Intellectual Property Rights and Big Pharma

Most of us are well aware of the fact that today, we live in the era of knowledge, where information is wealth. Research and Development has emerged as an important domain in society. The processes and products that are an outcome of research have the potential to bring returns to their inventors. This is applicable to life-saving technology as well. Research in the area of pharmaceuticals and medicines requires extensive funding that is provided by large pharma companies. The laws governing patenting at the international level look at the issue wholly from an economic perspective, giving raise to ethical dilemmas concerning human lives. The major question that arises is, should intellectual property rights be prioritised over saving lives? This article is an attempt to bring out the ethical and legal conflicts behind medical patents.

Medical patenting– An overview of the Indian experience

A medical patent is a right of exclusivity for the production and sale of medical products, process and techniques given to its developers and creators, to prevent competitors from producing and selling the patented item, throughout the course of the stipulated time duration of the patent. Medical patents are essentially of two kinds – product patents and process patents. A product patent is issued for the particular product say a drug, while a process patent is given for a specific method of producing an item. It is possible to produce the same drug using a different method in case of a process patent but if it has a product patent then it cannot be produced using other methods as well.

The patenting laws in India have been quite liberal as compared to the developed world. The United States issues medical patents for a 20-year period including product patents, the more stringent kind. In India, until liberalisation, patents were regulated under the Patents Act of 1970, which granted only process patents for food, drugs and chemicals. Even today, they are issued only for a period of 7 years. Later with the signing of the Trade Related Intellectual Property Rights (TRIPS) Agreement in 1995, the Patents Act was amended to issue product patents as well, 1999 onwards. Over the years, India had to modify the provisions and the substance of the Patents Act to comply with the TRIPS Agreement.

Prior to these changes, the Indian Pharmaceutical Industry was a big relief for the global health care business as affordable generic versions of drugs were produced by it. Generic drugs were made available across the globe for life-threatening illnesses like tuberculosis, HIV-AIDS, cancer and so on. However, this was a big threat for European and American Pharma companies. A sea change in entire scenario has come about with the introduction of product patents in India post 2005. Though the movement against this has helped bring down the price of various life-saving drugs, the cost of health care especially for terminal illnesses like cancer remains high in India and elsewhere.

The economic (business) side of medical patenting

The economic arguments with regard to the patenting of pharmaceuticals are rooted on the aspects of justice and incentive. They are devised in ways that would counter the moral arguments against them. They tend to adopt a legal-economic approach for the justification of granting of intellectual property rights for life-saving drugs. Though they seem to capitalise on the lives of people, they do have some compelling arguments for why patenting might be necessary even for life saving drugs and procedures.

The first argument is based on the fundamental economic idea of fairness. In the free market economy, individuals who have spent their time, effort and resources into developing a product or a process should be given a fair chance for compensation. Following the words of Adam Smith, we can say that people would tend to focus on spending their resources based on their self-interest. Therefore, going by that logic, it only seems just and fair to give individuals a return for their time, effort and resources that have gone into developing the product or process.

Substantiating this argument, we can also say that it would also be unfair for the benefits to made available to all immediately. This would give others the chance to benefit from it and make gains as well without having to put in any effort from their side. Moreover, this would be inequitable for the developers because they would not be able to make up for their investment in the product. They would only be able to do so if they were provided the exclusive right to use and disseminate that knowledge for a while. However, as time passes, this knowledge would indubitably  become obsolete and would no longer need protection.

The second argument is intrinsically related to the first one and, in fact, can be derived from it. A basic economic principle dictates that people respond to incentives. Individual actions are induced and modified by incentives. The intellectual property rights and patents incentivise the process of research. It is essential for giving the researchers some exclusive rights with regard to their products for a period of time to make up for their investment and also gain a profit. When this incentive is removed, the motivation to engage in pharmaceutical research would gradually get diminished. Therefore, the society would be benefited at large when developers are given some protection from free riders initially.

It also becomes important to understand the nature of medical research with regard to this argument. Pharmaceutical and medical research requires a lot funding which may not be available at the disposal of the researchers themselves. It often turns out that they are funded by big pharmaceutical companies that operate more or less like business houses. All funding available to medical research may be highly curtailed when the patent rights are not available. As harsh as this might sound, this is bound to be the consequence of the free market.

The ethical angle of medical patenting

The ethical side to the argument is often ignored when it comes to the drafting of legislation with regard to intellectual property rights. These arguments are often rooted against the pharmaceutical industry that has been able to effectively lobby for their concerns at the policy level. The major concern here is that the language of the big pharmaceutical companies is not the same as the public. As mentioned earlier, legal economic approach is used for the justification of medical patents but the public critique it from the perspective of ethical arguments. This disconnect fosters the development of distrust.

The biggest argument from the side of critiques is the right to health care. The right to life forms the very foundation of all human rights. An extension to the right to life is the right to health care for the protection of life. Now, these rights derived from the Universal Declaration of Human Rights apply to everyone irrespective of the governments of their countries. The governments are responsible for ensuring the protection of these rights. They are obligated to provide the conditions for access to health care for the protection of life. However, the problem here is the government becomes a regulatory authority for the issue of patents.

The biggest moral question that arises is that how can the right to life be overridden by a patent granted based on economic considerations? From the public’s perspective, the legal dynamics of this would seem unfair and inhumane. But it arises purely from the linguistic gap between the general public and the pharma industry that may adhere to their social responsibility but not their ethical responsibility. The various intricacies of the ethical arguments regarding the obligation to help and the extent to which these companies have to bear the cost, may be more complicated than straightforward.

Reconciliation– Some possibilities

The communication gap between the public and the big pharmaceutical companies is converting this debate into one without a way out or a solution. There are too many legal and ethical dilemmas associated with the issue of medical patents and the ethics of the big pharma. The major hurdle that arises is because the legislation has been framed based on the economic arguments in favour of patents. In the free market enterprise that we live in today, it is an eventuality that we need to bear.

One possible tangible solution that can actually be applied to this problem is the restriction of product patents. This would open the scope for production of the same products using other methods. But the communication gap prevents much change in legislation given the amount of power that these pharma lobbies hold. A constructive change or solution may have a long way to go because answers for many of these questions are not straightforward. However, the first step can begin by recognising that patents are not absolute and are subservient to mankind because they wouldn’t have existed if not for mankind itself.

Picture Courtesy- Financial Times

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