Abstract
Patents are often seen as legal monopolies that impose exorbitant pricing, particularly for innovations in the pharmaceutical and medical device sectors where the inventions are usually protected through the patents. Many have argued that patent protection should not be extended to sectors where the public interest in obtaining those products or services is important, such as health-related products, which also includes the medications. This paper provides an overview of different policy choices that national governments might employ to both promote innovation in health-related goods and ensure low consumer prices for the basic medicines. Special consideration is given to the current COVID-19 health emergency and highlights the solutions through the published reviews to make the basic medications freely accessible to all countries.
Introduction on the global status of diseases
In a Report published by World Health organization, it is estimated that nearly 2 billion of the world population does not have access to the basic medicines. It is impossible for humanity to have a good health without access to the pharmaceutical products. Lack of access to medicines affects the humans by increasing their pains and suffering. For example, there will be no relief for children who are suffering from earaches if they do not have access to the basic medicines. Similarly, to the women who may bleed to death during childbirth because of no access to the medicines and deaths from diseases that can easily and inexpensively prevented or cured through the medicines.
1
Many reports and research papers have highlighted the sufferings of millions of people every year along with the childhood deaths from the diseases that could have been easily prevented or cured by means of basic medical products.
2
Figure 1 illustrates some key evidence related to the people sufferings caused globally due to the lack of access to the medicines.
3
Sufferings faced by the humans due to the lack of access to medicines
3
.
Burden of diseases on children and global health risks
Based on the published research surveys, it is projected that around 38 million people globally are infected with HIV, 7.5 percent of the total projected HIV patients were kids aged 0–19 years. In 2019, around 880 children were infected with HIV daily, and approximately 310 children died from AIDS-related causes, mostly due to a lack of access to HIV preventive medications, healthcare, and treatment facilities.
4
Access to basic and essential medicines is a vital factor for every human being. Disparity in the allocation of vital medications, illegal expenditures, inferior quality of medications, and high pricing with additional out-of-pocket expenditures for the drug have impacted the poor and vulnerable. People living in poor and least developed nations are disproportionately affected by a lack of access to basic necessary medications. Figure 2 depicts the number of children of various ages living with HIV in 2019, whereas Figure 3 illustrates the global mortality caused by AIDS among children owing to a lack of access to essential medicines.
4
The X-Axis in Figures 3 and 4 indicates the approximate number of patients, as well as the lower and upper estimates of patient numbers. Number of children suffering from HIV at different Age groups
4
. Number of children died from AIDS at different Age groups
4
. Distribution of causes of death among children under 5 in 2015
5
.
Diarrhea and Pneumonia are the two most deadly diseases which are collectively responsible for more than 25% of all deaths in children who are under the age of 5 years. It has been reported that due to the lack of access to essential medicines in the poorest countries, every year more than 1.4 million children die from diarrhea and pneumonia collectively. The high concentration of pneumonia and diarrhea deaths among poor populations is a key indicator highlighting the inequality among countries and emphasize on the much-needed global efforts to ensure the access of basic medicines to the most vulnerable children. Figure 4 shows the global breakdown of death causes among children under the age of 5 years in 2015. A majority of the health professionals are of the opinion that around three-fourth quarter of these deaths could have been controlled efficiently, if vaccines and medicines were provided to these children, especially the children living in the poor countries. 5
Technological innovation in pharmaceutical and medical technologies
Intellectual Property (IP) systems work by granting its owner restricted rights and prohibiting third parties from utilizing the technology without the rights owner’s permission. The IP system strengthens market-based incentives for businesses to invest in product development and new technology commercialization. Due to the significant financial and technical resources necessary, as well as the high risk of failure even at a late stage in product development and concerns linked to product liability, such incentives are regarded as useful for the development of medical technology. Many medical innovations are costly to create but very inexpensive to replicate. In such cases, firms would find it unsustainable to commit resources in product research and regulatory approval if their competitors could instantly offer replica products. The exclusive right given for patents can contribute to market distortion and result in a scenario characterized by inefficiencies, excessive pricing, and a lack of medical technology availability.
6
Figure 5 illustrates the top pharmaceutical markets in the world in terms of drug sales in 2019. Pharmaceutical sales in the United States produced US$ 501.2 billion in 2019 and placed first among the world’s major marketplaces. Sales in China totaled $94.9 billion, while sales in Japan totaled $79 billion. In Europe, Germany earned US$ 51.9 billion in sales, France generated US$ 35.2 billion, Italy generated US$ 32.9 billion, the United Kingdom generated US$ 26.4 billion, and Spain generated US$ 24.3 billion. Brazil’s sales were US$ 24.3 billion, while Canada came in the bottom with US$ 22.6 billion in pharmaceutical sales.
