This chapter addresses the increasingly important question whether artificial intelligence (AI) may fulfill the dreams of its proponents and begin to solve the real problems of resource scarcity, particularly of affordable new drugs. Leaders in the AI community have floated the idea that artificial general intelligence (AGI) will change the world to one where individuals will contemplate what to do when freed from the demands of labor because resource utilization will be maximized. We will live in an era of abundance. The same leaders have suggested that AI and/or AGI will tackle human biology and potentially find cures for all diseases. It seems almost certain that AI and/or AGI will be successful in establishing a much better understanding of human biology and ways to modify it to promote health. It is unlikely that intellectual property rules will play a material role in determining the path forward. Yet IP rules may help to determine the speed and scale at which the public has access to the benefits of the new technologies, and as always with IP there are risks of under-protection and overprotection that need to be balanced. As has been the case in previous iterations of challenge to conventional IP rules, there will be choices between stepwise adaptation of existing rules and the adoption of sui generis rules to address the changed environment. We proceed in two steps. The first is to consider the issues raised by introducing AI generated inventions into conventional IP systems, most prominently patent systems. The second is to contemplate the possibility of new paradigms that are developed on a fresh slate based on evolving requirements, and not looking back on the conventional modalities.
Prosecution of pharmaceutical companies for excessive pricing of products under competition law is now a reality. As recently as a decade ago, such prosecutions were virtually nonexistent. That situation has changed dramatically as competition authorities in Europe and South Africa have pursued a significant number of such prosecutions and have levied substantial fines against the investigated parties. While the United States has traditionally led in policing the pharmaceutical market against anticompetitive misconduct, in this specific arena it has fallen behind, principally because federal courts so far have refused to acknowledge excessive pricing as a cause of action under Section 2 of the Sherman Act. In a succession of cases European competition authorities have demonstrated concretely the way in which excessive pricing prosecutions may be pursued. This article examines those cases in some detail showing the challenges that competition authorities have faced, and how they have gone about addressing them. The successes in Europe should help put to rest arguments regarding the difficulties in ascertaining how pharmaceutical products are priced, particularly for products no longer covered by patents or regulatory market exclusivity. The South African competition authority is undertaking its second major prosecution of excessive pricing of originator products. The ongoing case involves an essential anticancer medicine the pricing of which has deprived individuals in South Africa of life-saving treatment. Methodologies for investigating and analyzing abusive pricing are being regularized. This is important because competition authorities around the world should be able to rely on generally accepted standards for pursuing misconduct. This article suggests doctrinal improvements in the form of per se baseline rules for establishing excess with respect to generics, and rule of reason balancing tests for assessing the fairness of pricing practices for originator products and generics not encompassed by per se rules. The continued evolution of excessive pricing doctrine does not depend on these improvements. More important is continuing legal, financial, and political support for the efforts of competition authorities in this area. Patents, regulatory market exclusivity and other structural features insulate the pharmaceutical market from economic pressures that ordinarily create and recreate an equilibrium that protects consumers. For the pharmaceutical market, there must be a means to redress excessive prices in themselves. Competition law enforcement is an important tool for achieving that redress.
The World Health Organization (WHO) estimates that in 2016, diabetes was the direct cause of 1.6 million deaths globally. Estimates also suggest that in 2018, only half of the 63.3 million people globally with type 2 diabetes needing insulin had access. In addition, the lack of access is disproportionately distributed across regions, with some developing countries having the least access to insulin. The barriers to accessing insulin are diverse and often context-specific, but low competition in the supply and production of insulin and its high prices are key limitations in the insulin market.Competition law is an important but often neglected legal and policy tool that countries and other stakeholders can use to protect consumer welfare and promote health and industrial and economic development. It aims to protect the integrity of markets to promote the efficient use of resources and encourage innovation in and access to health technologies.The purpose of this paper is to place the 'access to insulin’ issue, which affects global and national health systems and markets, in the context of competition law and policy, and to assess whether there may be reason for competition authorities, in cooperation with ministers of health and other relevant stakeholders, to explore sector inquiries or enforcement actions in the insulin market. This paper may also be useful to scholars working more widely on questions of access to medicines globally and within LMICs.The paper begins with a description of insulin as a product and of the structure of the global supply market. It then elaborates competition law doctrines that may be relevant to assessing the insulin market and includes some data that may be useful in considering whether additional investigation and data-gathering are warranted. Finally, the paper provides model forms of evidentiary request that could be used in sector inquiries or enforcement procedures.
