Tuesday, 17 August 2010

Life before Profits.

In most of the developed world, we have come to a common consensus that health care is a human right. People deserve to free from the fear that accident or illness could cripple them financially even if it doesn't end up killing them first. Through this approach it actually works out to be cheaper to keep people healthy, as money comes back in the form of what that person can earn as a result of being in work. Health care is the major proof of the fact that some things just don't do well at the mercy of the markets. Yet in another crucial area of medicine we don't seem to be learning the same lessons. Right at this moment, millions of people are dying because they can't afford the drugs that would keep them alive, and it doesn't have to be this way.

Here's how things work at the moment. A new drug can be very difficult to create indeed. Much of the initial research takes place in universities and research foundations, before a major drug company comes onto the scene and buys the rights to all the research that has been done. The drug company can then put its vast resources into paying for the costly but mostly uncreative part of the manufacture including buying the starting chemicals and paying for the vast trials. Once a drug has been made and shown to work the company can apply for a patent. Once this has been approved that company has complete monopoly over its manufacture for 20 years. For those 20 years no-one can make the drug without permission, regardless of how much cheaper or more efficient they claim they can make it.

The downside of this should be clear. With a monopoly on anything a company can jack prices up as much as they please, and drugs are no different. Most of the world who would most benefit from the drug miss out because they simply can't afford it. Some drugs are given at cheaper prices to the developing world in an attempt to gain some good publicity but this only happens some of the time, and not nearly enough to stop millions of needless deaths.

The argument for the status quo is made by the major companies and they pay a heavy price to keep politicians on their side. They argue, rightly, that making a drug is costly, many drugs that have investment poured in fail to make it to patent and that without the promise of profits there won't be any companies willing to invest in manufacturing new drugs. This is all true, but assumes that there are no other ways in which we could produce new drugs, and big pharma would like to keep it that way. I'm going to suggest two, either would be a huge improvement and save millions of lives, its up to you to decide whether you think its worth the cost of slightly less money flowing into the pockets of CEO's.

The first is supported by Medicins Sans Frontiers, an international aid organisation which has been struggling for years to provide the drugs it needs to to save lives. Their idea is the creation of a patent pool, which would need all companies to participate, but could solve multiple problems in one fell swoop. What would change is that drugs would continue to be developed by researchers and big pharma, but when it came to patenting, the company would hand the patent into the hands of the patent pool. This patent pool would act as a one-stop shop for developers and researchers who wanted to create cheaper generic versions of the drug or who wanted to combine the drug with others such as is needed in HIV treatment. Every time someone used a patent they would pay a set royalty to the drugs company to pay for its development. With many people coming in to produce cheaper versions the competition would soon drive down prices to a level that was affordable to the poor.

The second has been suggested by Nobel prize-winning economist Joseph Stiglitz, it consists of a multi-national prize fund which rewards researchers whose drug's do the most good. It would mean that many nations come together and all contribute to a prize fund (about 0.6% of GDP each) which awards cash to researchers who develop new drugs. The more effective the drug, the more money is awarded. No patents would be needed as the researcher has already been rewarded and so cheaper generic versions could be quickly developed and drive down prices for the poor. The countries contributing to the fund would gain through the reduction in prices as their health care costs plummet. Another bonus of this system is that it addresses one more of the major problems with the current system, the fact that illnesses that mainly affect the poorest are not likely to be big money-spinners and so are neglected. This fund wouldn't discriminate by ability to pay, and so would reward researchers producing drugs which help those most in need.

Both have many merits in my opinion, but we need more than just ideas, we need action. It won't be easy to overturn the pharmaceutical companies iron grip on its cash flow, but the whole world will benefit if we succeed.

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