Expanding patent protection decelerates market entry of new drugs, and lowers access to medicine by boosting monopoly periods

Several comparative country studies that measured the impact of patent regimes on time to drug launch found that more stringent patent provisions accelerate the market entry of new drugs, [81–83, 85, 94] especially ‘blockbuster’ drugs [82, 94]. Some of these studies found this phenomenon to be true only for high income countries and not low- and middle-income countries [82, 83]. This could reflect simple profit maximising behaviour, focusing on more lucrative markets and more lucrative drugs. Conversely, two studies found that higher levels of IP protection were associated with lower access to medicines [85, 87]. Even in studies that showed a positive association between longer IP protection and new drug availability, the high price of the patented pharmaceutical product resulted in a net effect of significantly reduced sales [85]. Hellerstein also found that countries with largely originator drug markets were paying significantly more for ARV than generic supply countries [86]. Relevant here is an important finding of studies on generic entry - this results in significant price falls only when there is competition among generics [113]. The findings of two comparative patent studies contrasted markedly with the studies above. Rozek and Berkowitz find that ‘improving’ IP regimes does not change the prices of branded pharmaceutical products and that countries with ‘improved’ IP regimes do not have higher priced drugs than countries without [88]. ‘Improved’ IP in this instance was equated with stronger protection of IP, but the exact meaning of this was not defined. Further, there were inadequate controls for other relevant variables [88]. Djolov also found that strong patent protection was associated with better access to essential drugs [89]. In the Djolov study [89] the essential drugs are almost all off-patent and therefore unaffected by the strength of the patent provisions. The time period studied was not long enough to capture the impact of new patent provisions [89]. To more accurately measure the relationship between patent and prices, only new previously unpatented drugs introduced after the new product patent regime should be included in the analysis [114, 115]. The nine single-country studies that focused on the impact of stronger patents all found negative implications for access to medicines. Patents were found to cause significant welfare loss [90, 91, 93] and a rise in drug prices in India [92]. Supporting these findings, the availability of generics and me-too drugs led to consumer welfare gains [80]. The studies focused on India are particularly pertinent to understanding the impact of introducing patents for pharmaceutical products. India took full advantage of the 10-year transition period to introduce such patents [116]. Further, India designed its patent legislation to ensure that closely similar medical compounds could not be patented unless there is a new therapeutic benefit. Prior to this, Indian manufacturers were legally producing generic versions of many medicines under patent in other countries. The Indian patent regime has implications for access to medicines not only in India, but around the world as it may inhibit the production of generic medicines. India is the world’s biggest producer of generic medicines and accounts for more than 80% of ARV annual purchase volumes [117]. Although these studies focused on the Indian market only, pharmaceutical product patents in India could potentially curtail generic drug supply for many of the world’s poorest countries. TRIPS-plus rules - patent term extensions and secondary patents The articles that measured the impact of TRIPS-plus rules focused on patent term extensions and secondary patenting. Ten of the 13 TRIPS-plus studies were from North America, two were from Australia and one was a multi-country study that included the USA. All patent term extension studies found negative impacts for access to medicines which included increased government health care expenditure [99–103], increased drug prices [98, 100] and delays in drug availability [100]. Similarly, all articles examining secondary patents found negative impacts for access to medicines including longer monopoly periods that delayed the market entry of cheaper generics [19, 104, 106, 107], increased costs to taxpayers [109] and social welfare losses [107]. The only article that included a focus on resource poor settings found that measures to restrict secondary patenting had limited effectiveness in Argentina and no measurable impact in India and Brazil [110]. The authors suggest that administrative and procedural features of patent systems may be a greater influence on the grant of secondary patents than patent laws themselves [110]. Tackling this issue would mean addressing the kind of technical assistance provided to patent offices in lower- and middle-income countries [118]. This is a priority issue given the expense of challenging granted patents and the impact that longer patent durations could have on access to medicines in countries less able to pay high prices for medicines. Secondary patenting in India could have negative ramifications for countries that depend on India for affordable generic drugs.