Case Study: Pharmaceutical Companies, Intellectual Property, and the Global AIDS

Question

Case Study: Pharmaceutical Companies, Intellectual Property, and the Global AIDS Epidemic”

3. What impact would you expect South Africa’s decision to levy duties on drug imports from Western nations to have on the international distribution of drugs to South Africa?

4. In June 2002, the WTO extended the transition period during which least-developed countries (LDCs) had to provide patent protection for pharmaceuticals. In your opinion, was this an appropriate change in policy or a dangerous precedent? What could be some of the negative ramifications of this resolution? What about the effects for other industries?

Explanation / Answer

Hello !

The answer to your questions are as follows :

3) About 15% of South Africans having a drug problem has been quoted extensively, in a government press release, news headline, addiction rehabilitation groups and among religious drug support groups. The current deputy chairperson of South Africa’s Central Drug Authority and pharmacology lecturer at the University of Witwatersrand, David Bayever, was quoted as saying “15 % of South Africans have a drug problem and this figure is expected to rise”. A report from South African Community Epidemiology of Drug Use (SACENDU) has reported that for the first half in 2015,for most of the patients (32%) cannabis was their primary drug of abuse, followed by alcohol at 23%. This information was gathered from 75 rehabilitation centres and 10,936 in and outpatients of these centres. South Africa has no regular representative surveys on substance abuse. There has only been one nationally representative epidemiological study of alcohol, drug and psychiatric disorders, carried out between 2002 and 2004 and mainly to diagnose mental disorders in adults. Due to all these reasons, following rules and regulations governing pharmaceutical companies have become of utmost importance in South Africa. Levying heavy duties on drug imports from Western nations will have both pros and cons. It will reduce the negative usage of drugs by drug and substance abusers which in turn will bring down the number of South African people facing drug problems. Levying duties on any product, increases its’ cost, due to which, the impoverished class of South Africa who live hand to mouth, will find it onerous to purchase life-saving drugs.

4) Patents exist to protect a specific type of property – a unique, non-tangible, yet very valuable type of property: intellectual property. Intellectual property, especially the type protected by patents, has the interesting characteristic of being able to be simultaneously possessed by multiple people. The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. It’s important functions are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The principle goal is to ensure that trade flows as smoothly, predictably and as freely as possible. The decision of the WTO to extend the transition period during which least-developed countries (LDCs) had to provide patent protection for pharmaceuticals, in my opinion, is like a double-edged sword. It is both an appropriate change in policy and a dangerous precedent. If the transition period is extended, many pharmaceutical companies can develop the same drug and sell it in the market without any legal hassles of copyrights. Hence, demand for essential drugs can be easily met by the needy. As production and supply is according to the demand (and not less than demand), there will be no scope to increase the price of the drugs in the market to earn profits by the pharmaceutical companies. The thought behind this decision is to ensure prolonged life expectancy and promoting well-being at all ages. It also includes the target of providing access to affordable essential medicines and vaccines to the unprivileged people of the LDC’s. However, there could be negative ramifications of this decision too, as number of people addicted to legally banned drugs without a physician’s prescription, will rise and the particular LDC has to then battle the problem of substance and drug abuse.

Industries related to pharmaceutical industries like bottling industries will be able to earn profits and the demand for pharmacy professionals will see a steep rise.

Hope this helps !

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