MY PILL OR YOURS? A Novel Solution to a Generic Debate

By Amit Chandra & Matthew Dasco

The surge of interest in the global HIV/AIDS crisis and the inequalities inherent to its treatment have fueled a difficult discussion about the pharmaceutical industry and generic antiretroviral drugs. This discourse has opened new doors to the understanding of pharmaceutical markets and drug patent law. As it stands, the pharmaceutical industry is exactly that: an industry. This means that a particular pharmaceutical company's interest in a disease is driven by the demand for and consumption of a corresponding medication. Certain diseases, such as heart disease and diabetes, afflict people in both poor and rich countries - these illnesses have global markets. The burden of certain other diseases, such as malaria and river blindness, falls largely upon poor countries.

Excluding the recent investments of certain private organizations such as the Bill and Melinda Gates Foundation, the vast majority of research and development for drugs to treat diseases that prevail in less developed countries (LDCs) has been publicly funded. The possibility to turn a profit by treating schistosomiasis in the Amazon is just too low to warrant interest and investment by private industry.

Property rights also play a role in this dilemma. The concept of property rights centers on the notion that individuals have the right to retain ownership over something - an idea, a piece of land, a logo - and to have it protected by law. Intellectual property refers to 'creations of the mind' (according to the World Intellectual Property Organization), which encompasses anything from ideas to realities. If you have a great idea, you can obtain a patent so that if someone else comes up with the same idea, they cannot claim it as his own.

It is not hard to see how the question of property rights figures into the generic pharmaceutical debate. The majority of pharmaceuticals that appear on the world market are produced by private industry. For a corporation to take on the risk of researching and developing new drugs, two components must be present: demand for the drug (provided by people falling ill) and the potential for profit-making. Competition in the market for a single drug will lower its price and thus, reduce profits. Intellectual property laws ensure that a particular drug is protected from competition. The last thing that Merck wants is for lower-priced generic drugs from Indian manufacturers to enter its most lucrative markets in the United States and Europe. Ultimately, property rights confer price stability upon each drug market, which makes companies more likely to invest in the research and development of novel treatments.

The conflict, of course, arises when individuals in LDCs suffer from diseases that could be treated readily with cheap, generic versions of new drugs. Intellectual property law ensures protection for drugs across borders. In other words, if a company in the US produces an antiretroviral agent, it is protected by law in the developing world, creating a barrier to entry for generic pharmaceuticals to enter the competition.

With the exception of HIV, the development community has focused most of its intellectual property discussion on diseases that are specific to developing areas, while ignoring those - heart disease, diabetes, etc - that plague individuals in both the West and in the developing world. There is no doubt that investment in prevention and treatment for diseases specific to developing countries is absolutely necessary. However, a novel approach to intellectual property law that incorporates an understanding of global disease distribution is required to serve the needs of privately driven pharmaceutical research and health access in LDCs.

Professor Jean Lanjouw, an economist at the University of California, Berkeley, has devised a unique solution to this conflict. She proposes partitioning the market for medications treating socalled global diseases. Lanjouw argues that pharmaceutical companies manu-facturing these drugs make only trivial amount of profit from markets in less LDCs. They nevertheless enforce their patents in these markets, by preventing indigenous manufacturers from making generics, to ensure their primacy in western markets.

Simply stated, Lanjouw's alternative patent regime would force a western pharmaceutical company to choose between patenting a new medication in developed markets or LDC markets (her actual plan involves a tiered system based on national income). These companies will obviously choose the first option, leaving LDC markets open to generic manufacturers. Her plan has a built-in enforcement mechanism by stating that if a company contests the right of a generic manufacturer in an LDC market, their patent in the developed market will be declared void, allowing western generic manufacturers to capture their most lucrative profit base. Lanjouw's alternative is particularly interesting in that does not require any changes to the WTO's Trade Related Aspects of International Property Rights (TRIPS) Agreement.

Lanjouw's plan is not without problems. It depends upon the creation of an international enforcement mechanism to prevent the importation of low-cost generics into western markets. It also fails to address the issue of orphan drugs for diseases that predominantly affect LDCs (malaria, Chagas disease, etc.). It nevertheless presents a reasonable alternative patent regime to answer the question of how to provide low-cost antiretrovirals to developing countries.

Forcing western pharmaceutical companies to provide low-cost medications has not been a successful strategy over recent years. These companies have so far been unable to demonstrate any significant leadership or compassion. This responsibility therefore falls on the shoulders of public policy makers, both national and international. For example, Nobel prize-winning economist Amartya Sen has expanded the field of development economics to focus on factors beyond income, such as health and literacy. Judging by the debate surrounding the patent protection of pharmaceuticals, rising above the income barrier to achieve parallel gains in associated development indicators will take innovative solutions and international cooperation. Lanjouw's plan would be a step in the direction towards progress.

AMIT CHANDRA earned his M.Sc. in Development Studies at the London School of Economics and is currently a fourth-year medical student at the Eastern Virginia Medical School. He can be reached for comment and question at chandra@evms.edu.

MATTHEW DASCO earned his M.Sc. in Development Studies at the University of London School of Oriental and African Studies and is currently a fourth-year medical student at the University of Texas Medical Branch in Galveston, Texas. He can be reached at mmdacso@utmb.edu.

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1.1 billion people in the world living on $1.00 USD a day.

798 million suffer from chronic hunger and 850 million suffer from malnourishment.

6.6x10⁵ kcal produced by agriculture yearly or 2720 kcal available for each person in the world each day.

16 percent of children are born underweight and 26 percent of under-5-year-olds are severely underweight.