IPR and the Global Trade of Pharmaceuticals: Balancing Access to Medicines and Pharma Patents

The pharmaceutical business is a cornerstone of global trade, playing a critical role in global public health. Intellectual property rights (IPR) are the foundation of innovation and encourage drug companies to invest in Research & Development. However, the intersection of intellectual property rights and global pharmaceutical trade is a complicated environment distinguished by tensions over accessibility, price, and the ethical obligation to provide health remedy for everyone. This article looks into the complexities of intellectual property rights (IPR) in the pharmaceutical industry, evaluating its influence on global commerce, public health, and ongoing issues

Patents, trademarks, copyrights, and trade secrets are examples of intellectual property rights that provide legal protection to inventors and artists. Patents are very crucial in the pharmaceutical industry. A pharmaceutical patent offers the inventor the exclusive right to make, use, and sell a novel and non-obvious drug for a certain length of time, often 20 years. This exclusivity encourages corporations to invest significant resources in medication research since they may recoup their investment through market exclusivity.

The pharmaceutical industry has evolved into a globalized network, with companies operating across borders and collaborating with research institutions worldwide. There are benefits and drawbacks to globalisation. Positively, it speeds up medication research, makes the pharmaceutical supply chain more efficient, and makes it easier for scientists to share their expertise. But as businesses want to safeguard their ideas across borders, it also brings up IP-related issues. However, it also raises concerns related to IPR, as companies seek to protect their innovations in various jurisdictions.

Compulsory licensing is a provision within the TRIPS Agreement that permits a government to award licences for the production of a patented product or method without the patent holder’s approval. This provision is activated under certain conditions, such as a public health crisis, where access to important drugs becomes a priority. The Doha Declaration, released in 2001, reaffirmed TRIPS’ flexibility in protecting public health. It expressly recognised WTO members’ ability to employ compulsory licencing to solve public health emergencies, including the HIV/AIDS epidemic. The practical application of compulsory licencing, on the other hand, remains a difficult and contentious matter.

[1] World Trade Organization (WTO). (1994). Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Global intellectual property standards are largely shaped by the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, which was created by the World Trade Organisation (WTO).  A disputed topic within the TRIPS framework revolves around how to strike a balance between pharmaceutical patents and the availability of necessary medications. Although TRIPS mandates that its member nations grant pharmaceutical product patent protection, it also gives governments flexibility in implementing public health protection measures. In 2005, Novartis submitted a patent application in India for Glivec (imatinib mesylate), a cancer treatment. The medicine was a modified version of a known chemical, hence the Indian Patent Office rejected the application, stating that it did not fulfil the requirements for patentability under Indian law.[1]

One noteworthy exception is the compulsory licencing provision, which permits a government to issue licences for the manufacture of patented medications without the patent holder’s approval. This clause is critical for guaranteeing that people have access to necessary medications, particularly in underdeveloped nations where cost is a major issue. But the implementation of mandatory licencing is a divisive topic that frequently sparks disagreements between nations and pharmaceutical firms. Through one perspective, compulsory licensing is viewed as a critical instrument for addressing public health requirements, particularly in poor nations where pharmaceutical pricing and accessibility are major challenges. Compulsory licencing can help lower prices, enhance competition, and improve access to life-saving treatments by permitting the local manufacturing of generic copies of proprietary medicines. For example, when South Africa faced a major HIV/AIDS  global epidemic in the late 1990s, the high cost of patented antiviral medications became a barrier to treatment. The government’s attempt to import and manufacture generic equivalents was met with legal obstacles and international pressure. In the setting of a public health crisis, this case highlighted the delicate balance between preserving intellectual property and ensuring access to life-saving drugs.

However, some contend that compulsory licencing might stifle pharmaceutical innovation by weakening the financial incentives associated with patent protection. They argue that businesses may be less willing to spend in R&D if they are concerned that their patents would be vulnerable to forced licencing, which might impede the development of novel and inventive medications. In addition, rather than focusing on actual public health emergencies, concerns have been expressed over the possible misuse of forced licencing by nations looking to gain economic advantages. Thus, finding the ideal equilibrium is essential to guaranteeing that the technique is used appropriately and does not impede the advancement of medical innovation as a whole.

[1]Novartis AG v. Union of India & Others, (2013) 6 SCC 1.

IPR encourages innovation, yet questions about the cost and availability of medications are raised. Particularly in underdeveloped nations with limited resources, the high cost of patented medications can provide serious difficulties. This has sparked discussions on the moral ramifications of putting corporate profits ahead of the general welfare. The goal of campaigners and non-governmental organisations is to strike a balance between providing equitable rewards for innovation and ensuring that everyone has access to life-saving medications.

Access to medications is greatly improved by generic medications, which are bioequivalent to branded medications and typically hit the market when patents expire. Since they are frequently more reasonably priced, they are an essential part of public health programmes, particularly in environments with limited resources. But switching from patented to generic medications isn’t always easy, and court cases involving pharmaceutical corporations trying to maintain their market dominance and generic producers hoping to get into the market are frequent.

