GlaxoSmithKline (GSK), one of the UK’s largest pharmaceutical manufacturers, unveiled that it will be dropping its patents in poorer countries. This will make it easier for manufacturers in the world's poorest countries to copy its medicines. Patents will not be filed in around 50 developing countries with a combined population of around 1 billion people. This includes some of the world’s poorest countries such as Afghanistan, Rwanda and Cambodia.
In countries with so called ‘lower middle income’, GSK will still continue to file for patents, however with the idea to grant licences to generic manufacturers in exchange for a small royalty. Where middle-income countries are concerned, GSK plan to take a more graduated approach towards their patents for middle-income countries as they improve their economic standing. These countries will be given access to GSK’s patent portfolio and be allowed to copy their medicines, on a case by case basis.
A Shift in IP Protection
We have seen a clash between defenders and critics of the IP system suggesting that innovation within the pharmaceutical world and access to medicines are simply not compatible. Despite the debate, we are now seeing a dynamic shift due to pharma companies tackling the issue head on.
Several companies have been improving their track record by signing licensing agreements with the Medicines Patent Pool (MPP) which have allowed cheap HIV drugs to be available to millions of patients in the developing world. A number of UK based pharma companies such as, AbbVie, Bristol-Myers Squibb, Gilead Sciences and MSD have signed agreements with the MPP within the last two years. This is in line with the view of Andrew Witty, Chief Executive of GSK, who believes in a move towards a more flexible vision about how the global patent system is applied across the world.
What does this mean for the future?
Despite pharmaceutical companies believing that patent protection remains vital for rewarding investment in research, more and more companies are warming to the idea that more flexibility is needed. It is appearing necessary to put together an approach which is right according to the stage of maturity for each country.
GSK recognises that improved access to its products requires a flexible and multifaceted approach to IP protection. GSK also have a deep connection to healthcare and have taken several steps over the years such as tiered pricing, healthcare infrastructure building, data-sharing and innovative partnerships to develop and improve access to medicines around the world. This suggests that their latest decision to drop patents in developing countries may be just about its moral connection to healthcare as it is to follow their business interests.
What are the Remaining Challenges Facing IP and the Pharmaceutical Industry?
GSK will continue to seek full IP protection in all high and upper middle income countries preventing other manufactures from making generic copies until expiry of the patent. This will further perpetuate the fierce dispute over IP between the pharmaceutical industry and generic manufacturers within these economies.
Despite these patent changes being a welcome change to the pharmaceutical industry, they will not solve all of the challenges of improving healthcare in developing countries. Better funding, screening, diagnosis, and hospital services as well as access to treatments will be needed in conjunction to the patent changes. However, the changes are certainly a step in the right direction for the industry.
There is no doubt that the news from GSK is a giant leap forward for the pharmaceutical industry as well as for global healthcare. However, this is just the tip of the iceberg on the journey towards a multifaceted approach to global IP protection on many life-saving medicines. GSK’s decision to forego patent filings is a welcome initiative, but other companies will need to follow suit if we are to see significant improvements in access to medicines worldwide.
Where IP is considered, GSK’s structured approach to its IP protection may help to dissolve the ‘patchwork’ approach that has previously existed. Previously, generic manufacturers have been too worried about copying any medicines as they were unaware of what IP was in place. With this new approach, it should allow a more simplified system and give manufacturers more confidence to freely copy medicines. This could also lead to better profits for the generic manufacturers as well as for larger companies such as GSK through their royalty scheme. There is no doubt that this will also put pressure on other companies to change their IP systems.
Perhaps the news for GSK is a tactic to maintain more control over IP protection across the pharmaceutical world. By creating a more structured and simplified approach, its puts them in the driving seat and allows them to control which countries are free to copy their medicines according to their economic standing. The previous patchwork approach to IP protection would have caused a certain level of unpredictability to how and where generic manufactures use their medicines.