Patents and access to medicines

Switzerland and other countries which are home to big pharmaceuticals companies have advocated for them, exerting pressure to reinforce the protection of intellectual property on medicines at an international level. Since 1995, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization (WTO) obliges all states to grant patents on drugs for a period of 20 years, while allowing for flexibility to guarantee access to affordable medication.

Patents are an exception in a free-market economy,

as inventors benefit from a monopoly that allows them to establish the highest possible prices for their products (price-setting power) in exchange for divulging their invention, ideally for the benefit of society. The power conferred by a patent is considerable, which can lead to abuses, to prohibitive pricing or even barriers to progress.

Thanks to the patents system, pharmaceuticals companies enjoy a monopoly situation and exclusive commercial rights. They also benefit from a gross lack of transparency as they are not obliged to disclose the actual costs of research and development (R&D) required to develop the product. Pharmaceutical companies can therefore set the prices almost as they wish and maximize profits, to the detriment of patients.

AIDS and COVID exemplify the fight for access to medication

The issue of patents and access to medicines post-WTO clearly took centre stage with the HIV/AIDS crisis in the 1990s and 2000s. In the face of this pandemic, countries such as South Africa have been forced to take urgent measures around patents to stem the progression of the disease. These measures have often been challenged before the courts by the pharmaceutical industry as being contrary to their economic interests.

This desire to maximize profits at any cost sparked public outrage. It also triggered some reflection in political circles about the problem of access to medication, giving rise to discussions, in particular about the issue of the price of antiretrovirals (treatments for AIDS). While most of the patients with this condition live in the economically poorer countries, for a long time new treatments were inaccessible to them. The reason: the prohibitive cost due to patents.

Thanks to the advent of generic drugs, the price of treatment has gone from $10,000 per year to less than $100. This drastic price reduction has made it possible to massively increase the number of people under antiretroviral treatment in the world (2 million in 2005 compared to over 30 million in 2023).

Price is a crucial factor for poor countries whose healthcare budgets are limited and where the frequent absence of a health insurance system requires patients to pay for the drugs out of their own pocket. This situation is also an important factor in rich countries, as it can result in decisions on rationing and undermine universal health coverage.

The coronavirus pandemic has also highlighted the obstacles posed by intellectual property, in particular patents. Given the limited production capacity when faced with global demand for anti-COVID vaccines, treatments or diagnostic tests, it would have been necessary to multiply and decentralize production sites to allow fair access. However, patents and other trade secrets related to technologies have prevented this massive relocation. Worse still, the countries that are home to the big pharmaceutical companies have done their utmost to block a temporary intellectual property waiver at WTO level (“TRIPS waiver”), requested in October 2020 by South Africa and India and widely supported by more than 100 low- and middle-income countries, international organizations such as the WHO or civil society.

What is a patent?

A patent is an exclusive right granted by governments for an invention, which prevents third parties from using it for professional purposes. The “use” of such a patent includes, in particular manufacturing, storing, sale and distribution, as well as import, export, transmission and possession to such ends for a limited period, generally of 20 years from the date when the patent is filed.

However, a patent only has territorial validity. If a pharmaceutical company wants to protect its drug in several countries, it will have to apply for it in each of them – an exception being Europe, which has the European Patent Office (EPO) bringing together 39 countries, including Switzerland, and having a centralized procedure that applies simultaneously in all these jurisdictions.

To be patented, the invention should:

1. possess an innovative element when compared with the sum of current knowledge and/or expertise.

2. imply an “inventive activity” or be “non-evident” to a fellow professional.

3. be able to be used in industrial applications.

A patent for a drug is therefore not judged on the basis of its public health benefit – only the fact that it is a “new invention” is taken into account, even if it is only a minor modification of the same product and does not provide any real therapeutic added value.

When patents expire on a product (there are usually several), the protection ends and the invention enters the public domain; in other words, it can be freely used by third parties without fear of infringing the patent(s).

The TRIPS agreement validates a model based on patents…

To understand the current debate on research and access to medication, it is necessary to go back to 1995 when the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) came into force. This international treaty obliges the member countries of the WTO (166 in 2024) to grant patents for all technologies, including therefore new drugs – which a number of countries, such as India and Brazil, did not do previously, not to mention Switzerland up until the 1980s. This agreement represented an important victory for the pharma giants, allowing them to sell their new patented products at a high price to a minority of wealthy patients in low- and middle-income countries.

…instead of championing innovation

The TRIPS Agreement primarily serves the interests of the pharma giants, as the monopoly resulting from patents guarantees high prices in the long term. In their argument in favour of such an agreement, the pharmaceutical companies submitted that this extension of patents would enable the new products to make a profit, while encouraging research and development (R&D).

However, the reality is quite different: patents do not favour innovative research, but are intended instead to protect investments and profits. They act as a brake on R&D and exacerbate the problem of access to medicines.

This is because a new drug is not protected by a single patent but by dozens of them, sometimes by even more than a hundred patents, which are then called “patent thickets”. These are also filed over a period of time, which means that the duration of a product’s monopoly often largely exceeds the theoretical 20 years provided for by the WTO Agreement (TRIPS). A practice of endlessly accumulating patents described as “evergreening”.

A distinction should be made between primary patents, relating to the substance(s) and filed early in the development phase, and secondary patents filed just before or during the marketing phase, which extend the period of commercial exclusivity but without any real therapeutic added value. While any patent is an exception to the free market, secondary patents are undoubtedly the ones that have the most impact on competition and prices – especially since they have proliferated in recent years, particularly in the United States, where they are more easily granted.