Several approaches for improving access to health care in the developing world were discussed at the meetings of the World Health Assembly and the World Intellectual Property Organization in Geneva this spring and summer. Among them: attacking the "problem" of patents on crucial medicines like antimalarials and antiretrovirals. Some argued that patents on these medicines are little more than vehicles for driving prices artificially high. In fact they are essential for facilitating the complex business deals needed to deliver drugs in the first place.
Patents do not cause drugs to be expensive as much as the high costs of research, development, regulatory approval, and distribution. However, even these commercialization-related costs are not the real barrier for getting drugs delivered to patients in poverty-stricken regions like sub-Saharan Africa. Ridiculous taxes, import duties, and regulatory barriers are one set of important problems that must, and can, be eliminated immediately. In many cases, taxes and import duties reach well above 50 percent.
Frequently, after drugs have been found safe and effective by careful regulatory review in the United States, Europe, and Japan, and used widely there, an additional 30-month regulatory review period and high fees are imposed before importation is allowed to poverty-stricken regions. This is all in the name of the "public interest." Even drugs provided for free are often hit with tremendously high import duties, plus they face the same regulatory costs as expensive drugs.
All of these costs are borne by poverty-stricken populations. And while some of these costs actually may be serving as important subsidies to local governments and economies, those kinds of funds are already being more efficiently provided directly by the United States and others.
Of the new drugs that are essential and patented, many are already being provided to these regions at ultra-low cost or for free. They're getting there, but not to the patients.
The problem is not price and not patents--it's distribution. If your newspaper delivery person were given free papers but not paid per delivery, and then ran the risk that any profits he did make could simply be taken away, would you really be surprised if the delivery service went out of business, or was never even started? And what if, instead of newspapers, we were talking about valuable drugs? Why would they not end up on the black markets in the United States, Europe, and Japan? They often do. The potential for such black markets discourages both initial supply and local distribution. Enforcing patents internationally helps block such black markets.
Strengthening the rule of law will empower local populations to overcome these obstacles at the grassroots level. Protecting patents and enforcing contracts serve as essential enabling devices for development of the businesses needed to get distribution done.
Access to basic health care is a more critical problem that screams for a solution. When doctors, nurses, hospitals, essential treatments, and basic medical care are not even available, it surely is an imprudent triage to focus attention on the price of cutting-edge innovative medicine. The vast majority of the drugs on the World Health Organization's essential medicines list are not even covered by patents today. A host of important diseases are treatable by this large array of medicines. Indeed, the many wonderful private, foundation, nongovernmental organization, and public efforts already being made to improve access to basic health care in these regions are a proud testament to the effectiveness of this approach. Additional efforts in this direction can have high impact, quickly.
Real lives are being lost. Real action is needed. Patents are an important part of the solution. But it's even more important in the short run to continue to improve access to basic health care and to remove the barriers to distribution of drugs, whether patented or not.
We also should continue to help strengthen the rule of law over time. Protecting patents and enforcing contracts serve as essential enabling devices for development of the businesses needed to get distribution done.
Botswana has long stood as an impressive example of efforts on this front, and new initiatives along these lines by President Bingu wa Mutharika of Malawi offer similar hope. The developed nations of the world interested in improving access to health care should continue to spend financial and political capital to bolster these efforts.
F. Scott Kieff is an associate professor at Washington University School of Law and a research fellow at Stanford University's Hoover Institution. This article originally appeared in The National Law Journal, a sibling publication.
