Drafts:Manifesto 2010/Pharmaceutical patents
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Current documents are draft copies yet to be ratified by the party though a vote and finalised by party members.
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(This is largely taken from http://www.pirateparty.org.uk/wiki/Drafts:Manifesto_2010/Copyright from the Swedish Pirate Party)
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Pharmaceutical patents
Patents on drugs, or pharmaceutical patents, have many negative effects.
- Pharmaceutical patents prevent hundreds of thousands of people in poor countries from receiving the drugs they need, even though the drugs exist and could save their lives.
- Pharmaceutical patents distort the pharmaceutical research priorities, since it becomes more profitable to treat the symptoms of diseases that come from a high standard of living, than to cure poor people from malaria.
- Pharmaceutical patents continue to lead to ever increasing costs for drugs in the United Kingdom and Europe, outside any form of political control
Are pharmaceutical patents necessary?
Despite all these negative effects, there are many people who defend pharmaceutical patents, and say they are nevertheless necessary. They say that:
- Pharmaceutical research is very expensive, so we have to make sure it is properly funded. Otherwise we wouldn't get any new drugs in the future, and that would be even worse.
- Because it is so easy for anybody to copy a pharmaceutical substance that has cost billions in research money to develop, we unfortunately have to let the pharmaceutical companies have monopolies on new drugs, those who defend pharmaceutical patents say.
But that is not true.
The first part of the argument is of course valid. One way or another we have to make sure that there is serious money available for pharmaceutical research.
But the claim that pharmaceutical patents is the only conceivable system for raising that money, is simply not true.
The government pays for the research today
Today it is already the public sector (henceforth called "the government") that pays for the bulk of all drugs that are used in Europe, thanks to various systems for universal medical coverage. (See for example page 37 in this report from EFPIA, The European Federation of Pharmaceutical Industries and Associations.) It is the government that pays for the pharmaceutical research today, by paying high prices to the pharmaceutical companies for patented drugs.
Since "the government" in the different countries is funding the research anyway, why not do it directly, and make the results freely available? This would be at least as reasonable as today's model, where the government instead creates and maintains private monopolies for the pharmaceutical companies. It would also save vast amounts of money due to reduced distrotions of the market, and reduced bureaucracy. But considering that "the government" already provides most of the income for the pharmaceutical companies, a reasonable first step would be to find out how much of that income actually goes to research.
Fortunately, this is very easy to do, as all the big pharmaceutical companies have their annual reports available online. As an example, we can look at the numbers for Novartis (page 143), Pfizer or AstraZeneca.
They all spend around 15% of their revenues on research. The other 85% go to other things, according to their own figures. The numbers are typical for the industry.
So the question is: does the patent system really give us, the taxpayers, the maximum amount of pharmaceutical research for the money we are spending on drugs? Or is there room for improvement, when even the pharma companies themselves admit spending 85% of the money we give them on other things?
If the government would instead take 20% of what it currently spends on drugs, and allocate it directly to pharmaceutical research, there would be more money than today for the research. If the results are made freely available, the pharmaceutical companies would be able to produce modern drugs without spending any money on research themselves. All that would remain for the government would be to pay for the actual substances.
Patent free drugs are cheap
How would it affect the price of drugs if there were no pharmaceutical patents? To answer this question, we can look at the experience we have from patent free generic drugs. In that market segment we already have a situation where different (private) manufacturers of the drugs compete with each other, and the government buys from from cheapest and best ones.
And it works!
According to a report from the Swedish Food and Drugs Administration (pdf in Swedish), the price for drugs dropped on average 70% when they became free of patents (page 13 in the pdf).
In the case of generic drugs we are talking about drugs that are more than 20 years old. For newer drugs the pharmaceutical companies add an even greater surcharge, so the actual savings if pharmaceutical patents are abolished would almost certainly be considerably more than 70%. But let us still be conservative and use that number.
Half the cost, more money to research!
The price for a substance will then drop to 30% if we get rid of the patents. Add 20% to fund future research according to the proposal presented here, and we have reduced the government's bill for drugs to 50% of what it is today.
We would thereby cut the cost in half, and still give more money to pharmaceutical research.
Realistic on the European level
An obvious counterargument would be that this is not something that the UK alone could reasonably do. This is true. But on the European level it is quite doable.
The Pirate Party's position
The Pirate Party wants to abolish pharmaceutical patents as a long term goal, but realizes that this requires alternative systems for funding pharmaceutical research. We believe that the introduction of a new system should be done on the European level. We urge the UK government to study the effects of different alternative system, such as the one proposed here, and to take initiatives to put the issue on the European political agenda for discussions.