Patents and neglected diseases

Or how India became the pharmacy of the developing world and why this might change: 

A Lancet study concluded that only 1 percent of the 1,556 drugs developed in the last twenty-five years targeted so-called neglected diseases such as malaria and tuberculosis, even though these diseases account for over 10 percent of the global disease burden. (p. 175).  

There are 2 million children with HIV in the world and 90 percent of them live in sub-Saharan Africa. Without treatment, a third of those children with the virus will die before their first birthday. And in fact, few if any have access to treatment, not simply because treatments are unaffordable, but also because Big Pharma has not found it profitable to develop pediatric treatments for this primarily poor group (p. 176).

[P]atents only incentivize drug production in countries that already have the necessary technical capacity and capital investment for breakthrough research. Indeed, in countries with lesser technical capacity, patents may impede their ability to gain technical knowledge by copying more advanced industries abroad. Simply put, the elusive promise of a patent will not spur the creation of new treatments if a country lacks technical know-how. Thus patents in the developing world not only inhibit technology transfer to poor countries; they also engender dependence on developed countries and their drug companies—companies that, as we have seen, are not particularly interested in serving the populations of the developing world (p. 176).

The crucial distinction made in the Indian Patent Act of 1970 was to recognize patents in pharmaceutical processes but not products. So long as a company could develop an alternate way of producing a drug, it was legal. In addition, process patents were relatively short—five years from the date of grant or seven years from the date of filing, whichever was earlier . . . A booming generic drug industry in India ensued. Competition from generics in turn drastically lowered drug prices and facilitated access to medicines for the poor—not just in India, but also in poor export markets, from Asia to South America to Africa. Over a ten-year period, the introduction of Indian generics in Africa reduced the price of AIDS treatments from $15,000 to $200 annually, bringing life-saving treatment within the ordinary person’s reach. Indian pharmaceutical companies quickly became “the pharmacy of the developing world” (p. 181).

Intelectual property protection in the early US:

Indeed, in the case of copyrights even the United States took a minimalist approach to intellectual-property protection during its first hundred years (p. 182). 

Indeed, the author argues that countries like Switzerland, Germany, and the US took advantage of a minimalist approach to intellectual property protection which allowed them to thrive. This is currently denied to developing countries because of agreements like TRIPS.  

It is a thought provoking piece. It is here, and it s worth reading. It is titled "An issue of life and death" by Madhavi Sunder (2012).