Financial Daily from THE HINDU group of publications
Wednesday, Sep 25, 2002
Industry & Economy
Post-IPR, drug prices set to rise: Report
MUMBAI, Sept. 24
ONE of the main contentions at the recent TRIPs meeting in Doha by developing countries including India was that prices of medicines would rise with the implementation of Intellectual Property Rights (IPR) regime. This stand has been vindicated by the report of the Commission on Intellectual Property Rights presented in Geneva on September 17.
In its final report titled `Integrating IPR and development policy', the commission stated thus, "The evidence suggests that patent protection has an effect on the prices charged for medicines.'' It went on to add that, "In the absence of patents in developing countries, more people would be able to afford treatments they need."
Some industry associations that were part of the delegation to Doha had contended that prices of drugs would rise substantially in the event of the implementation of product patent regime. India is signatory to the World Trade Organisation and is committed to be TRIPs compliance, central to which is the implementation of the IPR regime.
From January 1, 2005, IPR regime will become a part of the Indian pharmaceutical industry and drugmakers will get protection for their products as well. Currently, only process patents are prevalent in the Indian system.
A section of the pharma industry, mostly multinationals, argue that IPR helps stimulate economic growth giving protection to the creator thus encouraging inventions. "There is much less evidence from developing countries indicating that IPR systems are a key stimulus for innovation,'' stated the report.
Another significant issue that was noted in the report was investment in the area of research and development by private sector in developing countries.
The report seemed to suggest that developing countries were more likely to invest in R&D for diseases that are prevalent in the developed world. "The evidence suggest that the IP system hardly plays any role in stimulating research on diseases particularly prevalent in developing countries, except for those diseases where there is also a substantial market in the developed world (eg. diabetes or heart disease).''
Further, it stated, "Nor is it likely that the globalisation of IP protection will lead to greater investment by the private sector for the development of treatments for diseases that primarily affect developing countries.''
About 90 per cent of 2.8 billion people living on less than two dollars a day are from South or East Asia or Sub-Saharan Africa. HIV/AIDS, tuberculosis and malaria claim millions of lives in these countries every year.
If investments in R&D will be restricted to "diseases of the developed world", then the question is will the WTO and TRIPs look at issues mainly from a trade point of view, thus maximising profits for companies in the developed world?
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