July 18, 2005
A fierce dispute is raging over global pharmaceutical patents.The debate centers on a fundamental tension between pricing and incentives. Patents may raise the prices of pharmaceutical drugs paid by governments and onsumers in poor countries, depriving millions of sick people access to medicine. Yet patents may also provide incentives for corporate investment in research on lifesaving drugs. Missing from the debate is an understanding that the costs and benefits of pharmaceutical patents vary with the characteristics of different drug markets. The incentives to invest in research on "global diseases" that are prevalent in developed and developing countries are very different from the investment incentives for diseases that primarily affect developing countries.A rational patent system would differentiate the extent of protection given to products in accordance with their extremely different global markets and existing research incentives. I present here a proposal for constructing such a global patent regime, which could be a reasonable compromise to the current bitter dispute. It allows the right line to be drawn between prices and incentives because different lines can be drawn for different products.
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