Candyfloss and Medicine: Can the Relationship Between Big Pharma and Developing Countries Change Course?

In an era in which Big Pharma is facing unprecedented scrutiny and economic pressures, the thorny issue of major pharmaceutical companies’ relationships with developing countries has attained an unprecedented urgency. After decades during which large multinational corporations have been accused of writing off millions of lives owing to excessively inflexible assertion of their intellectual property rights, developing countries – many of which are now emerging markets of ever-increasing economic importance – began to fight back in the 1990s, manufacturing generic drugs at prices which made them accessible to their populations. 

The structural problem revealed by these two courses of action appears to be clear enough: Big Pharma’s insistence on charging through the nose for medicines that combat conditions such as HIV and cancer – and striking down any entity which dared challenge their patent monopolies – engendered the inevitable counter-reaction from the aggrieved countries, a response which nevertheless threatens to drive a bus through the very notions of IP that pharmaceutical corporations point to as the fundamental building block of their entire industry; without IP enforcement, the incentive to create new drugs arguably lacks potency.

It is in this context that Suleman Ali’s recent piece (Balancing IP and human rights: the case of medicines, 10th October 2013) at the prestigious IPKat blog is particularly refreshing. Ali – the CEO of London-based patent company Holly IP – posits that some kind of compromise is necessary to fulfil the twin objectives of enabling the pharmaceutical companies which design drugs to keep some skin in the game, and the saving of millions of lives across the world: Big Pharma should cut their prices to make them realistically affordable to developing world patients in exchange for some kind of reduction in compulsory licensing.

This solution appears to be most reasonable; more specifically, it would avoid the collateral damage which is likely to occur in the event of the collapse of largest pharmaceutical companies: expertise, logistical capabilities and valuable IP assets which may form part of future medicines could all experience ‘leakage’. Ali’s paradigm is particularly valuable as an alternative roadmap to the actual probable outcome: more aggressive and desperate litigation from increasingly besieged drug giants; strident emerging markets confidently (and perhaps recklessly) taking matters into their own hands in providing life-saving medicines to their populations; and an Internet-enabled revolution in small-scale drug manufacture making a mockery of any court verdict. The world would do well to heed this warning.

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2 Comments

Filed under Business, Law, Technology

2 responses to “Candyfloss and Medicine: Can the Relationship Between Big Pharma and Developing Countries Change Course?

  1. The world is changing as US power declines. Therefore large companies need to recognise that they have to learn to work with every government, rather than imposing. They need friends in Brazil, India, China and South Africa as these countries continue to become more powerful and confident.

    • Indeed – and not just US companies. Entities such as Novartis AG (Switzerland) and AstraZeneca (UK/Sweden) will have to be particularly careful because of the small size of their domestic markets. They have to export to survive – meaning that tact, sensitivity and diplomacy are imperative.

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