In the international financing of global health, the cost of medicine itself - the drugs used to treat or cure diseases - can be overwhelming, particularly for a country with higher rates of infection. Epidemics of drug-resistant tuberculosis or HIV are not simple to treat; patients must follow strict drug regimes, and the treatments themselves are much more expensive than comporable treatments for other widespread diseases, such as cholera. Even setting aside access to medical attention, a national health service’s access to drugs may be a significant limiting factor in its ability to treat a national epidemic.
Governments’ efforts to cut costs and provide low-cost treatment to citizens have led many lesser-developed countries to rely on generic versions of the brand-name drugs developed by large western pharmaceutical companies. These generic drugs are typically cheaper and easier to access and distribute than the brand-name versions produced in the west. Their use also tends to violate international patent and copyright law - all drugs developed by western pharmaceutical companies are patented, and reverse-engineering and marketing a drug as one’s own flies in the face of the host of treaties and conventions that generally form “international intellectual property law” (for more information on how exactly the IP regime functions, see the US Patent and Copyright office).
One of the most important mechanisms for enforcing intellectual property law on the international stage is the World Trade Organization, which instituted a set of agreements known as Trade-Related Aspects of Intellectual Property (TRIPS) at the Urugay round of negotiations in 1995. Membership in the WTO is contingent upon compliance with the TRIPS accords (among many others), and thus participating in the WTO (and reaping the benefits thereof) requires countries to respect patent law - which originally precluded the use of generic drugs in combatting disease. This quickly provoked controversy within the WTO, as lesser-developed countries criticized TRIPS as both sabotaging their own efforts to combat infections disease and further increasing resource outflows from the developing world into the developed world. Pharmaceutical companies, on the other side of the debate, have argued that without intellectual propery law, the incentive to produce new drugs - a very costly process - is entirely lost, as companies are unable to recoup the significant expenses incurred during the research and development process.
As of now the TRIPS accord, and the strict legality of using generic drugs versus paying top-dollar for brand-name versions, remains in limbo. Debate continues in the WTO (see this Congressional report for a good summary of arguments), pharmaceutical companies continue to lobby in western capitals and the developing world continues to struggle to address infectious disease. This post only scratches the surface of the relative motivations driving different actors, but finance once again underlays the entire process.
Nice blog post! The point you addressed about pharmaceutical companies being opposed to removing intellectual property laws is an interesting one. I am curious whether you think there are other ways to create incentives for big pharma to invest in and allocate drugs to the developing countries. Do you think intellectual property laws are the only way to ensure that pharmaceutical companies will be paid back for their tremendous investments? Or are there other means to address the problem of big pharma focusing their efforts solely for the benefit of developed, wealthy nations? I look forward to reading more!
Thanks for the post. This was an issue I was completely unaware of before. Finding a solution to the problem of intellectual property laws and ensuring cheap and efficient access to drugs in developing parts of the world will be difficult. My thinking is maybe these generic drug companies could pay a certain amount of money to the Western drug companies that invested lots of research and development into the drug. It is unfair that these Western drug companies are having their drugs copied and they’re not receiving any monetary reward for their hard work. Same time, important to get the drugs cheaply to those who need them most (and makes sense to have these pharmaceutical companies right there in the country that needs them). Really interesting topic here. Love to hear more.