placed on the priority watch list by the US Trade Representative’s office, subjecting Indian government measures and generic industry to additional scrutiny and pressure (IPW, Patents/Design/Trade Secret, 15 February 2018).

During the event, emphasis was laid on the fact that in developing countries medicine is an out of pocket expense for many. This has led to the debate over what is fair and affordable drug pricing. A fairly priced drug could still remain out of the reach for many, as Dr Tedros pointed out. He further remarked that medicine on the shelf has no value. In response, the industry attributes research and development costs and the limited period of patent protection as the reasons for high costs. As participants raised questions, transparency regulations over research and development costs are yet to emerge due to resistance from the industry. Dr Tedros maintained that engagement with the industry and associations remains crucial.

Access Issue, Multiple Factors, Industry Says

Thomas Cueni, director general of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), in a recent interview with Health Policy Watch (HPW, Global Health in Geneva, 23 May 2018), shed light on how inefficient supply chains and overhead increase costs significantly, hinting that efforts to achieve price reduction could begin elsewhere. The industry has underlined other factors leading to access issues, such as lack of infrastructure and trained health personnel.

Even if laws and guidelines for R&D transparency are developed, the question remains as to how one decides what is a reasonable profit margin a company ought to have.

Additionally, such regulations are not easily negotiable as a government’s competence is limited to its territory and UN agencies have overlapping competence in the areas of IP and public health. Industry and civil society stakeholder’s perspectives also need to be taken into account. Amb. Rajiv Chander of India highlighted this policy incoherence between various stakeholders at the event.

Observing the paradigm shift from developed states and their industry lobbies versus the global South, to the current frame of state interests against corporate profits leads one to examine the uniting and dividing factors. While transparency and capping profits is a bone of contention between states and companies, they do agree on one thing: counterfeits. States see it as a health risk to their citizens and the companies see passing off as a dent to their reputation and profits. This could be a starting point to foster closer cooperation between the two sides.

 

Image Credits: Times of India