Patents are a healthcare scapegoat

The World Health Organization (WHO) claims the biggest barrier to good health in poor countries is global patent law, which discourages investment in the diseases of poverty and makes existing drugs prohibitively expensive. So the WHO proposes a global treaty which would weaken patents and put research under official control. But a look at India, which has both a lot of poor people and weak patents, shows the diagnosis and the cure are wrong.

With per capita income under US$800, Indians are certainly poor. The current economic boom means far fewer people are poor and hungry than before but, despite swelling coffers, India is still failing on healthcare. Some parts of India have worse rates of infant mortality, maternal mortality and immunization than much poorer parts of sub-Saharan Africa or neighboring Bangladesh.

Despite all this, India is often held up as a model of healthcare delivery in Asian countries such as the Philippines. This is largely because of the widely-held perception - supported by the WHO - that breaking patents automatically translates into health improvements.

Try telling that to an Indian. The most significant determinants of health in India - like every other developing country - are improved drinking water, sanitation, sewage treatment and immunization. In many parts of India, however, simple technology such as sewerage is simply not available: an estimated 400,000 Indian children under five die each year from medieval diseases such as preventable diarrhea.

Partly to blame is the insistence that health-related goods such as water and electricity be provided by state monopolies, which restricts choice and encourages waste. Similarly, Indian state governments remain adamant that they should be the only provider of healthcare to the poor. The resulting state monopolies are riddled with corruption and rarely provide decent services. According to a 2005 report by Transparency International, the health system is the most corrupt service sector in India.

At the same time, the government maintains bureaucratic barriers that prevent the development of medical insurance. So the majority of people are forced to pay for all their medicines out of pocket, making them reluctant to take drugs when they fall ill, so ill health is guaranteed.

Clearly, in India, at least, the real problem lies not in patents but in state failure and bad governance. These problems have been thoroughly documented but they are barely mentioned by the WHO - but if the developing world is to significantly improve its health, this is the main problem that needs to be addressed. These failures disproportionately affect the poor, because the wealthy can buy clean water, sewage, power, medicines and healthcare. The poor have no such choices.

Instead of pointing to these politically difficult internal problems, it is so much easier to look for external scapegoats in the form of international patent rules and Western pharmaceutical companies.

But only 20 percent of India's total health expenditure is on drugs, as in most other developing countries. Of this 20 percent, every drug on India's essential list of 74 is already generic, meaning its patent has expired so production is cheap. So India's low rate of access to essential medicines is in no way caused by patents.

Patents have nothing to do with the fact that many doctors don't turn up to work at state clinics, even though they are being paid, or the shortage of nurses and medical staff and their poor training. Bureaucratic, centralized public procurement procedures, coupled with corruption, mean many drugs are not even available to dispensing pharmacies. And an inept regulatory system means that many of the drugs churned out by India's 8,000 manufacturers are often counterfeit or sub-standard.

India actually tightened up its intellectual property laws in 2005 and the results are beginning to show. Indian drugs companies have started investing in research, instead of simply copying existing medicines, and multinational pharmaceutical companies have set up shop here - bringing much-needed investment and jobs - because they know their inventions will be protected by patents. Continued improvement in patent laws is vital if India is to complete its transition from an agrarian to a high-tech economy.

The activists' and WHO's claim that the current patent system is not producing drugs for the diseases of poverty is also wrong. There are only a handful of tropical diseases that lack effective treatments and these cause only a tiny proportion of deaths, while public and private researchers are currently pouring in millions to finding cures. So there is little justification for scrapping a system that has delivered over 90 percent of all medicines we have today.

By diverting attention from the real issues of healthcare delivery, the WHO is undermining the health of the poor. By signing up to the WHO's proposed Medical Research & Development Treaty, governments in rich countries will claim they have done something concrete for the poor in developing countries. Similarly, governments in poor countries will happily continue to blame their appalling healthcare on international factors - it gives them the perfect cover to avoid the politically difficult reforms that really would improve health.

If we want to put patients first we need patents too.

Bibek Debroy is an economist who has worked in many academic institutions and in government, including the Indian Ministry of Finance. He is the author of several books and is a frequent newspaper columnist.