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Specify The Types of Country Risks That Pharmaceutical Firms Face in International Business
Specify The Types of Country Risks That Pharmaceutical Firms Face in International Business
Specify The Types of Country Risks That Pharmaceutical Firms Face in International Business
In certain countries, people desperately need medications but cant afford the high
prices. Some governments sanctioned importation of nonapproved generic drugs so
their people could afford them. The reaction of the branded pharmaceutical
manufacturers is to sue. (EX. South Africa) Doing so created international backlash
against the firms. It gave much negative publicity for branded pharmaceutical firms
but also made people more aware of the generic drug industry and its potential for
helping those affected by many diseases. Once a patent expires, generic
manufacturers typically sell the medications that they produce at very low prices.
Retail prices for the compound can fall by as much as 90% within 12-18 months.
Governments may not be providing subsidies for health care and medications. When
it comes to the government not providing subsidies, its up to the person who needs
the drug to pay for it all on their own and most branded pharmaceutical firms
charge high prices for the compounds, especially compounds that are needed by
many people. Generic manufacturers can come in and make generic compounds of
the drugs needed but that can only be done after a patent expires. This would give
people the drugs for very cheap prices regardless of help from the government.
Some firms focus R&D only on compounds with the most return, they believe that
R&D is too costly and risky to invest in diseases common in poor countries.
Branded pharmaceutical firms focus on the big returns like cancer and the central
nervous system. The national government provides incentive packages and public
private partnerships to motivate firms to want to focus on other compounds. (Ex.
Bill and Melinda Gates Foundation is investing billions of dollars to fight AIDS,
Tuberculosis, and various infectious diseases that affect developing countries) Also
by having strong patent laws, pharmaceutical firms are more likely to invest in new
drugs.
Industry-Funded Ghostwriting
Problem: These articles endorse the sponsors product, and it is a deceptive marketing
technique that undermines trust in the medical literature.
Affordable Drugs
Problem: Companies only focus on developing treatments for diseases that can
return the cost of capital and generate profits.
Publication Bias
Problem: Deceives clinicians by only focusing on the positive data, giving the
appearance that a drug is more effective than it actually is.
Counterfeit Drugs
Problem: It is causing an epidemic of deaths across the world including 200,000-
300,000 deaths a year in China. Internet-based pharmacies are adding to the
problem because people now have easy access to these tainted and poisonous
drugs.
Intellectual Property Rights
Problem: These patents lives are running out and generic brands are moving in to
steal the drug, selling what they produce at very low prices because they dont
have the high costs of R&D, marketing, and sales expenses.
Introduction
The World Trade Organizations (WTO) TRIPS Agreement is an attempt to narrow the
gaps in the way intellectual property rights are protected around the world, and to
bring them under common international laws.
It establishes minimum levels of protection that each government has to give to the
intellectual property of fellow WTO members.
It strikes a balance between the long term benefits and possible short term costs to
society.
What types of protection does this treaty provide to pharmaceutical firms?
They wanted to make sure that adequate standards of protection exist in all
member countries.
They followed the same guidelines for protection from the World Intellectual
Property Organization (WIPO) - the Paris Convention for the Protection of Industrial
Property (protection of industrial property) and the Berne Convention for the
Protection of Literary and Artistic Works (protection of the work and rights of
authors) - and other areas that they feel were not talk about enough or were not
even mentioned.
Flexibilities such as compulsory licensing are written into the TRIPS Agreement, but
some governments were unsure of how these would be interpreted, and how far
their right to use them would be respected.
WTO ministers issued a special declaration at the Doha Ministerial Conference in
November 2001.
TRIPS Agreement does not and should not prevent members from taking measures
to protect public health.
On one remaining question, they assigned further work to the TRIPS Council to
sort out how to provide extra flexibility, so that countries unable to produce
pharmaceuticals domestically can import patented drugs made under compulsory
and parallel licensing.
Compulsory licensing is when a government allows someone else to produce the
patented product or process without the consent of the patent owner. In current
public discussion, this is usually associated with pharmaceuticals, but it could also
apply to patents in any field.
Parallel (grey-market) imports are not imports of counterfeit products/illegal copies.
These are products marketed by the patent owner or with the patent owners
permission in one country and imported into another country without the approval
of the patent owner.
The agreement allows compulsory licensing as part of the agreements overall
attempt to strike a balance between promoting access to existing drugs and
promoting research and development into new drugs.
But the term compulsory licensing does not appear in the TRIPS Agreement.
Instead, in the agreement it says other use without authorization of the right
holder.
What enforcement mechanisms does TRIPS provide for ensuring that
these protections will be carried out?
Governments have to ensure that intellectual property rights can be enforced under
their laws, and that the penalties for infringement are tough enough to deter further
violations.
The procedures must be fair and reasonable, and not unnecessarily complicated or
costly.
They should not entail unreasonable time-limits or unwarranted delays.
The agreement describes in some detail how enforcement should be handled,
including rules for obtaining evidence, provisional measures, injunctions, damages
and other penalties.
It says courts should have the right, under certain conditions, to order the disposal
or destruction of pirated or counterfeit goods.
Willful trademark counterfeiting or copyright piracy on a commercial scale should be
criminal offenses.
What are the latest developments regarding this treaty?
The workshop focused on the flexibilities and policy options available under the
WTOs Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS) and other intellectual property treaties administered by WIPO
The workshop covered a large variety of topics around the question of access to
medicines and innovation in the pharmaceutical sector, which also included
intellectual property rights.
The main purpose of holding this workshop was to raise participants awareness of
the need to take a holistic approach and to ensure that knowledge across different
sectors is properly involved in the domestic policy making process.
They introduced the key concepts of intellectual property protection and the
flexibilities contained in the TRIPS Agreement
Familiarized participants with the additional flexibility made available to WTO
members, often also referred to as the Paragraph 6 System - special compulsory
licenses can be granted solely for the purpose of producing and exporting medicines
needed in countries which do not have sufficient capacities to manufacture those
medicines at home.
They also held discussions that were dedicated to health-related topics and some of
the broader aspects directly related to intellectual property rights and public health
During the workshop, participants were provided with an opportunity to report on
their countries specific needs in the health sector and to share experiences
regarding the implementation of the intellectual property rule, and the management
of intellectual property rights and the use of flexibilities.