The pharmaceutical industry as a medicines provider

Abstract

Rising prices of medicines are putting them beyond the reach of many people, even in rich countries. In less-developed countries, millions of individuals do not have access to essential drugs. Drug development is failing to address the major health needs of these countries. The prices of patented medicines usually far exceed the marginal costs of their production; the industry maintains that high prices and patent protection are necessary to compensate for high development costs of innovative products. There is controversy over these claims. Concerns about the harmful effects of the international system of intellectual property rights have led the World Trade Organization to relax the demands placed on least developed countries, and to advocate differential pricing of essential drugs. How these actions will help countries that lack domestic production capacity is unclear. Better access to essential drugs may be achieved through voluntary licensing arrangements between international pharmaceutical companies and manufacturers in developing countries.