Free trade: The problem with patents
“The battle over ‘intellectual property rights’ is likely to be one of the most important of this century,” says Mark Weisbrot of the Center for Economic and Policy Research. Patents and other intellectual property rights (IPR) leave millions of people around the world without medicine by driving prices out of reach. Due to the increasing effects of climate change – higher sea levels, longer droughts, warmer temperatures -- IPR issues will become even more important in determining if countries and communities will have access to new technologies that could save lives and alleviate suffering.
From the perspective of the global North, one of the principal reasons for “free trade” agreements is to ensure the strongest IPR laws possible. Yet “the economic argument for relaxing patent rules is… the same as that for removing trade barriers, only times 50 or 100, or even 1,000,” according to Weisbrot, because the extra costs created by patents are many times larger than the costs from tariffs, quotas or other trade barriers.
Trade agreements with strong IP laws significantly affect people in participating countries. Enacted in late 2001, the U.S.-Jordan free trade agreement drastically changed access to medicines in Jordan. According to Oxfam, it “has delayed generic competition for 79 percent of medicines newly launched by 21 multinational pharmaceutical companies between 2002 and mid-2006.” Also, “[n]ew medicines to treat diabetes and heart disease cost anywhere from two to six times more in Jordan than in Egypt” which has no free trade agreement with the U.S. These high costs come in the context of an already overtaxed Jordanian health care system. Pope Benedict XVI summed up the problem of IPR measures in trade agreements in his recent encyclical, Charity in Truth: “On the part of rich countries there is excessive zeal for protecting knowledge through an unduly rigid assertion of the right to intellectual property, especially in the field of health care.”
Intellectual property rights will become even more crucial as climate change increases and technologies to reduce carbon gas emissions and adapt to changing weather and scarce resources are developed. Countries most affected by climate change are almost exclusively technology importers. We must find ways to continue to encourage the innovation they need, but also need to ensure that IP laws are not unnecessarily restrictive and costly.
Current IP laws lead to a host of factors that make technologies more expensive to end users. In the area of medicine, the Pharmaceutical Manufacturers and Researchers of America estimate that an incredible 70 percent of research spending in the U.S. is for “copy cat” drugs that serve the same purpose as an already existing patented medicine, but with a technical difference that allows a new patent. With an alternative system, this redundant research could be used instead to develop new drugs. The patent system encourages other inefficiencies such as increased spending on sales and marketing; no sharing of scientific findings until a product is patented which slows development of technologies; huge legal costs defending patents; and massive spending on political lobbying to protect and expand patent monopolies.
Luckily a number of effective alternatives to monopoly-creating patents and copyrights exist. Rep. Dennis Kucinich (D-OH) proposed a plan, codified in the Free Market Drug Act of 2004, that would establish publicly funded research centers, both in and outside of universities, financed with the same amount of money currently spent on research, approximately $25 billion a year. The government currently pays for only half of that amount, but savings from the plan would more than cover the additional money coming from public coffers. By requiring that all medicines developed in these centers be open to the public and priced as generics, the plan would drastically reduce the costs of medicines – an estimated $130 billion in savings annually. In addition, scientists’ decisions would made based on the greatest public need instead of potential profitability. Finally, research results would also be made public thus encouraging more innovation. IP expert James Love has a similar proposal funded by mandatory employer-based research fees.
Today’s growing need for technologies to diminish and adapt to climate change calls for a reevaluation of our intellectual property rights structure. The current system of government-mandated monopolies through patents, copyrights and other tools must be reconsidered in order to establish a new arrangement that encourages innovation while providing affordable technologies to all.