Access to medicines.

• Author: Reinhardt, Erika

MEDICINES ACCOUNT FOR A MAJOR PROPORTION of health costs, especially in the developing world, where it is estimated that one third of the population is unable to receive or purchase essential medicines on a regular basis. Most trade in medicines takes place between wealthy countries, with the developing nations accounting for only 17 per cent of imports and 6 per cent of exports. Access depends on affordable prices and on rational selection and use of drugs. Prices, which are most affected by globalization, have direct implications, especially for developing countries, where 50 to 95 per cent of drugs are paid by the patients themselves.

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The sale of the same goods to different buyers at different prices, so-called differential pricing, aims to improve affordability of drugs while generating revenue for the pharmaceutical industry. This has reduced the cost in low-income countries of many antiretroviral (ARV) HIV/AIDS therapies by up to 90 per cent, even though they continue to be sold at market price in developed countries. Other means to increase affordability include generic substitution, promotion of competition and the use of safeguards compatible with the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Parallel importation and compulsory licensing are recognized as TRIPS public health safeguards against a patent holder charging excessively high prices in a particular market. TRIPS also extends the transition period, until 2016, in which least developed countries do not have to enforce or grant patents on pharmaceutical products.

While developing countries have several international trade law provisions on purchasing medicines at affordable prices for public health needs, they do not take advantage of the flexibilities built into the TRIPS Agreement to overcome patent barriers, which allow them to acquire medicines for high-priority diseases, particularly HIV/AIDS. One condition for issuing a compulsory license is that the patent holder receives adequate remuneration. However, TRIPS does not define what "adequate" means, giving countries some leeway and leaving them free to use either very strict or more flexible criteria for patentability. Applying flexible criteria of novelty and inventiveness enables the issuance of patents for formulations or isomers of known drugs, thus allowing pharmaceutical companies to apply for additional patents and expand the...