“The defense of intellectual property rights today is the new frontier as were the human rights yesterday. An effective intellectual property system is indispensable to technological development which leads to economic growth and social welfare. Of the four incentives provided by a patent system, namely, to invent, to disclose, to invest and to “invent around”, the incentive to invest is the most important.

A patent and other intellectual property are property and are not and cannot be monopolies (a patent does not take from the public and give to the individual; on the contrary, it takes from the individual and gives to the public) and this misconception has caused a lot of mischief. Subject matter that is viewed as too important to be protected (e.g. pharmaceuticals) is, on the contrary, too important not to be protected.”

Prof. Thomas Field

Intellectual property rights are a compromise between the incentive to create knowledge and the desirability of disseminating knowledge at little or no cost. While the debate deals with positive and negative implications, there is no systematic empirical evidence for either concerns that intellectual property rights would slow innovation or for their alleged positive impact on research and development. Intellectual property rights can disadvantage developing countries in two ways, namely by increasing the knowledge gap and by shifting the bargaining power towards the producers of knowledge, most of whom reside in developed, industrial countries. Effects on distribution might be particularly strong with respect to the effects of patents on the price of medicines, due to the weak bargaining power of developing countries in negotiating prices with monopoly suppliers (World Bank ‘98).

The quotes above are an example of the conflicting views expressed on the topic of TRIPs and its impact on access to drugs and on the pharmaceutical industry.

National pharmaceutical industries in developing countries are concerned about trends to focus R&D efforts exclusively on problems for which lucrative markets exists, such as impotence, obesity, jet-lag and baldness, rather than on widespread, serious tropical diseases. It is also worth noting that most industrialized countries, while having a patent system in place since a long time, introduced product patents for drugs only relatively recently (see box 5); that is, after their pharmaceutical companies had attained a very high degree of development.

Source: World Bank, 1990.

Noting the above and other concerns, the implications of TRIPs Agreement on the national pharmaceutical industry might be:

• When markets are small, there will be no interest to invest in technology transfer.

• Several case studies indicate that there is little evidence that the introduction of TRIPs compliant standards of IPR would stimulate transfer of technology, encourage foreign direct investment, strengthen research, development and innovation and ensure early introduction of new products.

• The introduction of new products by national industries will be delayed.

• New medicines will be more expensive.

• This may create an impression of denying people the right to new drugs.

• The gap between local and multinational companies will widen.

• There will be a shift in market share from generics to branded/originator products.

The national pharmaceutical industries therefore believe that Governments should introduce appropriate policies to alleviate possible negative implications, such as those listed above, of the introduction of TRIPs standards.