7
Top pharmaceutical markets worldwide in 2019
7
.
Figure 6 shows the important factors that must be satisfied in order for medicines to be accessible to public in health-care systems.
Price secrecy and discrimination by the pharmaceutical companies
In majority of the developed countries, the government set up public health insurance packages to regulate the drug market and make the medicines available for its citizens. Figure 7 shows the typical process followed by the developed countries to provide medicines to its citizens. The health and safety department will carry out the safety tests and evaluates the efficacy of the medicines before buying them. The government regulators will carry on the assessment on whether the country needs the medicines and should they be included in the public health insurance packages. Later, the government negotiates the pricing of the medicines directly with the pharmaceutical companies and will try to buy them out at cheaper prices. At the end, the patients will receive the medicines on subsidized prices through the public insurance. This system of purchasing the medicines will keep the prices easily affordable to the patients. But the patients will have access only to the medicines which are included in the public health insurance packages and will have no access to many more important drugs/medicines. There are reports where the negotiations and deal between the regulators and pharmaceutical company’s go off. Due to this, the patients will suffer as they will have no access to such medicines and will have to buy it directly from the manufacturers at a very high cost.
10
Typical process in the developed countries to buy the medicines
11
.
Many published scientific reports have highlighted the common practices followed by the pharmaceutical companies to keep the final selling price of the medicines as confidential when selling the patented medicines to the countries. When establishing prescription costs, pharmaceutical companies and national governments frequently negotiate secret rebates.
12
Figure 8 depicts several frequent justifications and their consequences when pharmaceutical corporations conceal true drug pricing from nations and potential customers. Rationales and their impacts of hiding the actual prices of the medicines
13
.
Access to medicines during the pandemics and emergency situations
A pandemic refers to an outbreak which usually happens worldwide crossing countries and affecting human in large numbers through sufferings and deaths. Diseases and illness have known to trouble the humanity since the earliest days. Extensive commerce has created the new opportunities for the human and animal interactions that stimulate such pandemics.
14
Figure 9 shows some deadliest pandemics which have severely affected the humanity. Pandemics with feath rates and zoonotic source of origin
15
.
The World Health Organization in co-operation with other partners recently has developed an innovative Pandemic Preparedness (PIP) Framework to tackle the Influenza viruses’ attacks in the future and making sure that all the people will have the access to the essential medicines to prevent the spread of infection. Figure 10 illustrates some key actions which were agreed upon by all the members states and medicine manufacturers to ensure the smooth functioning of the system during the health emergency situations and making sure that the patents will cause no barriers in doing so.
16
Pandemic influenza preparedness framework to curb the spread of flu viruses
16
.
An effective worldwide vaccination policy and framework are critical for combating the current COVID-19 pandemic and saving people’s lives. Strong regulations authorities should be established in nations where the ability to approve/authorize the use of patented medicines/vaccines during health crises exists. Numerous recent studies have examined how far the pharmaceutical manufacturers have come in developing vaccinations at an unprecedented size and rate, as well as the obstacles that lie during the pandemic situations.
17
The continued fast spread of COVID-19 is challenging countries and the World Health Organization’s (WHO) ability to implement a global coordinated response to the pandemic in a timely manner. Developing nations and Least Developed Countries (LDCs), particularly in Africa, are particularly vulnerable to the public health crisis’s unfolding consequences.
18
The delicate connection of national regulatory regimes and global supply chains has a direct impact on the availability of vital medications and patient care. Despite decades of global civil society activism, critical medications in low- and middle-income countries remain persistently unavailable, inaccessible, and costly.
19
National seasonal influenza prevention and control strategies have been proposed as a basis for pandemic preparation. During the 2009 pandemic, the WHO intended to provide more equal access to influenza vaccinations to Member States through pandemic vaccine donation.
20
Figure 11 depicts some key aspects that can be addressed in developing an effective worldwide immunization campaign to combat the COVID-19 pandemic. There is a need to strike a balance between health and pharmaceutical patent rights to guarantee that creativity and innovation are not sacrificed in the pursuit of COVID-19 immunity. Many fair pricing methods, such as parallel importation, reference pricing, and compulsory licensing regulations, are in place to allow the seamless entrance of promising vaccines into the nation at a reduced cost and to incentivize manufacturers/pharmaceutical firms. All governments should emphasize the right to health over the compensation of pharmaceutical patent rights.
