Stronger patent laws can save lives in the developing world

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Why don’t Canadians, Americans or Europeans fear rabies, leprosy or malaria?

These diseases exist and a few cases are reported every year. But some people are so confident they’ll never get rabies, for example, that they feed raccoons in Vancouver’s Stanley Park by hand. Generations ago, malaria and leprosy were prevalent in Southern Europe.

These diseases still afflict many in less-developed countries. Almost one year ago, the secretary-general of the United Nations convened a High-Level Panel on Access to Medicines. According to the World Health Organization (WHO), 1.7 billion people in 185 countries needed treatment for neglected tropical diseases in 2014.

The panel recently submitted its report, in which it identifies the wrong culprit in the ongoing health catastrophe in the developing world. The report concludes patents, which protect the intellectual property of those who develop new medicines, are to blame for the continued suffering of ailments long banished from developed countries.

There’s no evidence supporting the panel’s claims. In an article published earlier this year in the American Economic Review, Prof. Iain Cockburn of Boston University, and colleagues, examined the timing of launches of 642 new drugs in 76 countries during 1983 through 2002. Their analysis shows price regulation delays launch, while longer and more extensive patent rights accelerate it.

In other research looking specifically at one country with weak patent protection for new medicines, Cockburn and a colleague examined when the 184 new medicines approved by the U.S. Food and Drug Administration between 2000 and 2009 became available in India. It took more than five years for half of those drugs to become available there, after having been approved in the United States. Ten years after being launched in the U.S. or elsewhere, almost one quarter of the new medicines were still not available in India.

Further, the WHO publishes a list of “essential medicines,” which it defines as “those drugs that satisfy the health-care needs of the majority of the population.” Updated every two years, 95 per cent of the drugs on the list are not patented.

The problem is not in the current medical R&D system. Rather, developing countries suffer from a lack of economic freedom, which the Fraser Institute has measured for years. Economic freedom leads to income growth, which reduces the burden of many illnesses even without medical intervention. The U.N. should encourage developing countries to adopt policies—including laws protecting intellectual property—that will increase their citizens’ economic freedom, incomes and health.