An Alternative to the Pharmaceutical Patent System to Fund Drug Research

ASSIGNMENT 3

AN ALTERNATIVE TO THE PHARMACEUTICAL PATENT SYSTEM TO FUND DRUG RESEARCH

By,

Naveen N Kumar

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Introduction

Pharma Industry and the patent policy has been under criticism for many years now. Usually for a Pharma company to develop a new drug, it takes anywhere between 10-12 years of R&D and testing. The cost of developing a new drug is around $1 billion. To help the companies recover this huge investment, Intellectual Property rights are given to the Pharma Company or in other words, Patents. The companies in order to recover this money price the drugs at a premium of 100-400%, in some cases 1000%, of what it actually costs to make the drug. The patent is given for a period of 10-20 years and once the patent expires, a competing company can produce the drug and price it a very cheap price making it a generic drug.

Pirate Party has proposed that since the govt. is subsidizing, to help non affluent population, anywhere between 20-30% of the cost of the drugs, the R&D of the drugs has to be moved from private hands to public hands or govt. The rationale behind this suggestion is that Pharma companies spend only 15% on the drug R&D and the rest 85% is spent on other things. Govt. is already subsidizing or funding the R&D in many countries, especially the European countries, and hence it would be good for everybody if Govt. takes over the Pharma companies.

Pirate party proposes that if the govt. takes 20% of what it currently spends on drugs and allocates it directly to pharmaceutical research, there would more money for the research. The drugs would be patent free and would cost only 30% of what it currently costs. So overall, the cost of the drug would reduce by half if govt. funds the research and makes the Pharma industry patent free.

Let us analyze how this affects the different stakeholders – Government, Public and Pharma companies.

Government:

If govt. removes the patent laws of Pharma industry by taking over...