Patents on medicines – a necessary condition for private research? Or a model for which there are better alternatives?
Patents serve to protect intellectual property. They enable the holder to exploit their invention exclusively. The state also guarantees this for new medicines, so that profit-driven pharmaceutical companies have a financial incentive to invest in research and development.
Because the development of medicines serves the public good, a temporary supplier monopoly is accepted, even though the state otherwise combats the formation of monopolies because they are economically inefficient. As long as patents prevent competition, the price of medicines remains well above production costs and manufacturers make high profits. As soon as patent protection expires, prices fall dramatically because competitors enter the market with cheaper generic versions. The supply of medicines to the population therefore appears – as with other goods – to conform to the familiar ‘laws of the market’.
But how should this situation be assessed in the case of diseases – such as the immune deficiency disease AIDS – from which many people suffering from very low purchasing power are affected? The patent holder’s monopoly makes essential medicines unaffordable for people without health insurance. In the so-called ‘Third World’, for many people this is a matter of life and death. Generic versions of standard AIDS medicines, on the other hand, reduced treatment costs from 10,000 dollars to 130 dollars in 2000 alone – a reduction of almost 99 per cent! This is just one of the many facts that pupils explore during this ethos module.
This raises many questions:
- Are life-saving medicines not a very special kind of ‘commodity’ to which every sick person is entitled?
- For whom does product and brand piracy entail disadvantages, and for whom does it bring advantages?
- Are patents on medicines a necessary condition for private research? Or do they amount to a death sentence for those who are ill?
- Is there a better incentive model for pharmaceutical research than patents?
- Is there such a thing as global medical justice?
This topic is illustrative because the TRIPS Agreement on the protection of intellectual property is a prime example of the multi-perspective conflict surrounding the establishment and enforcement of an international regulatory framework. Examining the economic consequences of the political framework offers pupils the opportunity to assess the impact of globalisation processes.
Methodologically, the learning unit begins with two controversial posters designed to shape public opinion. The highlight of the unit is a simulated conference in which alternatives to the existing regulatory framework are explored, in particular alternative ways of funding research. The research required for this is carefully structured using materials (text-based work) and online resources. The research is cross-checked against a video documentary, ensuring that the level of complexity is simplified to suit the pupils’ needs.
Curriculum relevance: On the one hand, this ethos module can be used to illustrate and analyse fundamental economic principles using a case study, such as the incentive effects of alternative regulatory frameworks, price formation in various markets, or the issue of market failure. The module is also suitable for exploring the political dimensions of international economic relations (international organisations, the North-South divide, globalisation).
Module: Pharmaceutical Patents
Title:
Patents on essential medicines – lifesavers or a death sentence for patients? The design of the regulatory framework as an issue of business ethics
Author:
Christian Meyer-Heidemann, Arne Rogg-Pietz
Editors:
Thomas Retzmann / Tilman Grammes
Book title:
Commodity Ethics in Economic and Political Education.
Selected teaching modules from the ethos project. Special
edition for the DSW – German Foundation for the Study of Commodities,
Schwalbach/Ts. 2014