The Monopoly on Pharmaceutical Patents

Pharmaceutical patents are either process patents or product patents. This is the protection of process patents from the exploitation of their invented technological procedures of product formulation, whereas product patents prevent the entire production of the patented drug by the competitors. Although process patents allow production of drugs by use of other methods, product patents curb any production of the patented drugs as a whole. My goal is to determine the merits and demerits of monopoly on pharmaceutical patents, since there is a dire need to establish whether this is a fair or unfair directive.

Merits of Pharmaceutical Patents

Abraham Lincoln said that patents have had a positive impact on the world of innovation. The monopoly of pharmaceutical patents stimulates research and innovations towards production of new drugs. This acts as a booster that ensures invention of better drugs thus leading to the availability of drugs to cure either the emerging or resistant diseases, despite the tedious invention process.

Research and development process of new drugs is long, risky, and expensive. By estimation, the development of a new pharmaceutical product takes an average of 11.5 years and costs from $800 million upwards. This is according to a survey by Tufts Center. It is, therefore, without doubt that strong patent protection is necessary in making the investment economical.

Demerits of Pharmaceutical Patents

Life is better than profit. The monopoly on pharmaceutical patents enables companies to fix exorbitant prices on these branded drugs. This results in exploitation of the drug users. In addition, it may lead to the inability of those in need to afford the patented drugs for the whole period that the patent remains active. The World Health Organization, as discussed by Cecilia, estimates that one-third of the world population currently lacks access to essential medicines, and this number is likely to increase. The price effect can be best discussed with the following data;

Taking an example of prices for HIV/AIDS clearly shows selling of a generic drug at extremely cheaper prices compared to their branded counterparts. The price of 3TC (Lamivudine) in the United States costs USD$3,271 (per patient per year). In Indian, Hetero Drugs Limited and Cipla Drug Limited sell the same generic versions at between $98 and $190 USD.

The monopoly on pharmaceutical patents prevents healthy competition between the patented and the generic drugs. In case of the competition presence, the prices of the drugs would reduce significantly as illustrated by Cecilia.

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A sample survey on Zantac drug, contacted by the Health Action International, showed that Glaxo Company reduced the price of Zinetac in India because of the available competition in the country. The survey showed that the same drug costs $2 in India but  in Canada it costs $77, $196 in Chile and $150 in South Africa, due to the absence of competition in these latter countries.

The monopoly on pharmaceutical patents has a direct, negative impact on the economy. To product patents in particular, the act leads to productions of inadequate quantities of the drug, thus cutting a potential economic boost that is achievable in the case of the absence of the monopoly on patents. The higher price of the patented drugs also reduces the sells, thus lowering income generated on the drugs, which affects the economy negatively (Dr Hazel Moir). The manufacturing technology also has an impact on the economy.

Process patents prevent further innovations that can be done on a particular patented method. This denies the possibilities of improvements that may make the method more economical than the original patented one. Finally, a patent ends up using a less economical method for the entire period of the patent. This has a negative effect on the economy. The economical hitch has also been felt in countries that have allowed a large manufacturer of generic drugs.

In India, provision of a larger percentage of the manufacture of generic drugs has resulted in reduction of research and development of new drugs. This has generated negative impact on the economy of India, where the government is waiving tax payments on drug research and development in order to encourage the same (Benatar 563). In addition, this process favors bigger companies alone to the disadvantage of smaller companies.

Under this process, there will be discrimination in the pharmaceutical industry. Large companies are capable of securing patents, thus increasing their profits. Seclusion of small companies is due to their incapability to secure patents, thus bringing about exploitation and unfair competition.

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This paper argues in favor of the monopoly in pharmaceutical patents. Ensuring Strong Intellectual Property (IP) Protections in pharmaceutical industries can improve patients’ health worldwide, since patents are a crucial factor in innovation and ensure that companies benefit from the capital investments used in the development of new medicines and cures that are vitally essential to patient health globally. The process also provides a high level of assurance for investors to gamble the finances necessary in the long innovation and development process of new drugs. Legislative changes that diminish the value of pharmaceutical patents could have a large and negative effect on people who are considering investing in this field of innovation. This affects negatively the much needed long-term innovation. Strong IP protections safeguard against counterfeit, illegitimate, and fake pharmaceutical products. Counterfeit medicines not only infringe the intellectual property rights, they are particularly dangerous to human health. They can be not strong enough, too strong or potentially toxic, thus making cheap to be expensive. Monopoly in pharmaceutical patents is inevitable.

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