PATENTS IN PHARMACEUTICAL INDUSTRY Avan Oktabrian Buchori avanoktabrian24@gmail.com
Patents is a kind form of Intellectual Property that gives its owner an legal right to exclude others from making, selling or using an invention, for a limited period of years. But in exchange, the Patents holder have to publish their own invention after the limited period of the patent is run out. One of the patents regulation is regulated under World Trade Organization (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement). And all of the WTO Member should have a regulation related to Patents. TRIPS Agreement introduced the Law of Intellectual Property Rights in the International Trade Policies. Until 2020, TRIPS Agreement is still an agreement who gives a complete and comprehensive regulation to the Intellectual Property Rights. One of the activities of Pharmaceutical Industry is a Drug research and Development (R&D), R&D is a high risk investment for the pharmaceutical industry. That is why, Patents should be there for protect the “invention” of the Pharmaceutical Industry. Patents also have a function to help companies to recover the costs spent in discovering its invention. The Paris Convention of 1883 established of the International Union for the Protection of Industrial Property in 1884. This convention has given an important development in international patenting that ensured equal treatment of inventors. Furthermore, the establishment of the European Patent Convention in 1977 allowed a single patent application to be filed for European Countries at the European Patent Office (EPO). The approved applications were validated by other member countries of EPO, which meant that this was essential for a system of filling a “bundle” of national patents. Then, The Patent Cooperation Treaty (PCT) was soon established in 1985, and this treaty allowed nationals or residents of 145 contracting signatory countries to file a single international application at their local patent office. A standardized application and a single search by an International Search Authority (ESA) reduced the costs for filing. Pharmaceutical Industry has been and still is an industry that largely serves developed countries. United States is occurred the 82% of R&D Activities in the world due to the lack of price controls that enabled them to exploit Market power which was more difficult to do elsewhere, including Europe. United States dominances the R&D Investments lasted for about a decade from 1995 until 2005. But, the dominance of R&D Investment by United States is decreased because of the increasing competition from emerging countries, such as Brazil, China and India. R&D Investments is only give a little fractions of the Gross Domestic Product for most countries, While the OECD countries reported in the World Bank World Development Indicators(WDI) in 2013 is seemingly at 2,4%.
PATENTS IN PARMACEUTICAL INDUSTRY Economists have studied whether or not patents are successful in encouraging innovation in both theoretical and empirical research. And both of the micro and macro approaches were taken. At the micro level, it shows that the relationship between R&D Expenditures and Patents it was found that the two were almost proportional across firm above a threshold size. At the micro level, R&D Expenditures gave a big impact to the economic growth through the R&D and Physical Capital Accumulation. Strong patenting gives a positively impacted for a sample of OECD Countries. But, patents have a kind of trouble, which is in Feldman Research. Which looked at all drugs on the market between 2005 until 2015. She found that 78% of drugs associated with new patents actually are not a new drugs, but an existing one, and almost 40% on the market had additional market barriers through further exclusivities. And this kind of manipulation is becoming a trend across the Pharmaceutical Industry and she found that manipulative extension practices were particularly pronounced among blockbuster drugs. More than 70% of the 100 best-selling drugs between 2005 and 2015 had their protection extended at least once, with almost 50% receiving more than one exclusivity extension. And in IMAK’s 2018 report, identified a similar trend among the 12 best selling drugs in the US in 2017, it found that the drugs have an average 38 years of exclusivity because of the Patents, and almost double the 20-year original patent protection. More trouble related to Patents and R&D is that it’s have too much regulation that stunt the innovation, but too little regulation that can restrict people’s access to life-saving medications. For example, Martin Shkreli able to change the price of Daraprim, a medication used by AIDS patients to prevent the virus from duplicated themselves. The price of Daraprim which from $13.50 become to $750 per pill in 2015. And patents, didn’t give a regulation that can restrict the company to make their own price.
CONCLUSIONS Patents related to TRIPS under WTO, already give Pharmaceutical Industry a big benefit. From protection of their invention, economic growth for the holder of Patent, and many more. But beside of that, there’s still many problems related to Patents, like the Manipulation of the “New Drugs” that actually an old drugs, Price manipulation and many more. WTO should be given a more comprehensive regulation related to Manipulations of New Drugs, like the office should check the Ingredients of the Drugs before give a patent to it. Beside of that, the Price Manipulation should be regulated too. Because, even patents already protect the inventions. But, patents didn’t protect the “other”, the price manipulations giving trouble to People who didn’t have enough money to buy it even those drugs are really important to their live.
BIBLIOGRAPHY Agreement on Trade-Related Aspects of Intellectual Property Rights Eaton J. and Kortum S. Trade in Ideas: Productivity and Patenting in OECD. Journal of International Economics. 1996;40:251-278. The European Federation of Pharmaceutical Industries and Association (EFPIA). The Pharmaceutical Industry in Figures—Key Data 2016 [Internet]. 2016. Available from: http://www.efpia.eu/uploads/Modules/Documents/the-pharmaceutical-industry-infigures2016.pdf. From evergreening to thicketing: exploring the manipulation of pharma patents. 2019. Avaiable from: https://www.pharmaceutical-technology.com/features/pharma-patents-manpulation/ Patents and the Pharmaceutical Industry. 2017. Avaiable from: https://cmr.berkeley.edu/2017/05/patents-and pharmaceuticals/#:~:text=Patents%20are%20a %20way%20to,would%20be%20accessible%20to%20all.