India’s Efforts to Aid Poor Worry Drug Makers
American trade officials have voiced concerns about India’s treatment of drug patents, including its reasons for sometimes overriding them. President Obama discussed the issue this year with Prime Minister Manmohan Singh of India in the Oval Office, administration officials said.
Executives in the international pharmaceutical industry, increasingly dependent on drug sales in emerging markets like India, China and Brazil, contend that India’s efforts to cancel patents threaten the global system for discovering cures (...) [*]
For drug companies, the most worrisome aspect of India’s efforts to lower drug prices is that other countries are beginning to follow its lead. Both Indonesia and the Philippines recently adopted patent laws modeled on India’s, and legislators in Brazil and Colombia have proposed following suit.
Even insured patients in the United States may wonder why they are making thousands of dollars in co-payments if these medicines cost far less in India. Treatment with Herceptin is even more expensive in the United States, so even Medicare patients must make thousands of dollars in co-pays.
For the Obama administration, the fight over drug patents in the developing world is a minefield. The drug industry was a major contributor to Mr. Obama’s campaign and an early and crucial backer of his health care program. But Mr. Obama’s advisers hope to avoid the mistakes of the Clinton administration, which was harshly criticized by AIDS activists for its initial stand against providing generic antiretroviral drugs to Africa.
[*] Sur cette affirmation, un article qui affirme le contraire (via Dean Baker)
The initial eruption of small and large innovations leading to the creation of a new industry – from chemicals to cars, from radio and TV to personal computers and investment banking – is seldom, if ever, born out of patent protection and is, instead, the fruits of highly competitive-cooperative environments. It is only after the initial stages of explosive innovation and rampant growth end that mature industries turn toward the legal protection of patents, usually because their internal grow potential diminishes and the industry structure become concentrated.
A closer look at the historical and international evidence suggests that while weak patent systems may mildly increase innovation with limited side-effects, strong patent systems retard innovation with many negative side-effects. Both theoretically and empirically, the political economy of government operated patent systems indicates that weak legislation will generally evolve into a strong protection and that the political demand for stronger patent protection comes from old and stagnant industries and firms, not from new and innovative ones. Hence the best solution is to abolish patents entirely through strong constitutional measures and to find other legislative instruments, less open to lobbying and rent-seeking, to foster innovation whenever there is clear evidence that laissez-faire under-supplies it.
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