View on Private Sector: Pharma shift won’t help poorest

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Copyright: Dieter Telemans / Panos

Speed read

  • Most nations GSK will exempt from patents lack capacity to make drugs
  • Move may be attempt to avoid more significant reform
  • State intervention still needed to improve drug access

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British pharmaceutical giant GlaxoSmithKline (GSK) announced last week that it would stop filing patents in the world’s poorest countries, opening the door to manufacturers in the developing world who wish to copy GSK drugs and sell them at lower prices.

The high cost of prescription drugs is a major development challenge. Historically, poor countries have addressed it by purchasing generic drugs made in middle-income countries such as Brazil and India, which can sell these through a loophole in World Trade Organization patent law.

Pharmaceutical firms have fought for years to have this loophole closed and their patents enforced globally. Nonprofits such as Médecins Sans Frontières (MSF) have campaigned to reform patent rules that protect drugmakers in the global South. So is GSK’s move a victory for campaigners?

“We don’t think this is a very bold announcement,” Rohit Malpani, director of policy and analysis for MSF’s Access Campaign, tells me. “We have been saying for years that cost [of drugs] is a barrier to access, and the pharmaceutical industry has been saying it isn’t. This is an acknowledgement from GSK that this is an issue, but that’s not really a victory.”

Instead, he says, the announcement is a response to changing politics. Historically, rich governments helped pharmaceutical firms based in their countries to defend their patents abroad. But rising drug costs are also problematic for poor populations within rich countries — not just poor countries — and growing cost pressure on Western healthcare systems has prompted new interest in medical patent reform. This includes the formation of a UN panel on access to medicines, and a call by French President François Hollande to include drug access for discussion at G7 and G20 summits.

“We have been saying for years that cost [of drugs] is a barrier to access, and the pharmaceutical industry has been saying it isn’t. This is an acknowledgement from GSK that this is an issue, but that’s not really a victory.”

Rohit Malpani, MSF

Malpani believes that GSK’s loosening of patent control in poor countries may be an attempt to get ahead of the political process to thwart more significant reform and safeguard its core intellectual property interests: developed world patents.

And he points out that the details of GSK’s proposal leave much to be desired. The policy will only exempt the very poorest countries from patent enforcement, but such countries often lack the capacity to make drugs so pharma companies have filed few patents there, if any. So it’s unclear what difference it will make.

Malpani also cautions that GSK’s measure of which countries are ‘least developed’ relies on World Bank data about gross national product per person. But this metric, like most metrics of economic development, does not necessarily correlate with medical access because it does not take into account the state of a country’s health infrastructure or the ability to pay for drugs. Malpani suggests that using any single measure of development to make decisions about drug access — a problem that is not simply about poverty — is unlikely to succeed.

And, indeed, with the long timeframe involved in drug development, it’s unclear whether the countries currently classed as least developed will still qualify when GSK’s next round of new drugs reach market.

Ultimately, it is governments that must intervene to make real progress on drug access, Malpani says. “The pharmaceutical industry is reliant on government for every stage of its life, from patents to authorising clinical trials,” he says. “Even if they have a lot of power and can dominate the thinking in government, governments have many tools to change the power dynamic and the relationship between the two. And we hope that as the situation [on pricing] becomes more intractable, governments will look to do that.”

Maha Rafi Atal is a PhD candidate at the University of Cambridge, United Kingdom, where she is researching the political effects of multinational firms acting as public service providers in the developing world. She was previously a journalist, including at Forbes, where she covered the intersection of business, development and international affairs. You can contact her on mra42@cam.ac.uk or follow her on Twitter: @MahaRafiAtal