Big Pharma against the Developing World

A major challenge faced in developing countries is that of infectious diseases. The upside about this is that many of these diseases are easily treatable or preventable with modern medicine. Yet high costs of these medications puts them out of the grasp of those who really need it.

A little instrument of intellectual property law, known as a Patent has meant that there is a continual struggle between ensuring pharmaceutical companies have the incentive to undertake research and development and keeping medical therapies affordable.

When a pharmaceutical company develops a new drug, what it essentially seeks to acquire is a patent.  A patent gives such a company exclusive rights to manufacture, market and sell that product, essentially giving it monopoly status over the drug. For the manufacturer this means the ability to charge often-exorbitant prices for these drugs, especially if they are essential to patients.  Patents on drugs typically last for 20 years (yes, quite a long time!). The desire to acquire a patent is a huge motivator for large pharmaceuticals to undertake the expensive R&D to develop new and innovative drugs and therapies. However the ongoing issue at hand is whether it is equitable to charge such high prices that those truly in need cannot access the drugs.

In 1995, the World Trade Organization introduced the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement, to which 148 countries are signatories. Simply put, this meant that patents were enforceable not just in the country of manufacture but across all member states. While this is great news for Big Pharma, it often means restricted access to vital and lifesaving drugs for many in the developing world

A great example HIV/AIDS is a massive pandemic in Sub-Saharan Africa and parts of Asia. The prevalence of this disease is far higher here than anywhere in the developed world. The development of Anti-Retroviral (ARV) drugs was a groundbreaking innovation in the management of HIV, with the potential to significantly slow the progression of the disease and reduce mortality associated with this. However, the cost of the treatment was a staggering $10000 – $15000 per year. Sadly, almost a billion people in the developing world live on less than $1 a day, meaning that even though an effective treatment for HIV/AIDS exists , for many it remains simply a dream.


So what’s being done? What is the way forward?

Countries such as South Africa and Brazil have taken a stand to prevent those in dire need from receiving healthcare access. For example , in 1997 SA passed a law  allowing government to import or  manufacture cheap alternatives to the treatments. Brazil’s government in a similar move began to offer free ARV treatment to AIDS patients. Unsurprisingly this was met with much opposition from pharmaceutical companies as well as the US, however cases were dropped.

Fortunately, there is a provision in the TRIPS agreement allowing ‘Compulsory Licensing’. What this means is that a member nation under certain circumstances such as a national pandemic can grant someone else the right to produce a patented product without the patent holder’s permission. Such third parties could then produce these drugs at a fraction of the price, as they do not have to recoup the cost of R&D undertaken by the original patent holder

So, problem solved right? No not quite! Overuse such provisions, and we’re back to square one. No pharmaceutical company is going to want to undergo R&D if their patent rights are just going to be ousted by compulsory licenses.

What are some things that might work?

  • Developing an R&D agenda whereby pharmaceutical companies work in conjunction with the WHO, prioritizing research for diseases, which constitute major health, concerns.
  •   Implementing differential pricing between developed and developing nations in regard to drugs considered essential.
  • Improving health infrastructure in developing countries to limit the spread of such pandemic diseases.
  •  Promoting R&D within developing countries with a focus on developing therapies to combat local diseases.

Overall, health care access in developing nations need to be viewed not just as a health issue, but as an economic one also. Government and industry must work in such a way that both efficiency and equity are attained, and that people in developing nations are not denied the right to preventative or curative therapies.


Leave a comment if you agree or disagree with what has been said, as feedback and debate on the matter are encouraged and appreciated!

From the ‘Mind the Gap’ team


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