As an addendum to my previous post, I’ll offer these quotes from Bill Emmott’s 20:21 Vision: Twentieth Century Lessons for the Twenty-First Century. Emmott is the chief editor for The Economist. I’ll be writing a review of this book briefly, but for now, here are some quotes that jive pretty well with Stiglitz’s take on pharmaceutical patents:
“Intellectual property (that is, patent) protection for rich-world firms enables them to keep their goods expensive in developing countries while preventing local firms from competing against them.
“This is particularly problematic in the pharmaceutical business. Medicines are cheaper in the third world than in the first, but they are still costly by local standards. Pharmaceutical firms argue that they need to make profits in order to maker their research into drugs worthwhile; without patents and profits, the drugs would not exist. Perhaps more pertinent, however, is a fear that if they sell drugs very cheaply in poor countries, traders will buy them up and export them back to the rich world, undercutting the drugs firms’ profits there.
“Both these arguments are sound. Without profit, the drugs would not be invented. But there remains a question of quite how much patent protection is really needed. And, most important, there remains a question of who should pay to help make drugs cheap in the third world: the drugs firms’ shareholders or rich-world taxpayers. There is a strong moral case for the second, for the use of aid money to bridge the gap between the need for profits to repay research and the difficulty the poor face in paying the bills. This is especially important for diseases that are prevalent only or mainly in poor countries, and thus provide no profits at all in the rich world. Such aid, targeted clearly at medicines and health care, especially for scourges such as AIDS, malaria and tuberculosis, would come with risks. Over time, for instance, the drug firms might raise the prices charged to the donor governments, thus creaming off more of the aid money for themselves. The risk of smuggling back to the rich world would also persist. But it would still save millions of lives. And the moral point would be clear: it is not capitalism that is at fault in making drug prices too high and unaffordable in the third world, it is poverty.”