Correspondence to Dr Katrina Perehudoff; katrina. perehudoff@ gmail. com © Author(s) (or their employer(s)) 2022. Reuse permitted under CC BYNC. No commercial reuse. See rights and permissions. Published by BMJ. Significant shortcomings in the global response to COVID19 have revealed a longstanding reality: the current international health and intellectual property (IP) laws and practices fail to deliver equitable access to medical countermeasures (ie, vaccines, therapeutics, diagnostics and personal protective equipment) for global health crises. Since 2020, governments worldwide have spent US$5.6 billion on COVID19 research and development (R&D) and US$45 billion on advanced purchase agreements. Yet, these funding agreements have not enabled the transfer of manufacturing knowhow to scale up vaccine production and make access more equal. As a result, large parts of the world were left unprotected from the virus, allowing the rise of new variants and prolonging the pandemic for everyone. On 1 December 2021, the 194 Member States of the World Health Organization (WHO) agreed to begin negotiations towards an international instrument that would better position the world to prevent, respond and prepare for future pandemics. (This instrument is often called a ‘pandemic treaty’.) These Member States recognised that a ‘(lack of) equity is at the core of the breakdown in the current system’ while acknowledging that the challenges in ensuring ‘universal and equitable access and distribution’ of medical countermeasures could be ‘meaningfully addressed under the umbrella of a potential new instrument’. A pandemic treaty presents an opportunity to address these challenges and craft a better system, based on solidarity, for the global governance of medical countermeasures. This commentary identifies key aspects of a Summary box
The Open Society Foundations Public Health Program commissioned an interdisciplinary team to examine the extent to which gaps in financing are an obstacle to more robust local production of pharmaceutical products (including diagnostics, vaccines and treatments (DVT)) and personal protective equipment (PPE) with focus on Africa. The Report is posted here. The Executive Summary and an Addenda compilation (which includes 3 supplemental research reports) are posted along with the Report at the website of Nova Worldwide Consulting.The overall findings of the study are that gaps in financing pose a constraint on the localization of pharmaceutical production in Africa. The gaps are not mainly due to a lack of financial capital in global financial markets that might be deployed for this purpose. The main problems are associated with the market environment in the sense that sustainable business operations require adequate demand, and market demand for pharmaceutical products in Africa is limited by various factors. In addition, comparatively weak infrastructure (recognizing variation among countries) makes it difficult to compete with large efficient foreign suppliers that are bolstered by foreign government support. Potential investors appear to perceive relatively high risks associated with investing in pharmaceutical manufacturing in Africa.Transforming political engagement:The COVID-19 pandemic may serve as adequate impetus to transform local production of pharmaceuticals into a governmental priority. Government commitment at a high level is required to engage the financial levers that will support localization of production.Sustainable business models:Particularly outside the vaccine sector, successfully operating a pharmaceutical manufacturing facility means addressing a market with sufficient demand to generate revenue and profits. Alternatively, or as a supplement, governments may provide direct subsidies, guaranteed offtake agreements, tax credits, local production pricing premiums, and other measures to substitute for market demand. These forms of support are commonly used for “infant industries”, and there should be plans to withdraw such support once a business has achieved sustainability.The social impact investor market:African governments should consider a program to encourage sovereign wealth funds and other financial asset managers to invest in local production on the African continent as a way to accomplish important social goals. To facilitate this objective, there should be some type of backstop or guarantee of the social impact investments within reasonable parameters. The African Development Bank may be helpful in establishing mechanisms for this purpose.Opportunities for advocacy:There is substantial room for advocacy by civil society to move Africa toward greater self-sufficiency in the production of pharmaceutical products. At the high level of political commitment, government authorities should be persuaded to prioritize local production of pharmaceuticals as a matter of public health security, engaging the financial levers to support such a commitment. At the level of industrial policy, the African Union should be encouraged to engage in concrete planning for regional pharmaceutical production hubs, and associated infrastructure and centers of technical expertise. Whether in conjunction with that, or separately, procurement authorities should be encouraged to form regional pooled procurement mechanisms to aggregate demand, allow for more effective bargaining with suppliers, and support regional hub manufacturers.Support for effective implementation of the African Continental Free Trade Area in terms of reducing barriers to intra-Africa trade in pharmaceutical products would improve the market situation. Similarly, continuing support for efforts to integrate the African regional regulatory structure for pharmaceutical products would accelerate access to medicines. Establishment of a library of available drug master files for reference by manufacturers would significantly lower barriers to manufacturer market entry.Foundations should be encouraged to develop a transparent platform which could provide information to African manufacturers with respect to opportunities for financing and expertise for pursuing their objectives.
