Article April 20, 2016

Pharma Philanthropy?

The efficacy and morality of pharmaceutical patents is likely the most vexed question in intellectual property. Critics of the patent system argue that granting pharmaceutical companies monopolies on drugs allows them to charge inflated prices which bar access to drugs for those who need them most.

Pharmaceutical companies rebut this with hard-nosed financial justifications, arguing that drug discovery is an enormously expensive process, billions are spent on drugs that never make it to market, and the temporary monopoly is necessary to encourage investment in new drugs. Pharmaceutical behemoth GSK has, perhaps in response to these criticisms, changed its patent policy to allow cheaper generic drugs to be sold in developing countries. So far, the drugs company has compiled a list of 50 countries with a combined population of almost 1bn, where it says it will not file for patents in the future. In addition to not patenting future drugs in these territories, the company will submit all its patents to the medicines patents pool.

A cynical observer might suggest that GSK’s policy change is a well timed intervention as legislative and public attitudes towards patents harden; patent trolls and soaring rates of litigation have put patent reform high on the legislative agenda. Regardless of their motivations, this move will likely benefit millions in developing nations and may well set a precedent for other drugs companies to do the same.

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