Seven Roadblocks to Establishing Sustainable Innovation Policies for Pharmaceuticals Post-TRIPS

Abstract

While the trade policies of TRIPS and, in particular its strong protection for intellectual property rights in the pharmaceutical sector, continue to drive health costs upwards, potential regulatory doctrines aimed at reducing those costs often remain underutilized or ineffective. This chapter briefly examines seven “roadblocks” that stand in the way of creating effective competitive regulatory mechanisms for controlling pharmaceutical prices in a manner that supports socially just, sustainable innovation. It rejects the “easy” policy solution of price control, achieved through such mechanisms as direct price control regulations, caps on patient costs under health care plans or similar narrowly price-focused alternatives, and argues that price regulation, without regard to its impact on the needs for assuring sustainable innovation, is a recipe for future disaster.

Yet efforts to create sustainable and socially just mechanisms to assure reasonable access to medicines may falter as a result of seven often underutilized or inadequately-considered roadblocks. These roadblocks include quick fixes such as compulsory licenses and grey market reforms without consideration of sustainable innovation needs; failure to deal effectively with the lack of transparency in R&D and drug pricing protocols; hidden competitive barriers unrelated to the pharmaceutical sectors; the positive and negative impacts of Artificial Intelligence on the pharmaceutical costs and drug pricing; the mirage of differential pricing solutions; and the illusion of calm created by proposed industry self-regulation. It suggests potential steps to take to reduce these barriers in order to begin the critical process of reform now.

The task of creating a system that supports sustainable innovative development – one that assures both reasonable access to current medical treatments and R&D support for future innovations, including, but not limited to, rational intellectual property protection for the results of such innovation – is not an easy one. This chapter is a modest effort to provide some potential pathways toward that goal.

Keywords: Public Health, Access to Medicines, Intellectual Property

JEL Classification: I118, K32, O34, K33