Sunday, November 1, 2015

A Recipe for Pharmaceutical Balance

Research and Development, Affordability and Accessibility

By Michelle Frankel
Michelle Frankel completed her BA and JD degrees in a total of six years. She was a member of the “3 + 3 Law and Public Policy” program between Union College and Albany Law School, having graduated from the latter in the spring of 2015.
During law school, Ms. Frankel pursued her health care interest in many different ways: she took several health law classes, worked at the NYS Department of Health and Pfizer (for academic credit), and interned at medical malpractice and boutique health care law firms. Overall, she is an advocate for systematic health care reform with an interest and focus on corporate and policy issues.
This paper was adapted from a paper she wrote for Professor Halewood’s International Trade Law class.

The pharmaceutical industry struggles to balance the cost of research and development (R&D) against the need for affordable and accessible drugs.  It is difficult to find the “right” balance because pharmaceutical innovation and continued development require a great deal of financial investment, which somewhat forces prices to reflect R&D costs.

Pharmaceutical development is further complicated by the fact that most of the developing world is dependent on production from the U.S. and the EU because of the capital and infrastructural demands; most developing countries are incapable of domestic production, which magnifies their dependence on the developed world.

Gilead Sciences, Inc. is a biopharmaceutical company that develops pharmaceuticals specifically targeted to address unmet medical needs.  In September 2014, Gilead announced an initiative to combat Hepatitis C, which represents one of the latest pharmaceutical efforts to assist and guarantee that certain developing countries have access to a pricey but lifesaving drug.  Gilead’s overall approach to promoting access to pharmaceuticals, and the specific methods used in its Hepatitis C efforts, highlights many of the intricacies in striking the right balance between promoting R&D and providing affordable and accessible pharmaceuticals.

This paper discusses how GATT, TRIMs, TRIPs and the Doha Declaration impact the pharmaceutical industry, and provides background about Hepatitis C and Gilead’s licensing agreements with seven India-based generic pharmaceutical companies.  It then assesses the pros and cons of Gilead’s initiative and explains how to ensure that there are sufficient incentives to promote continued pharmaceutical advancement, while also more reliably guaranteeying affordable and accessible drugs in the developed and developing world.

To read the paper, open HERE.