Despite the benefits of intellectual property rights in stimulating innovation, there are obstacles and complaints related with their use in the pharmaceutical industry. One important source of worry is the exploitation of patent rights to artificially extend market exclusivity, a practise known as “evergreening.” This practise entails making small changes to current pharmaceuticals and securing additional patents in order to block or postpone the arrival of generic competition. Such measures can stifle competition, limit price decreases, and make it difficult to acquire inexpensive alternatives.[1]

The problem of biologics and biosimilars, which are difficult and costly to create, presents another difficulty. These items face difficulties entering the market because to the absence of a well-defined regulatory framework and standardised international standards, which might restrict competition and perhaps extend monopoly periods for innovative enterprises.The patent on the biologic infliximab, which is used to treat autoimmune conditions including rheumatoid arthritis, expired in Europe. But there were legal and regulatory obstacles to biosimilar versions’ introduction, including worries about market competition and interchangeability.[2]

Even while mandatory licencing has certain advantages, putting it into practise comes with a number of difficulties and restrictions. The ability of poor nations to use compulsory licencing procedures efficiently is one major obstacle. Many lack the resources, technological know-how, and infrastructure needed to produce generic medications locally, which reduces the usefulness of compulsory licencing. Furthermore, the pharmaceutical sector has used a number of tactics to safeguard its patents and dissuade the application of compulsory licencing. These include attempts to depict compulsory licencing as a breach of intellectual property rights, legal challenges, and threats of trade sanctions. Such opposition may discourage nations from using their TRIPS Agreement rights, maintaining the disparity in access to healthcare.

[1]Hemphill, C. S., and Sampat, B. N. “Evergreening, Patent Challenges, and Effective Market Life in Pharmaceuticals.” Journal of Health Economics, vol. 31, no. 2, 2012, pp. 327-339.

[2]Biosimilars and patents.” Lexology, Bioscience, June 11, 2019), https://www.lexology.com/library/detail.aspx?g=215a4d2d-3f26-4f9e-a19c-4cfc77bec851.

The crucial nexus between intellectual property rights, international trade, and public health was highlighted by the COVID-19 pandemic. The speed at which vaccines are developed has brought attention to the value of innovation as well as the pressing need to provide universal access to immunisations. To enable the mass manufacture and distribution of vaccinations, calls for the temporary suspension of some intellectual property rights pertaining to COVID-19 vaccines—also referred to as the TRIPS waiver—gained traction.

Though some nations supported the temporary suspension of patents to address the global health emergency, others expressed worries about potential detrimental effects on future innovation. These divides were evident in the debate around the TRIPS waiver. This episode highlights the constant conflict between the need to protect intellectual property and the necessity of attending to global health crises.[1]

[1]World Health Organization (WHO). (2020). Access to COVID-19 Tools (ACT) Accelerator.

To strike a balance between access to medicines and pharmaceutical patents, it is essential to address the challenges associated with compulsory licensing while ensuring its responsible use. Capacity-building initiatives, international cooperation, and technology transfer can enhance the ability of developing countries to leverage compulsory licensing effectively.

Additionally, there is a need for continued dialogue between pharmaceutical companies, governments, and international organizations to develop a nuanced approach that considers both public health needs and the incentives for innovation. Creating a framework that encourages collaboration rather than confrontation can foster a more cooperative environment, facilitating better access to medicines without unduly compromising innovation.

As the pharmaceutical landscape continues to evolve, finding a balance between protecting intellectual property and ensuring global access to medicines remains a complex challenge. Several strategies and solutions can contribute to a more equitable and sustainable pharmaceutical ecosystem. Increased collaboration between governments, international organizations, pharmaceutical companies, and non-profit entities can foster innovation and improve global access to medicines. Establishing harmonized international standards for regulatory approval of generic and biosimilar drugs can streamline the entry of affordable alternatives into the market. Facilitating technology transfer and knowledge-sharing can enable developing countries to build their capacity for pharmaceutical production, reducing dependence on external sources. Reforms to prevent the abuse of patent rights, such as addressing evergreening and ensuring a balance between rewarding innovation and promoting access, can contribute to a more equitable pharmaceutical market. Continued support for global health initiatives, including funding mechanisms for research and development of medicines for neglected diseases, can address unmet medical needs and promote access to essential medicines

The intersection of IPR and the global trade of pharmaceuticals is a dynamic and multifaceted landscape. While intellectual property rights play a crucial role in incentivizing innovation and research, striking a balance with the imperative of ensuring global access to medicines remains a formidable challenge. The ongoing debates, exemplified by the discussions around the TRIPS waiver during the COVID-19 pandemic, underscore the need for a collaborative and nuanced approach to address the complexities of the pharmaceutical industry. Compulsory licensing under the TRIPS Agreement represents a critical tool for balancing access to medicines and pharmaceutical patents. As the world continues to grapple with emerging health challenges, finding solutions that prioritize both innovation and accessibility is imperative for the well-being of global populations.