Study asserts link between stronger patent protections and healthcare costs

by Leo Almazora17 Oct 2016
A new book penned by several industry-leading authorities has found that stronger patent protection for drugs and medical devices worldwide could lower costs in Canada, spur innovation, and save lives.

The editor of the new publication Intellectual Property Rights and the Promotion of Biologics, Medical Devices, and Trade in Pharmaceuticals was Steven Globerman, a senior fellow at the Fraser Institute and Kaiser Professor of International Business at Western Washington University. “Stronger patent protections would encourage the development of new drugs and medical devices, which could improve and even save the lives of Canadians," he explained.

Small and developing countries currently find and exploit weaknesses in intellectual property rights (IPR) laws, including those covering patents, to produce or procure generic pharmaceutical drugs and medical devices more cheaply.

This drives the original innovator companies to attempt to recover their significant research and development costs by charging higher prices to patients and healthcare systems in developed countries such as the U.S. and Canada.

One policy workaround recommended by the book, at least until stronger patent protections are set up around the world, is to streamline cross-border regulations for pharmaceutical products, which should help reduce prices for patients and healthcare systems.

Trade policy could also be useful in bolstering patent protection for drugs and medical devices, as is the case for the Trans-Pacific Partnership. Unfortunately, rising protectionist sentiment from the U.S. and other countries is putting the future of the TPP in question.

The issue of weak IPR protections can especially impact the emerging field of biologics, which involves the genetic engineering of living cells. Development in this field can cost 22 times more than for non-biologic drugs, which means those who invest in such potentially life-saving innovations need a stronger guarantee of recovered investment through stronger protections.

"Emerging technology offers great promise for life-enhancing and life-extending new drugs and medical devices, but companies must be rewarded for the substantial costs and risks of developing these products or we may see less innovation and development as a result," said Globerman.

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