Global pharmaceutical challenges
At the beginning of the 21st century, too many people still lack access to essential drugs. WHO estimates that more than one third of world’s population lacks regular access to the medicines they need. In developing countries, 10.3 million children under five years of age died last year; 8.6 million of these deaths could have been prevented if those at risk would have had access to essential drugs. Today, in 32 countries, more than half the population lacks regular access to basic, essential drugs. The reasons for this are multiple and complex, and include the following factors:
• Public spending for healthcare in general and for drugs in particular is insufficient, and decreasing.
• Health insurance is non-existent or has very limited coverage; most people, especially in developing countries, have to pay for drugs out-of-pocket.
• New essential drugs are costly.
• Supply systems are often unreliable and poorly managed, leading to wastage and shortages.
Ensuring access to essential drugs depends on several factors, such as rational selection of the drugs allowed on the market, affordable prices, sufficient and sustainable financing for drugs and a reliable health care and drug supply system. Price is only one of the factors in ensuring access to essential medicines; however, especially for countries and populations with limited resources, it is an important factor. One of the most effective strategies for promoting affordable prices is to increase competition (see figure 2). Previously, many developing countries did not, or only to a limited extend, grant patents for pharmaceutical products, in order to encourage (generic) competition. The TRIPs Agreement makes the granting of patents for pharmaceutical products and process inventions obligatory, for a mini mum period of 20 years. For most developing countries, these new standards represent a considerable increase in the protection granted for pharmaceuticals. They fear therefore an increase in prices of medicines, and a further reduction in their population’s already limited access.
Figure 2 Effect of competition on HIV/AIDS drug prices
Adapted from: UNAIDS, B. Samb, 2000
However, the TRIPs Agreement contains a number of safeguards, which may be used to protect public health and promote competition, such as compulsory licensing and exceptions which facilitate the marketing of generic drugs (“Bolar exception”). These safeguards can be used to mitigate the potential negative impact of the TRIPs Agreement on access to drugs. However, in order to use these safeguards, countries have to incorporate them in their national legislation.
WHO policy perspective:
In the context of globalization and access to medicines, WHO insists that access to essential drugs is a human right and that medicines are not simple commodities.
WHO recognizes that patents on pharmaceuticals will stimulate R&D of new drugs, but also ‘notices that research priorities tend to respond to (economic) demand, rather than to medical need. Therefore, WHO recommends that:
• Patents on pharmaceuticals should be managed in an impartial way, protecting the interest of the patent holder as well as safeguarding public health.
• Public investment is needed to ensure development of new drugs.
• Support should be given to any measures which will improve access to all essential drugs, including mechanisms to promote competition, such as providing comparative price information, promoting generic policies, reducing duties, taxes and mark-ups, allowing parallel imports, equity pricing4 of newer essential drugs and making use of the TRIPs safeguards.
4 Equity pricing refers to a pricing system under which the poor do not have to pay the same price as those who are better off.