Download This Paper Open PDF in Browser Add Paper to My Library Share: Permalink Using these links will ensure access to this page indefinitely Copy URL Copy DOI
This chapter reflects on the evolution of competition law jurisprudence regarding the excessive pricing of pharmaceutical products, and suggests areas where improvements might be considered. This includes, first, establishing per se rules regarding pricing increases that might be considered excessive based on cost-plus baselines. This would facilitate the work of competition authorities and shorten prosecution timelines. The second set of improvements would involve identifying an appropriate methodology by which to determine reasonable baseline or normal prices to compare with the prices actually charged, particularly when a rule of reason analysis is required. Reasonable cost-plus baselines both for generic and originator products, taking account of risk, can be established. Finally, the so-called ‘two-step’ methodology for determining excessive pricing derived from the CJEU’s 1978 decision in United Brands is revisited. Outside the per se circumstance, this chapter recommends unitary determination of excessive pricing based on cost and context.
China’s successful economic and technological transformation did not depend on “following the rules” of the WTO system, nor did it depend on flouting those rules. China succeeded because of its characteristics as a country and an economy. China developed a sophisticated technological development plan to take advantage of those characteristics. A number of the advantages enjoyed by China cannot be replicated by other low- and middle-income countries. Still there may be some important lessons that can be derived from the Chinese experience. China’s success has provoked a reaction from the traditional economic and technology powers seeking to slow its march to technological parity, and perhaps even superiority. Some of these reactions are manifestly inconsistent with WTO norms, and some of the challenges to China’s allegedly WTO-inconsistent inconsistent measures or practices are debatable. Of particular concern is that decisions by the United States in particular to ignore WTO rules are weakening the institution, with potential adverse long-term effects. With that said, it may be that the WTO and its DSB are not the best place either for rule-making or resolution of disputes regarding IP, technology transfer and investment, and that alternative fora are preferable, at least until there might evolve a new “stasis” or general consensus on appropriate policies. Bringing IP and related dispute settlement into the WTO was a controversial concession, including provision for cross-retaliation, when the TRIPS Agreement was negotiated. We might want to “think outside the box” in terms of future reform. Fragmentation of the global economy is not a good thing -- not simply because there will be less specialization and a related move away from the global production possibility frontier. The risk on the downside is toward the breakdown of political accommodation, and intensification of competition for resources that may lead to violence, i.e., the risks preceding the Second World War. There is no apparent reason for exceptional pessimism, but there is also a need to keep an eye on history. The risks are not peculiar or specific to intellectual property or technology, but conflicts regarding IP and technology are a significant part of the current devolutionary trend. The February 13, 2021 update of this paper considers the potential implications of the transition to the Biden Administration for US-China trade relations, including with respect to intellectual property and transfer of technology.
This commentary is directed toward addressing concession by developing country foreign direct investment (FDI) hosts of a potentially important tool for accelerating technological development – a tool that may become more important as the prospects for developmental assistance are otherwise diminishing. Governments at all levels of development have a substantial interest in promoting inward technology transfer in a way that benefits locally-based enterprises. Governments, through legislation and/or regulatory measures, can improve the terms of trade for local businesses by setting ground rules that improve the capacity, i.e. bargaining power, of local enterprises in negotiating the terms of FDI. Whether technology transfer requirements are ‘optimal’, or a second or third best, this does not argue for taking them out of the toolkit for developing countries. It is difficult to foresee the circumstances that will be relevant for each country and whether particular tools should be employed in particular situations.
ABSTRACT The COVID-19 pandemic has brought into stark relief the gaps in global preparedness to address widespread outbreaks of deadly viral infections. This article proposes legal mechanisms for addressing critical issues facing the international community in terms of providing equitable access to vaccines, treatments, diagnostics, and medical equipment. On the supply side, the authors propose the establishment of mandatory patent pools (‘Licensing Facilities’) on a global or regional, or even national basis, depending upon the degree of cooperation that may be achieved. The authors also discuss the importance of creating shared production facilities. On the demand side, the authors propose the establishment of Regional Pharmaceutical Supply Centers (RPSCs) for the collective procurement of products, and the need to coordinate the issuance of necessary compulsory licenses for production and/or importation, depending on relevant circumstances. The authors envisage that centralized coordination by RPSCs should assist in overcoming difficulties individual countries may encounter in addressing administrative and technical issues in procuring supplies, as well as creating improved bargaining leverage with potential suppliers. The authors finally address the problem created by the decision of various high-income countries to ‘opt out’ as eligible importing countries under the World Trade Organization TRIPS Agreement Article 31bis amendment that addresses the predominant export of pharmaceutical products under compulsory licenses.
The COVID-19 pandemic has caused Governments to contemplate measures to override patents and other intellectual property rights (IPRs) in order to facilitate production and distribution of vaccines, treatments, diagnostics and medical devices. This paper discusses whether the COVID-19 pandemic may be considered an "emergency in international relations" and how WTO Member States may invoke Article 73 ("Security Exceptions") of the TRIPS Agreement as the legal basis for overriding IPRs otherwise required to be made available or enforced. It concludes that the pandemic constitutes an emergency in international relations within the meaning of Article 73(b)(iii) and that this provision allows Governments to take actions necessary to protect their essential security interests.
The later GATT system and the early WTO system were each grounded in a belief in the “rule of law” as a means to promote economic efficiency and public welfare, and a belief that peaceful multilateral trade relations served the common good. Grounding in the rule of law has broken down. The technology that today needs protecting mainly is that of a global technological infrastructure that is linked together in ways that allow penetration into the most critical infrastructure of societies. This is part of a larger picture in which “policy planners” have lost control of the global digital environment. By happenstance or design, we are living in surveillance states. The TRIPS Agreement was not designed to deal with the current state of international technology affairs. The period between 1989 and 2019 has witnessed a dramatic shift in the balance of global economic power. China has rapidly emerged as the second most powerful economic area behind the United States, and with countries like India beginning to assert themselves both economically and militarily. We are well past the day when China was not issuing and/or serious about patents, and patent quality is improving. India is asserting a right to technological independence as evidenced by its preference for locally-manufactured alternative energy products, and the India-Solar case may be just the cutting-edge of demands for national technological autonomy. President Trump has convinced the Europeans more than ever of their dependence on China and other Asian markets for future economic growth, and he hastened or reinforced a pivot away from North America. None of this is to suggest that trade and investment negotiating and deal-making is going away, or that new deals will not include rules regarding intellectual property, cyber-intrusion and/or transfer of technology. The deals will be bilateral or among coalitions of the willing. Private sector companies are always adapting to changing circumstances. They are not relying on bureaucrats in Geneva or in Washington to enable their activities. In terms of technology and IP, solutions will be technical. More will be spent on hardening networks, encrypting product technologies, implementing block chain supply systems, more carefully vetting and controlling employee behavior, and defending corporate interests in our chaotic global environment. The systemic issues are not going to be resolved in the near to medium term. They will be with us for a while.