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BALANCING INNOVATION AND ACCESS: THE ROLE OF INTELLECTUAL PROPERTY RIGHTS IN THE PHARMACEUTICAL INDUSTRY

INTRODUCTION

The pharmaceutical industry plays an essential role in the development and delivery of life-saving drugs and innovative medical treatments. The concept of intellectual property rights serves as a legal framework for protecting valuable intellectual innovation and creations in the field of pharmaceuticals. Intellectual property rights encompass the range of legal protection granting exclusive rights to any individual or organization over their intellectual creations.

In the context of the pharmaceutical industry, IPRs primarily include patents, copyrights, trademarks, and trade secrets. These protections encourage and reward innovation by providing inventors, pharmaceutical companies, and researchers with a temporary monopoly over their creations, enabling them to recoup their investments and earn profits. Through this blog, you will get an idea about the delicate interplay between access and innovation, highlighting the crucial role of IPRs in the pharmaceutical industry.

SIGNIFICANCE OF IPRS IN FOSTERING INNOVATION AND DRUG DEVELOPMENT

IPR incentivizes pharmaceutical companies to invest in research and development activities. The cost associated with discovering and developing new drugs is enormous, often taking years of extensive research, clinical trials, and regulatory approvals. By granting these exclusive rights, IPRs ensure that inventors can recoup[1] all their investments and generate profit by incentivizing them to undertake costly R&D endeavours.  IPRs, such as patents, require inventors to disclose detailed information about their inventions.

Disclosure of information promotes knowledge sharing and contributes to the overall advancement of the pharmaceutical field. When inventors disclose their discoveries through patents, other researchers and scientists can build upon that knowledge, leading to further innovation and advancements in drug development.

The pharmaceutical industry heavily relies on patents as a key form of IPR protection[2]. Patents grant these inventors exclusive rights to manufacture, use and sell their inventions for a specified year, typically 20 years. As a result, these companies have a monopoly over the new drug allowing them to set prices and generate revenue.

IPRs also facilitate collaboration and licensing agreements within the pharmaceutical industry. Pharmaceutical companies often enter into licensing agreements[3] with other companies to encourage sharing of knowledge and expertise and promote the development of new drug development processes, leading to faster advancements and improved patient outcomes.

IPR also contributes to safeguarding public health and safety. The rigorous patenting process ensures that the new drugs undergo scrutiny and testing to prove their efficacy and safety. IPR protection also protects the unauthorized production and distribution of counterfeit or substandard drugs, ensuring patients have access to genuine, high-quality medications.

IPRs, particularly patents, provide pharmaceutical companies with market exclusivity for their innovative drugs. During this period, companies can establish a competitive advantage and recover the substantial costs associated with the development. This financial incentive encourages continuous innovation and development of new, improved drugs.

PATENT PROTECTION AND ITS IMPACT ON DRUG ACCESS

Patent protection grants pharmaceutical companies exclusive rights to manufacture, use and sell their inventions for a specified period. Patent protection is essential in encouraging pharmaceutical companies and has a huge impact on drug access.

Patent protection can create significant barriers to accessing drugs, specifically when patented medications are priced at levels that make them unaffordable for certain populations. During the exclusivity period, the patent holder can set the price without direct competition. This high pricing can limit access to vital treatments, especially in lower-income countries or for individuals without adequate insurance coverage.

Patents can delay the entry of generic versions of drugs to the market[4]. Generic competition is quite essential for driving down prices and improving drug access. When patents protect a brand-name drug, generic manufacturers are legally prohibited from producing and selling cheaper alternatives until the patent expires. This delay in generic competition can keep drug prices artificially high and limit access to affordable versions of medications.

Patent protection varies across countries, leading to global disparities in drug access. Patented drugs are often more expensive in high-income countries, making them unaffordable for healthcare systems. Developing countries, where a significant portion of the global population resides, face challenges accessing patented drugs due to higher prices and limited healthcare resources.

INTERNATIONAL TRADE AGREEMENTS AND INTELLECTUAL PROPERTY RIGHTS

International agreements play a significant role in shaping and governing intellectual property rights, including those related to the pharmaceutical industry. All these agreements establish standards, rules, and obligations to which member countries must adhere, impacting the enforcement and protection of pharmaceutical IP rights. Here are some of the notable international agreements and their impact on pharmaceutical IP rights:

The TRIPS agreement, administered by WTO, sets a minimum IP protection and enforcement standard. It establishes rules related to patents, trademarks, trade secrets, copyrights, and other forms of IPs. TRIPS includes flexibilities, such as compulsory licensing, to address public health needs and ensure access to affordable medicines.

Adopted by the WTO in 2001, the Doha Declaration affirmed the right of member countries to protect public health and promote access to medicines for all. It clarified that TRIPS should not prevent the membered countries from taking measures to protect public health and emphasized the importance of promoting access to medicines, especially for developing countries facing public health crises, such as AIDS/HIV, tuberculosis, and malaria. The Doha Declaration reaffirmed the flexibilities within TRIPS, including the ability to issue compulsory licenses for pharmaceutical products.

COLLABORATIVE APPROACHES FOR INNOVATION AND ACCESS

Collaboration between pharmaceutical industries, governments, and NGOs is crucial for addressing access challenges in the pharmaceutical industry. Technology transfer initiatives facilitate the transfer of manufacturing capabilities and intellectual property to enable local production of affordable generic medicines. By fostering collaboration and sharing resources, collaborative approaches have the potential to drive innovation and ensure essential medicines, especially in low-income countries and underserved populations.

CONCLUSION

Balancing innovation and access in the pharmaceutical industry requires careful consideration of the role of intellectual property rights. By implementing a collaborative approach, stakeholders can work together to overcome drug access challenges. To achieve a harmonious balance between innovation and access, ongoing dialogue, effective utilization, and cooperation of IPRs are necessary. It will help create a future where groundbreaking pharmaceutical innovations are accessible and affordable to all global health and well-being.

Author(s) Name: Kajol Dash (SNIL, Bhubaneswar)

References:

[1] Amit Aggarwal & Dr. Priya Ahuja , Intellectual Property and Indian Pharmaceutical Industry , Drug Discovery & Development, https://www.drugdiscoverytrends.com/intellectual-property-and-the-indian-pharmaceutical-industry/#:~:text=IPRs%20also%20provide%20incentives%20to%20pharma%20companies%20to,Provides%20strong%20enforcement%20tools%20for%20defending%20infringed%20patents (last accessed on Feb 10, 2016 )

[2] Olga Gurgula, Strategic patenting by pharmaceutical companies – should competition law intervene, Springer Link (October 28, 2020) https://link.springer.com/article/10.1007/s40319-020-00985-0

[3] Ramona Sequeria , Pharma in 2022: Building Trust and extending collaboration , STAT ( Feb 17 2022)  https://www.statnews.com/2022/02/17/pharma-in-2022-building-trust-extending-collaboration/

[4] Aaron S. Kesselheim,  Strategies That Delay Market Entry of Generic Drugs ,The Commonwealth Fund, Sep 18, 2017)

https://www.commonwealthfund.org/publications/journal-article/2017/sep/strategies-delay-market-entry-generic-drugs