21
Researchers have published a study on the mathematical technique to estimating the cost of the COVID-19 vaccination. Based on the findings of this study, governments may negotiate pricing with manufacturers to keep public sector costs low while satisfying medication demand and ensuring that each manufacturer achieves a target profit.
22
Parameters for global immunization policy.
Conclusion
The current COVID-19 pandemic has led to increased need for many basic medicines around the world, especially among the Developing and Least Developed countries due to the lack of capacities to manufacture the essential medicines. Exclusive rights granted through patents often hinder the right of low-income people to access the needed medicine because of the higher prices. The right to health as a basic human right should always supersedes when compared with the patent law protecting the medical technologies. Access to the medicines is the basic right for all humans and it should be available to all without any Intellectual Property barriers and restrictions. Just imagine the suffering and the number of lives which will be at risk if the current patients suffering with AIDS do not get the medicine. Access to essential medications is critical for decreasing the financial burden of treatment, minimizing further pain and suffering, lessening the length of disease, and preventing unnecessary impairments and deaths across the world. Improving maternal health, lowering infant mortality, and battling illnesses such as malaria, AIDS, pneumonia, diarrhea, and others are all heavily reliant on readily available and inexpensive medications. The involvement of the national government and international health organizations in enhancing the availability and affordability of drugs to the poor is critical in saving their lives.
The countries should amend their national laws governing the intellectual property and should be strict with the tricks and strategies used by big pharmaceutical companies who often recur to secondary patenting to delay the expiration of drug exclusivity in the market through processes such as ever greening strategies. The patents in the field of healthcare may provide nothing or very limited innovation in the poor countries where most consumers are impoverished because of the lack of scientific and technological capability. In the absence of additional price-cutting initiatives, the monopoly costs associated with patents may limit the affordability of patented health-care goods for the poor. National governments should compel pharmaceutical firms to preserve medical price transparency. To maximize profits, manufacturers generally establish various pricing in different regions. If manufacturers do not agree to more transparent pricing practices on their own, regulatory action should be employed.
With the recent progress made by the WHO and its partners, the low-income countries can now use variety of strategies to ensure that patents do not prevent them from access to medicines.23,24 1. Price controls (Reference pricing), Parallel imports, differential or tiered pricing, and compulsory licensing are some ways by which the prices/cost of medicines during the health crisis (such COVID-19 pandemic) can be kept low and at the same time incentivize the pharmaceutical companies. Price regulation based on reference pricing is a proven efficient way to lower the cost of the medicines. Many studies have shown that reference pricing has resulted in the price reductions of medicines in the range of 7–24%. In the reference pricings, drugs are grouped into class according to the therapeutic effects. The public insurers will pay only one amount for any medicines/drugs grouped in the class. Reference pricing has proven not to suppress the innovation but promotes cost effectiveness by reducing the out-of-pocket costs of the customers. New drugs might be placed in a new class and the prices for such drugs may be high. 2. Compulsory licenses have also been reported as having resulted in substantially reduced prices of patented medicines during the patent term. As part of the international agreement between the member states, the patent owners will fully co-operate with the local manufacturers in transferring the additional know-how and technology transfer that might be required in producing the medicines. Compulsory licensing can be effective at reducing prices, especially, in the poorer countries. 3. Many recent research findings have emphasized on the benefits of parallel imports and how this strategy will provide the medicines of high standards quality and safety to the Europeans. The report highlighted on how the parallel imports provide competition to pharmaceuticals that are still under patent protection. 4. Another potential solution is uniform pricing of medicines, whereby the seller sets one price, adjusted for transport, distribution, and other costs, for all consumers in all countries. It should be noted that in such circumstances there would be no scope for parallel importation.
Based on the literature review conducted on this subject matter, in the Figure 12, I have presented some key responsibilities which the national governments can follow to control the pricing of the drugs/medicines and to prevent the formation of legal monopolies by the pharmaceutical companies in their respective jurisdictions. Government role in the pricing of medicines.
Footnotes
Acknowledgments
The author wishes to thank the World Intellectual Property Organization (WIPO), Ankara University, and the Turkish Patent and Trademark Office for providing him with a scholarship and financial assistance for his LLM studies. The author would like to express his gratitude to King Fahd University of Petroleum and Minerals for providing the necessary support and facilities for this research. Dr. Enrico Bonadio was also very helpful during the LLM coursework, which the author appreciates.
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
