Latin America needs to urgently rethink its traditional view of intellectual property.
BY PIERRE VERSTRAETE
Latin America has room for improvement in fostering environments where intellectual property is respected, particularly with regard to patented pharmaceuticals. On many occasions, in fact, countries still reward the copying of patented drugs rather than the development of innovative life-saving medicines. Pharmaceutical innovation, however, is undeniably in the interest of Latin America and its patients, and countries in the region should take concrete steps to create the conditions that foster it, including strong and effective intellectual property protection.
Already a success story is Mexico, which has greatly benefited from the intellectual property protection provided through the North American Free Trade Agreement (NAFTA). Today, Mexico is the leading pharmaceutical market in the region. In part, owing to Mexico’s decision to protect intellectual property, pharmaceutical patents and foreign direct investment in the pharmaceutical sector have grown and are expected to grow further.
Strong patent and data protection for pharmaceuticals is good for patients and important for research-based companies like Schering-Plough Corporation. New medicines are developed and medical breakthroughs occur when companies take large and enormously expensive risks. By providing a limited period during which our products may not be copied, intellectual property protection gives Schering-Plough and its investors the incentive to take those big risks. This is the engine that propelled some of the great advances in human health in this century, including treatments for deadly infections, heart disease and cancer.
This engine also drives Latin America’s home-grown industries that rely on intellectual property protection for risky investments. Local pharmaceutical companies use the incentives afforded by strong patents and effective data protection to overcome the risks inherent in the development of innovative drugs. For instance, the medicinal properties of the flora and fauna in Brazil’s tropical forests were well-known long before Brazil’s decision to strengthen intellectual property protection in the mid-1990s. But it was only with the introduction of such protection that Brazilian researchers felt secure enough to take the risks that resulted in innovative, patent-protected biomedical products developed in Brazil for global use—a good result for Brazilian companies, the Brazilian economy, and Brazilian patients alike.
And while the time-bound exclusivity provided by strong intellectual property protection allows pharmaceutical manufacturers to recoup their investments, it is the region’s patients who benefit the most from gaining early access to life-saving and life-improving medicines. It would be unwise to undermine or destroy the intellectual property engine that is increasingly responsible for improved health outcomes for patients in the region and around the world. Timely access to the world’s latest and most innovative medicines will make the region’s populations healthier and more productive. New medicines, for example, can help to reduce production losses due to worker illnesses, lower absenteeism rates, and improve school attendance, all of which will contribute to accelerated economic growth and help to decrease poverty.
Some, however, will still find access to healthcare and medicines difficult because of cost. Where cost is truly a barrier to treatment, healthcare stakeholders, including insurers, pharmaceutical companies, providers, governments and others can and must find creative solutions to help patients, something to which Schering-Plough is deeply committed.
Governments in Latin America should act in their own best interests and those of their patients by accelerating the tentative steps they have already taken in favor of strong intellectual property protection for pharmaceuticals. It is urgent that we rethink the traditional view of intellectual property in Latin America: No longer should governments in the region wait for the United States to insist on strong intellectual property protection in other countries. Rather, the region’s governments should be the ones seeking improved protection, not because the United States insists, but because it is in their own national interest and that of their citizens.
Most of the free-trade agreements (FTAs) that the United States has entered into with countries both within and outside the region provide a template for increasing intellectual property protection and transforming the region’s economies to become more innovation-based. Governments in Latin America should view high standards of patent protection and data exclusivity in a positive light—one that will create an innovative culture allowing local companies to create and discover cures and treatments and driving economic development.
With an increasingly advanced level of economic development and more sophisticated social, educational and legal infrastructure, we invite Latin American countries to embrace the many benefits of strong intellectual property protection, helping the region and its people to thrive.
Pierre Verstraete is President, Latin America region, for the Global Pharmaceutical Business of Schering-Plough Corporation. This column is based on the Viewpoint Americas series from the Council of the Americas.