We're patently going mad

Lifesaving drugs must be developed differently - for all our sakes

Innovation can be a driving force for improving public welfare. Nowhere is this more stark than in the creation of drugs to treat fatal diseases. If you have the drug you live; without it you die. Whether you have the drug depends on two issues: has it been developed, and if so, do you have access to it? The conflict between these issues revolves around how to stimulate innovation and how to pay for it. It is exemplified by the issue of access to Aids drugs and is one of the most contentious issues of international economic policy and law.

Drugs are cheap to manufacture, but expensive to develop. Much of the underlying research comes out of academic institutions funded by government grants. Much of the development work is by pharmaceutical companies, which will not invest in research and development without incentives: in this case the patent system, which rewards a company that develops a successful drug with a 20-year marketing monopoly.

Allowing monopolies leads to bad side effects and drugs are no exception. The economic incentive is the freedom to charge what the market will stand, and invest in what gives the highest return, rather than in what maximises healthcare benefits. In developing countries, life-saving medicines are priced beyond the reach of most people, a morally offensive outcome. Huge publicity surrounds specific negotiated price reductions, yet the effect on the overall access problem is tiny. But it's not just an issue in the developing world.

Governments and health insurers are finding ways to deny access to the newest and priciest products - in the US and other countries without a universal public health system, the uninsured cannot afford the newest medicines. Less well known are the huge inefficiencies of the existing system. Only about 10% of the price of a drug goes to pay for research on new products, and three-quarters of new drugs have no significant therapeutic benefit over existing treatments, implying that perhaps only 2-3% of the money collected from drug sales is spent on developing medicines better than the ones we already have.

If the existing system were the only way to encourage innovation, it would be sensible to tolerate it, as we would all eventually benefit. However, we believe that it is possible and practical to implement an alternative system that would reduce drug prices and drive investment into innovations that actually address health priorities.

On January 1 2005 the Trips agreement on intellectual property rights will come into force in most World Trade Organisation countries. It is an unbalanced treaty, based solely on enforcing patent rights worldwide as a mechanism to reward innovation.

We believe the way forward is to modify Trips in healthcare to require countries to maintain a GDP-related contribution to research and development, while being free to choose how they finance it. New methods of research - such as non-profit collaboration or prizes for exceptional ideas - would allow innovation to be rewarded directly, removing the need for marketing monopolies, and allow competition. Drugs could then be sold close to the cost of manufacture. The mechanisms to implement this would be far cheaper than the current system, which increases global prices by at least $300bn (£160bn) a year.

Evidence that alternative business models can support innovation comes from a variety of areas including open-source software development, the human genome project and open-access publishing. Last year, 69 respected scientists and economists wrote to the World Intellectual Property Organisation, a UN agency, asking that alternatives such as collaborative open models be considered. Yet the developed world continues to resist change. It is hard to avoid the suspicion that the dogged advocacy of intellectual property law as the only way to stimulate innovation is more about maintaining world economic power than anything else. But this is short-sighted.

Although the developed world leads in patent applications owing to its science base, the developing world will catch up, and there is evidence that the rise in the number of patents is starting to inhibit innovation itself. It would be more sensible to develop worldwide policies that encourage and reward innovation, while allowing competitors to build on each others' ideas, and protecting consumers from unreasonable prices.

Supporting the existing policy direction for drugs is indefensible, especially after the November 2001 Doha declaration of the WTO that health was more important than intellectual property. Extending marketing monopolies on medicines worldwide prevents the very competition that reduces prices and increases access to life-saving medicines. In the face of other successful models to support innovation, we can no longer claim we have no choice. Perhaps we should ask ourselves if laws that restrict use of knowledge and thereby cause unnecessary death are really weapons of mass destruction.

· Tim Hubbard is head of human genome analysis at the Wellcome Trust Sanger Institute in Hinxton, Cambridgeshire. James Love is director of the Consumer Project on Technology (CPTech) in Washington DC. Views expressed in this article are those of the authors and not necessarily those of their organisations

· Further reading

A New Trade Framework for Global Healthcare R&D
TJ Hubbard and J Love. PLoS Biology, 2004. 2(2): p147-150. http://plosbiology.org/archive/1545-7885/2/2/pdf/10.1371_journal.pbio.0020052-L.pdf

Community Property
KN Cukier. (cukier.com/writings/opensourcebiotech.html). Acumen, 2003. p54-60.

Information Feudalism: Who owns the knowledge economy?
P Drahos and J Braithwaite. 2002, London: Earthscan, 253.