TNNNobel laureate for economics Joseph Stiglitz has strongly argued against US pressure on India’s intellectual property regime. Stiglitz, along with his colleagues Dean Baker and Arjun Jayadev, spoke on the controversial issue of patents and public interest in India
You say patents stifle innovation. How do they do that?
If patent rights are too strong and maintained for too long, they prevent access to knowledge, the most important input in the innovation process. In the US, there is growing recognition that the balance has been too far tilted towards patent protection in general (not just in medicine). The growing problem of patent trolls is an example. Firms have to maintain a buffer to protect themselves against lawsuits by patent owners who may never have intended to produce a product at all.
Given India’s limited health budget, would US-style IP protection support its public health goals and needs?
India has already increased patent protection on medicines relative to a few decades ago by acceding to TRIPS (Trade-Related Aspects of Intellectual Property Rights Agreement). Greater IP protection for medicines would, we fear, limit access to life-saving drugs and seriously undermine the very capable indigenous generics industry that has been critical for people’s well-being in not only India but other developing countries as well. The government would face impossible choices: spending more money to provide drugs that people need for survival at the exorbitant prices charged by the drug company, and thus taking away money that could be used for education or other developmental objectives, or letting people die.
Are Americans also affected by the US patent system?
Yes. A prominent example is of Myriad Genetics that isolated and patented two human genes that can contain mutations that predispose women who carry them to breast cancer. Information about whether you carry the gene is critical for early detection and prevention. The patent allowed it the right to prevent others from testing for these genes. Although the test can be done very cheaply, women were unable to do so at an affordable price because of the patent. Some would surely die because of this or others be severely financially penalized for simply finding out whether something they actually ‘own’ (their own genes) is present in their body because it is the property of a corporation.
How would India be hit by adopting data exclusivity, as sought by the US?
Data exclusivity is in many ways a stronger form of monopoly protection than patents. It prohibits drug regulators, while approving generic medicines, from relying on prior clinical test results showing that a drug is safe and effective. A generic producer wanting to get its drug approved during the period of exclusivity (which could be from 5-12 years if the US government gets its way) would have to perform its own clinical trials which is both expensive and unethical. The effect of data exclusivity will be higher prices, extended monopoly protection for patented drugs and possibly monopolies for off-patent drugs. High prices also give drug companies more incentive to misrepresent the safety and effectiveness of their drugs. While pharmaceutical companies may claim that it would give them a greater incentive to research new drugs, such R&D is unlikely to be directed at public health needs of developing countries and any hypothetical gains will likely be dwarfed by the additional costs of delayed generic competition.
Whose interest does the US trade representative serve when it pressurizes India to adopt stronger IP rights?
Clearly, the direct beneficiaries are the US pharmaceutical industry. It can be argued that by increasing industry profits there will be more incentive to innovate, but this chain of causation is weak at best. This is about profits of Big Pharma — not jobs, innovation or health.
What is the danger in India signing bilateral trade pacts with developed nations or joining mega-FTAs like the Trans-Pacific Partnership Agreement?
The biggest problem is the lack of transparency. After being negotiated largely behind closed doors, these agreements will be brought out for national parliaments to approve on an all-or-nothing basis. The worst provisions are those related to IP and “investment protection”, which pose a risk for regulations intended to protect health, the environment, workers, and consumers.
You say patents stifle innovation. How do they do that?
If patent rights are too strong and maintained for too long, they prevent access to knowledge, the most important input in the innovation process. In the US, there is growing recognition that the balance has been too far tilted towards patent protection in general (not just in medicine). The growing problem of patent trolls is an example. Firms have to maintain a buffer to protect themselves against lawsuits by patent owners who may never have intended to produce a product at all.
Given India’s limited health budget, would US-style IP protection support its public health goals and needs?
India has already increased patent protection on medicines relative to a few decades ago by acceding to TRIPS (Trade-Related Aspects of Intellectual Property Rights Agreement). Greater IP protection for medicines would, we fear, limit access to life-saving drugs and seriously undermine the very capable indigenous generics industry that has been critical for people’s well-being in not only India but other developing countries as well. The government would face impossible choices: spending more money to provide drugs that people need for survival at the exorbitant prices charged by the drug company, and thus taking away money that could be used for education or other developmental objectives, or letting people die.
Are Americans also affected by the US patent system?
Yes. A prominent example is of Myriad Genetics that isolated and patented two human genes that can contain mutations that predispose women who carry them to breast cancer. Information about whether you carry the gene is critical for early detection and prevention. The patent allowed it the right to prevent others from testing for these genes. Although the test can be done very cheaply, women were unable to do so at an affordable price because of the patent. Some would surely die because of this or others be severely financially penalized for simply finding out whether something they actually ‘own’ (their own genes) is present in their body because it is the property of a corporation.
How would India be hit by adopting data exclusivity, as sought by the US?
Data exclusivity is in many ways a stronger form of monopoly protection than patents. It prohibits drug regulators, while approving generic medicines, from relying on prior clinical test results showing that a drug is safe and effective. A generic producer wanting to get its drug approved during the period of exclusivity (which could be from 5-12 years if the US government gets its way) would have to perform its own clinical trials which is both expensive and unethical. The effect of data exclusivity will be higher prices, extended monopoly protection for patented drugs and possibly monopolies for off-patent drugs. High prices also give drug companies more incentive to misrepresent the safety and effectiveness of their drugs. While pharmaceutical companies may claim that it would give them a greater incentive to research new drugs, such R&D is unlikely to be directed at public health needs of developing countries and any hypothetical gains will likely be dwarfed by the additional costs of delayed generic competition.
Whose interest does the US trade representative serve when it pressurizes India to adopt stronger IP rights?
Clearly, the direct beneficiaries are the US pharmaceutical industry. It can be argued that by increasing industry profits there will be more incentive to innovate, but this chain of causation is weak at best. This is about profits of Big Pharma — not jobs, innovation or health.
What is the danger in India signing bilateral trade pacts with developed nations or joining mega-FTAs like the Trans-Pacific Partnership Agreement?
The biggest problem is the lack of transparency. After being negotiated largely behind closed doors, these agreements will be brought out for national parliaments to approve on an all-or-nothing basis. The worst provisions are those related to IP and “investment protection”, which pose a risk for regulations intended to protect health, the environment, workers, and consumers.
