Published on: November 12, 2024

This article series by Dr. Preeti Chauhan continues to draw upon the foundational knowledge presented during the five-day training on “Access to Medicines, TRIPS, and Patents in the Developing World.” Day Two of the training offered valuable insights into the pharmaceutical industry, with presentations by Dr. Aashna Mehta, Reji K. Joseph, and Dr. Gargeya Telakapalli.
In this instalment, we will delve into the journey of medicines from lab to shelf to community, a topic expertly presented by Dr. Gargeya Telakapalli. This exploration builds upon the core concepts introduced by Dr. Gargeya and Dr. Arathi PM during Day One, where we examined the complex interplay between health rights, intellectual property, and access to medicines in developing countries.
By understanding the intricate processes involved in the pharmaceutical industry, we can gain a deeper appreciation for the challenges and opportunities that exist in ensuring equitable access to essential medicines.

Read the previous article on Navigating the Pharmaceutical Landscape

The global pharmaceutical industry is a complex interplay of innovation, intellectual property rights, and public health needs. This intricate balance often results in a significant disparity in access to essential medicines, particularly in developing countries.

The Global Pharmaceutical Landscape

The global pharmaceutical industry is characterized by:

• High R&D Costs: Developing new drugs is a capital-intensive and time-consuming process, often requiring billions of dollars and several years. The average cost to develop a new drug is estimated to be around $2.8 billion.
• Intellectual Property Rights: Patent protection incentivizes innovation but can also limit competition and drive up prices1. The top 10 pharmaceutical companies account for approximately one-third of the total market share.
• Market Concentration: A few multinational corporations dominate the industry, with significant market power. The United States is the largest pharmaceutical market, accounting for around 40% of global pharmaceutical sales.
• Price Disparity: Significant price differences exist between developed and developing countries for the same drugs. For example, the U.S. spent approximately $348.4 billion on prescription medications in 2020, translating to $1,126 per capita.
• The distribution of global pharmaceutical R&D is heavily concentrated in a few developed countries, primarily the US, followed by Switzerland, Germany, the UK, and Japan. This concentration of R&D resources can further exacerbate global health disparities.

A look at the Medicine Consumption of South-East Asia Region

Pharmaceuticals and Public Health

Pharmaceuticals play a crucial role in public health, particularly in addressing infectious diseases, chronic illnesses, and rare disorders. However, the high cost of medicines can pose a significant burden on healthcare systems, especially in low-income countries. Out-of-pocket expenditure on medicines can lead to catastrophic health spending, pushing families into poverty.

The Indian Pharmaceutical Industry: A Double-Edged Sword

India has emerged as a global pharmaceutical hub, known for its generic drug manufacturing capabilities. However, challenges persist:

• High Drug Prices: Despite the presence of a robust generic drug industry, many essential medicines remain expensive, especially branded formulations.
• Intellectual Property Rights: India’s patent laws have undergone significant changes, impacting the balance between innovation and access to medicines.
• Government Interventions: The Indian government has implemented various policies, including price controls and compulsory licensing, to regulate the pharmaceutical industry and improve access to medicines.
• Role of Industrial Policy: Government policies have played a crucial role in shaping the Indian pharmaceutical industry, from promoting domestic manufacturing to encouraging R&D.

Medicine Price Regulation in India

India has a long history of drug price regulation, with the Drug Price Control Order (DPCO) being the primary instrument. However, the effectiveness of these measures has been mixed. While price controls can help reduce the cost of essential medicines, they can also disincentivize innovation and investment in R&D.

The Global Divide in Access to Medicines

A significant portion of the world’s pharmaceutical market is concentrated in a few wealthy countries, leaving many developing nations with limited access to essential medicines. This disparity is exacerbated by factors such as:

• High drug prices: The high cost of patented drugs can limit access, particularly in low-income countries.
• Intellectual property rights: Strong patent protection can hinder the production of affordable generic medicines.
• Weak healthcare systems: Inadequate healthcare infrastructure and limited public health spending can further restrict access to medicines.

Balancing Act: A Focus on the Developing World

To address the global challenge of access to medicines, a multifaceted approach is needed. This includes:

• Strengthening healthcare systems: Investing in primary healthcare, disease prevention, and public health programs.
• Promoting generic drug competition: Encouraging the production and distribution of generic medicines.
• Implementing flexible intellectual property policies: Using mechanisms like compulsory licensing and patent pooling to increase access to essential medicines1.
• International cooperation: Fostering collaboration between countries to share knowledge, technology, and resources.
• Innovative financing mechanisms: Exploring innovative financing models, such as pooled procurement and advance market commitments, to support the development and distribution of essential medicines.

Through addressing these challenges and embracing innovative solutions, we can work towards a future where everyone, regardless of their socioeconomic status, has access to the medicines they need.

Price Regulation in India: