Innovation intellectual property rights

Other proposals question the efficiency of the present system of intellectual property rights as an incentive to innovation and point to a more radical change in the way R D on pharmaceuticals is organized these proposals... 

There are really only three possible routes (1) use the commercial market through the patent system to determine the rewards to the innovator, (2) base rewards to innovators on therapeutic benefits, and (3) do not bother measuring at all. Option (1) is the patent system, but this functions poorly for neglected diseases. Advanced Purchase Commitments use option (2) in a half-hearted way, as I describe below. A system of Transferable Intellectual Property Rights, described below, uses option (3). The key issue is that in the absence of meaningful measurement of health impacts, it is necessary to base rewards only on commercial success, and that is not consistent with a mission to improve the health of the poor. 

There are at least three very important flaws in the basic mechanism proposed by Project BioShield II (and Transferable Intellectual Property Rights in general). First, the way the reward for the innovator is financed through a patent extension is inefficient and inequitable. Second, the incentive mechanism is poorly defined, and does not offer a clear methodology to determine how large a reward to pay for a given innovation. Third, the mechanism discriminates against small firms. 

First, then, consider the way that financing is raised for this mechanism. Essentially, Transferable Intellectual Property Rights offer a way of providing an off-the-books financial reward to companies that develop some socially desirable innovation, such as a vaccine for HIV/AIDS. Ignoring the effect on innovation for the moment, consider how this financial reward is obtained. The innovator is rewarded with a wildcard patent extension of, say, two years... 

In sum. Transferable Intellectual Property Rights are a type of reward system that (1) is extremely inefficient in the way it raises funds to reward innovation, (2) offers no plausible methodology according to which it could allocate rewards, and (3) discriminates against small innovative firms in favor of large ones. 

The expected private benefit depends on a number of market characteristics and public policies, including market size, intellectual property rights, price regulation, and the magnitude of prizes for innovation. Some public policies, such as the Orphan Drug Act, may affect both the costs and the expected private benefits of R D investment. 

Letter from Roy Widdus to Commission on Intellectual Property Rights, Innovation and Public Health (Hopefully) clarifying the discussion on advanced purchase commitments, advanced market mechanisms for early stage vaccines, and the IFFlm (May 10, 2005). 

Farlow, Andrew, Donald W. Light, Richard T. Mahoney, and Roy Widdus. 2005. Concerns Regarding the Making Markets for Vaccines Submission to the Commission on Intellectual Property Rights, Innovation and Public Health. Available at www.who.int/inteUectualproperty/en/. Last accessed May 10,2005. 

P]roduce an analysis of intellectual property rights, innovation, and public health, including the question of appropriate funding and incentive mechanisms for the creation of new medicines and other products against diseases that disproportionately affect developing countries. (CIPIH 2003)... 

Commission on Intellectual Property Rights, Innovation and Public Health. Available at ... 

Patents, the focus of this chapter, are the most prevalent form of intellectual property right (IPR) sought for biotechnological innovation [5]. Patent rights are nega-... 

World Health Organization (2003). Public Health, Innovation and Intellectual Property Rights. Available http //www.who.int/intellectualproperty/documents/thereport/ en/index.html. Accessed 20 July 2006. 

National Academy of Sciences (2005). Reaping the benefits of Genomic and Proteomic Research Intellectual Property Rights, Innovation, and Public Health, National Academies Press, Washington, D.C. 

A number of different indicators, such as the number of researchers per thousand in the labor force, share of scientific publications and citations, intellectual property rights, share of patents, and share of high tech exports, are being used to evaluate competitiveness in research and innovation. 

Okay, M. LaingR. (ZOOS) Pharmaceutical Tariffs What is theireffect on prices, protection of local industry and revenue generation Paper prepared for The Commission on Intellectual Property Rights, Innovation and Public Health. Available from http //www.who.int/inteUectualproperty/studies/TariffsOnEssentialMedictnes. pdf [accessed 19 Febraary 2015]. 

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