Last week, I argued against “Big Pharma” and its use of patents to abuse the TRIPS agreement and prevent developing countries access to essential medicines. The example I used was how President Mandela tried to exercise South Africa’s TRIPS flexibilities, but was denied access to generics of desperately needed ARVs by pharmaceutical companies all around the world. Due to the great and challenging comments by my peers to my last blog post, I would like to spend this week’s post responding to some of the questions and issues posed.
Many of the comments posted were concerned with the issue of protecting pharmaceutical companies and the money they need to invest in new research and produce better medicines. Certainly, if the profits of the pharmaceutical companies are undermined, then we would not be making headway into newer and more efficient drugs. The reason why the United States leads the way in developing advanced drugs and technologies despite its horrible healthcare system is because of the market-driven economy. It would seem, at least initially, that allowing countries to exercise their TRIPS flexibilities would undermine this market and the incentives to research better drugs.
However, we must not apply this mindset to all cases. The problem with a market-driven pharmaceutical system is that the vast majority of efforts are directed toward developed countries with money. In 2008, 96% of research and development was done by high-income countries. That means a disproportionately large amount of research is being poured into chronic diseases, and the production and pricing of drugs are based upon the economic status of developing countries leaving developing countries like South Africa in the dust. The development of more efficient treatments to infectious diseases that are much more prevalent in developing countries is being largely ignored. In other words, protecting the interest of the pharmaceutical companies really has no benefit to developing countries either in the short or long haul. There seems to be a serious justice issue here. I agree that TRIPS flexibilities should not be abused by countries because that would make patents and trade rights completely meaningless. But in Sub-Saharan Africa’s case, the HIV/AIDS epidemic is a serious global emergency, and to disallow the use of generic ARVs in those circumstances is grossly wrong.
Furthermore, I would like to argue that pharmaceutical companies really do not have much to lose by allowing developing countries like South Africa access to generic medications. According to market share statistics, only about 1.2% of market shares for pharmaceutical companies come from Sub-Saharan Africa. A huge 86.9% of the shares are from Europe and North America. That means that even if pharmaceutical companies allowed all the countries in Sub-Saharan Africa to produce their own generic drugs, pharmaceutical companies would only be losing out on a tiny percent of their profits. Their main source of profit from Europe and North America would continue. Thus, the argument of protecting pharmaceutical company profits in a completely market-based system is not only unjust toward developing countries as mentioned earlier, it is also rather unreasonable considering the huge loss of human life that is occurring to protect a measly 1.2% of market shares.
Sources:
Baker, Brook. “Drug Company Economics and the R&D Excuse.” American Medical Student Association. <www.amsa.org/global/aids/WAD_EssentialMeds.ppt>
I didn’t realize that sales from Sub-Saharan Africa made up that small of a percentage of market shares. Do you know if there are certain companies that hold a majority of this percentage? Either way, it definitely adds a new dimension to my understanding of the pharmaceutical debate. If protecting big pharmaceuticals doesn’t help developing countries, how much will it hurt to not protect? And if protecting pharmaceuticals doesn’t benefit developing countries in the short or long term, what will?
First off, I don’t disagree with your post, but I wouldn’t call South Africa a developing country. They have a good economy and an incredibly huge gap between the rich and the poor - sound just like the U.S. (well, relatively- no one really has a good economy right now and RSA does have a larger gap than the U.S.)! They’re pretty much the stability anchor for all Africa.
Also, by your logic (a slippery slope), isn’t the whole point of making drugs and then charging people lots of money for them wrong? I’m not saying it isn’t wrong, but what kind of criteria are you using to determine the good in patents and property rights vs. people who die of diseases that could have been prevented by someone who didn’t want to give them their drugs?