IT IS not a good idea to be sick in a poor country. A drug for what ails you may well not exist 鈥� unless the same illness is common in rich countries too 鈥� and even if it does exist, it is likely to be way beyond your means. Yet it is in poor countries that most of the world鈥檚 sick people live.
This is the way things have been for years, partly because of a patent system that was supposed to encourage development of new pharmaceuticals. Against this background, the announcement this month by Andrew Witty, CEO of , the world鈥檚 second biggest pharmaceuticals firm, that GSK would free up access to patents relating to neglected diseases and cut the price of medicines for the poorest countries by at least 75 per cent has been heralded as a new dawn.
GSK wants other companies to help it create a pool of patented substances and processes which anyone can use 鈥� on payment of a royalty 鈥� to develop treatments for neglected tropical diseases. 鈥淚t is right that we explore new ways of stimulating research that otherwise might not happen,鈥� Witty says.
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Is big pharma finally showing its caring side? Well, yes and no. Though the gesture is not quite as selfless as it seems, examination of the complexities that underlie Witty鈥檚 statement suggest that the new dawn might be real.
Under the existing patent system, a company gets a 20-year monopoly on drugs that it has developed, during which it can charge high prices to cover the costs of the R&D and make a profit. This rather discourages companies from investing in drugs that only poor people need, since they are unlikely to be able to pay enough to cover the companies鈥� costs. So companies will spend millions on a cure for impotence that men in rich countries will pay billions for, but won鈥檛 bother with a disease like malaria that kills one poverty-stricken child every 30 seconds.
Where drugs do exist that would help people in poor countries, such as the newer anti-HIV treatments, they are mostly too expensive while still under patent. In the 1990s, pharmaceutical companies tried to tackle this problem by offering their patented drugs to African countries at big discounts, figuring it was better to sell them cheaply than not at all. But what actually happened was that other companies, mainly in India, started to sell their own generic versions. They were able to massively undercut even the drug companies鈥� discounts.
Now, as world trade agreements take effect in countries like India, this source of cheap versions of patented drugs is drying up. Patent-holders warn that if they have to compete with makers of generics, who do not have to invest in R&D, they will not be able to pay for research into new medicines. While there is some validity to this argument, research-based companies would in practice not be selling many patented products in the poor countries that buy generics, so their loss is small. What they really seem to be defending is the principle of stringent worldwide enforcement of patents 鈥� what is tellingly coming to be known as 鈥渙ld patenting鈥�.
Though no one disputes that companies need to reap rewards for the drugs they develop, there are signs that the old system is having to change. Governments are starting to take seriously the idea that rewards for R&D should be 鈥渄e-linked鈥� from the price of the product. Last May, the member states approved a to 鈥渆xplore a range of incentive schemes, including the de-linkage of the costs of R&D and the price of health products鈥�. These might involve, for example, prizes for innovation, funded by governments or other donors.
In July , a club of countries formed in 2006 to buy drugs for the poor, proposed a patent pool that would allow drug companies to make patented drugs available to poor countries at low prices while still selling them at high prices elsewhere. And this year, the will start awarding (PRVs) 鈥� fast-track licensing in the US 鈥� to any company that invents a drug for one of 16 neglected diseases. This is a 鈥減rize鈥� worth having: PRVs allow a company to market a lucrative new drug a year earlier than under normal FDA review. The vouchers can also be sold, for upwards of $300 million.
Where does GSK鈥檚 offer fit into all this? It too wants a patent pool along the lines of the UNITAID scheme 鈥� though not of existing drugs but of experimental molecules and processes that drug companies have patented but are not necessarily using. These molecules and processes would be available for a royalty to researchers wanting to develop new treatments for the FDA鈥檚 16 neglected diseases. The patent holder would retain the rights to the $300 million 鈥減rize鈥� for every drug that emerged, yet it would not itself put up the money for the R&D involved, so the offer is not quite as generous as it may seem.
鈥淧atented processes would be available to researchers developing treatments for diseases of the poor鈥�
It should bring real benefits just the same. As Witty says, it should encourage research that otherwise would not happen 鈥� though it is worth pointing out that such a move might not have been possible had the and other philanthropic groups not been pouring money into neglected diseases, thereby creating a research community ready to take up such opportunities.
Pharmaceutical companies know something has to give. President Barack Obama 鈥渉umanitarian licensing policies that ensure medications developed with US taxpayer dollars are available off-patent in developing countries鈥�. He has the to 鈥渕arch in鈥� on any patented drug developed partly with US research money, and license it to others if the patent holder is not making fair use of it.
The companies will resist that. But it seems they are beginning to accept that the patent system has to change so that it can do what it was always supposed to: promote lifesaving drugs for all.
