WHO deliberations unlikely to be beneficial to drug patent holders
The world health body failing to realise that exclusive rights to new drugs incentivise industry’s innovation
The World Health Organisation (WHO) is holding its annual executive board meeting in Geneva this week. The meeting sets the agenda and proposed resolutions for its world health assembly in May, when health ministers gather to debate global health issues and set future policies.
One of the many action items on the agenda is to “foster innovation and access to health products by appropriate intellectual property rules and management”. It is unlikely that we will see innovative thinking from a board that continues to presume patents are a major barrier to access to medicines, and thus a major obstacle to health and development.
The WHO does important and much-needed work tackling preventable and communicable diseases, particularly those that are transnational. But it also devotes millions of dollars towards controversial issues such as obesity and intellectual property rights that really should be dealt with by sovereign governments and individuals.
Perhaps captured by political interests, rather than public health interests, it has continued to rail against pharmaceutical companies that rely on drug patents to recoup costs and earn a return on their investments into the latest medical discoveries.
In SA we have become all too accustomed to the mantra that when the WHO “recommends” actions, member states are obliged to follow through.
A document on the WHO board’s agenda states that one deliverable is the “promotion of public health-orientated licensing agreements”. In simple terms, the WHO, along with other international organisations, is advocating that sovereign nations should weaken their intellectual property rights protections because they presume that patents are a major barrier to access to medicines.
In SA we have become all too accustomed to the mantra that when the WHO “recommends” actions, member states are obliged to follow through. Indeed, the SA government’s draft intellectual property policy document calls for a “workable” compulsory licensing system and a non-judicial mechanism for awarding such licences.
Compulsory licences allow the government to “break” a patent and give a licence to a local manufacturer — or perhaps, in SA’s case, the proposed state-owned manufacturer, Ketlaphela — to produce a drug.
However, it must be noted that the WHO and other “international organisations” working in intellectual property comprise unelected and unaccountable bureaucrats who cannot dictate to sovereign nations matters of policy.
Instead of undermining the policy that has created the incentives to bring innovative products to market, the WHO should shift its focus back to its core competency and strengths, namely helping countries control and prevent the spread of illnesses, as it did during the Ebola outbreak.
According to the World Intellectual Property Organisation (Wipo), “intellectual property rights are like any other property right”. They allow creators or owners of patents, trademarks or copyrighted works, to benefit from their own work or investment in a creation.
These rights are outlined in Article 27 of the universal declaration of human rights, which provides for “the right to benefit from the protection of moral and material interests resulting from authorship of scientific, literary or artistic productions”.
There are several compelling reasons to promote and protect intellectual property. Chiefly, without the incentives to bring to market new, innovative products that we know help people live longer, healthier and happier lives across the globe, innovators simply will not create. Certainly, they will not invest in commercialising and bringing products to market if they can be freely expropriated and copied.
For SA to move up the value chain from a predominantly resource-based economy to one based on knowledge and innovation, the promotion and protection of intellectual property rights is of critical importance.
Without new investment, SA’s economic growth will continue to languish and no new jobs and industries will be created. In short, the recent gains in quality of life South Africans have enjoyed are at risk of being eroded and could reverse.
The public ought to be focusing its attention on the real barriers that hamper access to medicines, and pressuring governments to improve regulatory environments. For example, in SA, bureaucratic bungling and an inefficient drug registration system unnecessarily delay the entry of drugs (both generic and original) into the local market, sometimes by up to five years.
Drug prices set by the government pricing committees that are fixed for protracted periods fail to accommodate subtle nuances in the market that include, but are not limited to, a wildly fluctuating local currency. The government also continues to charge value-added tax on pharmaceutical drugs even though taxing the sickest and most vulnerable members of society is clearly counterintuitive.
These are some, but certainly not all, of the obstacles that result in shortages and hamper access to medicines in SA. If enough pressure is exerted by the public and through the media, these government-created obstacles could be removed with one stroke of the statutory pen.
• Urbach is an economist and a director at the Free Market Foundation, where he heads the health policy unit.