Orphan Drugs vs Orphan People

Jasson Urbach | 14 Jul 2014
Free Market Foundation
The World Health Organization (WHO) has declared, "A post-antibiotic era—in which common infections and minor injuries can kill—far from being an apocalyptic fantasy, is instead a very real possibility for the 21st century". With few signs of new drugs becoming available, the rising trend of resistance to antimicrobial pharmaceuticals is one of the most critical and worrying issues facing the global community and has the potential to relegate humanity back to an era not experienced in decades.

With repeated exposure, germs develop resistance to antimicrobials which, eventually, cease to be effective in the treatment of particular illnesses. More and more resistant organisms, which include bacteria, fungi, viruses and some parasites, are withstanding attacks by antimicrobial medicines, such as antibiotics, antifungals, antivirals, and antimalarials, so that treatments are increasingly proving ineffective, allowing infections to persist.

News that should have been greeted with great joy is that on 23 May, the United States Food and Drug Administration (FDA) approved a new drug to combat acute skin and soft tissue infections, including methicillin-resistant Staphylococcus aureus (MRSA). This new drug was the first to be approved by the FDA under the US government's Generating Antibiotic Incentives Now programme. In its efforts to combat the growing problem of antimicrobial resistance (AMR), the US government is providing incentives such as fast track review and an extra five years of market exclusivity for pharmaceutical companies to develop new drugs.

Instead of joy, everyone, like the activists who, for decades, have treated pharmaceutical companies as a totemic evil, has responded with shock at the US government giving pharmaceutical companies an extra five years of market exclusivity. They have even suggested that developing country governments should consider breaking such patents by issuing "compulsory licences" to allow competitors to copy and sell the drugs without consent from the rights-holders.

Welcome to the absurd activist world where good news is twisted into bad news. Where pharmaceutical companies engaged in developing desperately and urgently required new medicines and acting within the laws created by government are treated as villains instead of heroes. Pharmaceutical companies invest large amounts of resources - both financial and human - that involve significant opportunity costs, into developing new generations of effective antibiotics. For most drugs, it takes up to ten years for a product to leave the laboratories and be introduced into the market. This reduces by half the twenty year period of market exclusivity in which governments allow pharmaceutical companies to earn some return on their investment.

Once a product hits the market, pharmaceutical companies, generally, thus have about one decade in which to recover their costs and clear a profit before a product enters the public domain and joins the thousands of other molecules that already enjoy permanent public domain status. At this point the drug is free to be copied by other companies which then derive a profit from the sale of their mutated product.With an extra five years of market exclusivity, a company would have up to 15 years to recoup their costs. Given the health community's growing concerns about the declining effectiveness of antibiotics on the market today, is it unjust to incentivise scientific genius and the mobilisation of billions in new research investment by offering a five year extension to existing IP limits?

Everybody, including activists, should be rejoicing that scientists at pharmaceutical companies are developing new drugs to prevent the WHO threatened "apocalypse". Activists should consider focussing their energies on promoting laws that encourage investment and increase access to essential medicines - the vast majority of which have entered into the public domain and are no longer subject to patent laws - instead of undermining property rights and lobbying for laws that discourage investment into vitally important new drugs.

Greater emphasis should be placed on the rational use of antibiotics and measures to curb fake and sub-standard antibiotics, which increase the probability of resistance emerging to genuine products. Prof Amir Attaran and Dr Roger Bate have proposed that the international community should commit to signing an international treaty on counterfeiting medicines. Currently medicine counterfeiters are able to use all sorts of legal loopholes to get away with what they are doing. Unlike counterfeit currency, there is no consistency in the laws that deal with producers of fake medicines. A global treaty is needed to close the many loopholes and standardise the legal treatment of criminals whose trade is deadly. Such a treaty concerning counterfeit currency has already existed for decades. It is high time one is adopted for medicines to protect the future of humankind.

This article was first published in the July edition of Medical News

http://www.freemarketfoundation.com/issues/orphan-drugs-vs-orphan-people