Patents are an exception in a free-market economy, as the inventor benefits from a monopoly that allows him/her to establish the highest possible prices for his/her products (power to fix prices) in exchange for divulging his invention, ideally for the benefit of society. The power conferred by a patent is considerable, which can lead to abuses, to prohibitive pricing, or even barriers to progress.
What is a patent?
A patent is an exclusive right, granted for an invention, that bestow on the holder the right to forbid third parties from using it for professional purposes. The “use” of such a patent includes, in particular: manufacturing, storing, sale and distribution, as well as import, export, transmission and possession to such ends for a limited period of time, generally of 20 years
To be patented, the invention should:
- possess an innovative element when compared with the sum of current knowledge and/or expertise.
- imply an “inventive activity” or be “non-evident” for a fellow professional.
- be able to be used in industrial applications.
When the patent expires, the protection ends, and the invention enters the public domain; that is, it can be freely used by third parties without infringing the patent.
The TRIPS agreement validates a model based on patents . . .
To understand the current debate on research and access to medication, it is necessary to go back to the coming into force, in 1995, of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This international treaty obliges the member countries of the WTO (164 in 2017) to grant patents for new drugs – which a number of countries, such as India and Brazil, did not do previously. This agreement represented an important victory for the giants of the pharmaceutical industry, allowing them to sell their new patented products at a high price to wealthy patients in emergent countries.
. . . instead of favouring innovation
The TRIPS agreement serves above all the interests of the pharma giants, as the monopoly resulting from the patents guarantees high prices in the long term. In their argument in favour of such an agreement, the pharmas submitted that this extension of patents would enable the related products to make a profit, while favouring research and development (R&D).
The reality is however quite different: patents do not favour innovative research, but are rather destined to protect investments and profits. They act as a brake on R&D, and aggravate the problem of access to medication.
With scant regard for the particular needs of public health in poorer countries, the TRIPS Agreement validated the globalisation of an R&D model based on patents granted to pharma companies. Nevertheless, the instruments known as the “TRIPS flexibilities” make it possible to compensate for certain faults in the patent system and to re-establish access to essential drugs.