Restructuring Incentives for Pharmaceutical Innovation

Abstract

The Agreement on the Trade Related Aspects of Intellectual Property Rights (“TRIPS”) was a landmark event in the efforts for global harmonization of intellectual property standards. The TRIPS marked a significant departure from the status quo in many member countries that had till then denied product patents to pharmaceuticals. Though developing countries have since amended their patent laws to comply with the TRIPS mandate, the process of reform is ongoing. An emerging area of reform is to restrict the patentability of pharmaceuticals that do not offer therapeutic benefits as compared to known drugs. This article analyzes whether reform with respect to such drugs is warranted and if so, whether patent law is the appropriate model for such reforms. The paper concludes that while a balanced restructuring of incentives in pharmaceutical innovation is needed, the patent system is not an appropriate model for carrying out these reforms.