License to Kill

WHY IT IS IMPORTANT    WHO threatens patents and intellectual property, risking to discourage innovation. Compulsory licenses allow the State to override intellectual property rights to manufacture patented medicines without the patent-owner’s consent at a more competitive cost, making them available to a larger number of citizens.

GOOD-HEARTED  The concern with improving access to medicines is laudable.

WRONG SOLUTION    However, compulsory licenses  do not help to reduce price nor facilitate access to treatment. Unfortunately, they do certainly slow down innovation. Patents are not the cause of a challenging access to drugs.

The real reasons for this have been well known for decades:

  • Insufficient number of workers in the health sector – According to WHO, there is a shortage of around 7.2 million health personnel, which will rise to almost 13 million over the next 15 years;
  • Poorly developed insurance systems (both public and private). In Germany health costs are covered for more than 87% by insurance companies. In India, 86% of the money spent on healthcare is paid directly by households;
  • Weak infrastructures and inefficient supply chains;
  • Import tariffs add to the cost of medicines.

WRONG INSTITUTIONS    The introduction of compulsory licenses is dictated by emotions in the absence of clear answers and perfect solutions.

Compulsory licenses should be contemplated only in case of serious health emergencies that require the retrieval of important quantities of drugs in short amount of time.

WIDE INNOVATION    The introduction of compulsory licenses will affect patents, discouraging R & D investment. Without innovation there would not be any new treatment.

Protection of intellectual property is necessary to promote innovation. If pharmaceutical MNEs  would easily migrate to other markets – more favorable to innovation and R&D – SMEs would be simply forced to close.

Overriding a patent does not magically provide the essential know-how necessary to develop an equally effective drug.

Ninety percent of essential drugs (WHO data) are not protected by patents.

A drug represents the final product of years of scientific research, not a speculative medium. Its development requires copious investments, both at the financial and human capital level.

Compulsory licenses should only be considered for exceptional cases of national health emergency. They certainly can not be the fulcrum of a country’s health policy that aims to promote innovation. In order to support development, patent and intellectual property protection should be an utmost priority.

More investment in research would lead to better drugs and healthier citizens. Let’s learn from the mistakes made by South American populism.

La credibilità è la nostra forza. La nostra visione al vostro servizio.

Pietro Paganini
Presidente, Competere
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