The US Attorney for the Southern District of New York recently accused the Swiss pharmaceutical giant Novartis of doing exactly this by providing illegal kickbacks, honoraria and other benefits to doctors — exactly what it promised not to do when it settled a similar case three years earlier.
Indeed, Public Citizen, a US consumer advocacy group, has calculated that, in the US alone, the pharmaceutical industry has paid out billions of dollars as a result of court judgments and financial settlements between pharmaceutical manufacturers and federal and state governments.
Sadly, the US and other advanced countries have been pressing for stronger intellectual-property regimes around the world. Such regimes would limit poor countries’ access to the knowledge that they need for their development — and would deny life-saving generic drugs to the hundreds of millions of people who cannot afford the drug companies’ monopoly prices.
The issue is coming to a head in ongoing WTO negotiations. The WTO’s intellectual-property agreement, called TRIPS, originally foresaw the extension of “flexibilities” to the 48 least-developed countries, where average annual per capita income is below US$800.
The original agreement seems remarkably clear: The WTO shall extend these “flexibilities” upon the request of the least-developed countries. While these countries have now made such a request, the US and Europe appear hesitant to oblige.
Intellectual-property rights are rules that we create — and that are supposed to improve social well-being. However, unbalanced intellectual-property regimes result in inefficiencies — including monopoly profits and a failure to maximize the use of knowledge — that impede the pace of innovation. And, as the Myriad case shows, they can even result in unnecessary loss of life.
The US’ intellectual-property regime — and the regime that the US has helped to foist upon the rest of the world through the TRIPS agreement — is unbalanced.
We should all hope that, with its decision in the Myriad case, the Supreme Court will contribute to the creation of a more sensible and humane framework.
Joseph Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University.
Copyright: Project Syndicate