Safeguarding innovation: why strong patent protection is crucial for advancements in healthcare

Ana María Castro

Lloreda Camacho & Co, Bogota

acastro@lloredacamacho.com

Patent law: the fuel for healthcare innovation

The healthcare sector thrives on continuous innovation, bringing novel treatments and technologies that improve and extend the lives of patients. This progress is fuelled by substantial investments in research and development (R&D), often undertaken by private companies that rely on strong intellectual property rights (IPR) to secure a return on their investment. Patents are vital for incentivising this innovation by granting inventors exclusion rights to their inventions for a limited period. As commented by Dr Raquel Sorza, Chief of Operations and Communications from the Latin American Federation of the Pharmaceutical Industry (FIFARMA):

‘Without doubt, a robust patent system is essential to create an environment that favours investment in pharmaceutical innovation by providing a secure base for high-risk investments and rewarding creative efforts that improve the quality of life.’[1]

The development of new medicines and medical technologies is crucial for improving global health. However, the process of bringing a new drug to market is lengthy, complex and expensive. Pharmaceutical companies invest significant resources in R&D and IPRs, particularly patents, play a critical role in incentivising this investment. Patents grant inventors exclusion rights to their inventions for a limited period, allowing them to recoup their R&D costs. This exclusion prerogative encourages continued innovation by ensuring that companies can benefit from their investments.

On the other side, weakening patent protection through the wrongful use of exceptional measures, such as compulsory licensing, undermines this incentive structure and discourages future innovation. When companies face the prospect of their inventions being copied and sold without their consent, they are less likely to invest in risky and expensive R&D endeavours. This ultimately harms patients, as it could delay the development of new treatments and cures.

Countries with stronger patent protection normally shows higher rates of pharmaceutical innovation. Dr Sorza says:

‘[The] patent system and IPRs not only encourages research in companies, but also in universities and other actors in society, contributing to higher innovation and global competitiveness. Countries with strong patent systems are generally those that produce the most patentable knowledge, which places them in a favourable position in terms of innovation and development’.[2]

Compulsory licensing: solution or threat?

Compulsory licensing is presented as a solution to access issues. However, when wrongfully used, it could pose a significant threat to innovation. By allowing third parties to produce and commercialise patented products without the consent of the patent holder, it diminishes the value of patents and reduces the incentive for companies to invest in R&D.

Furthermore, compulsory licences often fail to deliver on their promise of increased access to affordable medicines. The production of generic drugs still requires significant investment and expertise, and there is no guarantee that cost savings will be passed on to patients. In some cases, compulsory licensing can even lead to shortages of essential medicines, as generic manufacturers may lack the capacity to meet demand.

Balancing access and innovation

While access to affordable healthcare is a critical concern, it should not come at the expense of innovation. Policymakers must recognise that strong patent protection is not an obstacle to access, but rather a condition for the development of new and improved health treatments.

Instead of only considering the use of compulsory licensing, governments should explore different alternative mechanisms to improve access to medicines, such as voluntary licensing agreements, technology transfer agreements and public-private partnerships. These approaches can help to ensure that patients have access to the treatments they need while preserving the incentives for continued innovation.

Conclusion

Strong patent protection is the bedrock of healthcare innovation. By safeguarding the intellectual property rights of inventors, we encourage the development of life-saving treatments and technologies that benefit patients worldwide. While concerns about access to affordable healthcare are valid, they should not be addressed at the expense of innovation. Policymakers must recognise that a robust patent system is essential for a thriving healthcare ecosystem and prioritise the protection of intellectual property as a cornerstone of medical progress.