International think tank policy dialogue on health, trade and innovation

03 October 2018
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On 25 September think tank leaders from across the globe met in Bogota, Colombia to provide their perspectives on the policies and institutions required to promote and foster innovation in developing countries. The consensus reached by conference delegates was that innovation fundamentally depends on the protection of ideas. Without basic intuitions such as the rule of law and the recognition and promotion of property rights – including intellectual property rights – there would be no economic incentive to bring products and services to market since there would be no laws that prevent anyone else from stealing your property and ideas.

 

Many developing countries are realising basic manufacturing, commodities and agriculture as a basis for economic progress and development and recognise that knowledge, innovation and technology are the drivers of progress, growth and wealth. For developing countries aspiring to transition from being predominantly resource-based to one based on knowledge and ideas it is critical they adopt policies that allow innovative sectors such as biotech, chemicals, entertainment and pharmaceuticals to flourish. For these sectors to take root and grow, a robust intellectual property rights regime is essential. Innovators and creators need to be able to secure their investment in developing their creations or they do not create. They will not invest in commercialising and bringing products to market if these can be freely stolen and copied.

 

Innovation in medical technologies specifically, over the past five decades, has given scientists access to powerful tools to develop new procedures and drugs that have resulted in unprecedented advancements in human longevity. World-wide, life expectancy at birth has increased dramatically from an average of 53 years in 1960 to an average of 72 years in 2016. There can be no doubt as to the extraordinary benefits that advances in medical innovations have conferred upon humanity — helping people live longer, healthier and happier lives.

 

Despite these dramatic advancements, critics of intellectual property rights (IPRs) contend that they inhibit access to medicines and seek to increase the scope and use of policies that weaken IPRs, for example, by expanding the use of compulsory licences. However, the evidence is that patents are not a major barrier to access to medicines as over 95% of the drugs on the World Health Organization’s (WHO) essential medicines list (EML) are off-patent. Critics of the patent system presuppose the existence of innovative new medicines since innovative pharmaceutical drugs form the life-blood of the generic drug pipeline and without them there can be no generics. IPRs provide the necessary window of opportunity for innovative drug companies to earn a return on the substantial investment required in the production of each new drug.

 

Intellectual property laws are only one of the factors among several that influence innovation. Successful implementation of IP rights depends on complementary factors such as the quality of legal institutions, markets and infrastructure. Simply put, the efficacy of IP reform is ultimately subject to the environment in which IP rights operate. National prosperity is achieved when countries implement a positive policy paradigm — of which an important component is IP rights. To borrow an old truism, intellectual property rights are necessary but not sufficient to promote and foster innovation.

 

Policies such as expropriation of property without compensation and the introduction – or threat of the use – of compulsory licences cause innovators and investors to think twice about investing in such countries. Without this critical investment – from both domestic and international investors – it is highly unlikely that economies that embrace and promote such policies will ever make the transition from a resource-based economy to one based on knowledge and ideas.

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