Patented medicines are priced far above marginal cost and patent holders are rewarded for research and development (R&D) with grants of exclusive commercial rights (primarily patents, copyrights and trademarks) so that intellectual property laws allow the “investor” to regain some of the benefits of their research and innovation. Fixed-dose combination drugs have the potential to involve multiple patents held by different parties. The transaction costs associated with bargaining over property rights for components of the FDC can arguably lead to both blocking of commercial development and, if already manufactured, to lack of access “on the ground”.
There are various ways to overcome or ameliorate the negative effects of IPRs on access to FDCs. Some unilateral mechanisms include:
• Put the ‘invention’ (e.g., fixed-dosage combinations) into the public domain and avoid IP/patent rights entirely or try to “design around” existing IP for FDCs.
• Make patents harder to get so that only real advances in medicines will be patented.
• Create exceptions to patent infringement so that various entities are spared the transaction costs of licensing or, more particularly, patent litigation.
• Use voluntary and, if needed, compulsory licensing between patent owners.
Other mechanisms include the creation of multilateral, collective business models for R&D and transacting IPRs. These might include the creation of voluntary or government-mandated patent pools. Another possibility, not yet well thought-out, would be to develop various IP information and transactional “clearinghouses” specifically for IP related to fixed-dose combination drugs. Such a clearinghouse should be able to identify all relevant IPRs over a given (i.e., FDC) technology and, indicate which are and which are not available to be negotiated, and if they are, how they can be accessed. It should create a pricing scheme and terms of contract and a royalty disbursement accounting system.
Multiple components of FDCs can lead to complex issues of IPR access and implicates other factors such as R&D funding mechanisms and global IP rules. Creative approaches to the problem are required. For developing countries, IP-resource poor inventors, NGOs, and patients, ways are needed to reduce IPR transaction costs with regard to fixed-dose combination drugs.