Prices and access to essential medicines

Abstract

Patent rights establish a price level for medicines that makes them unaffordable for the majority of the people in the world. This paper presents some main consequences of the influence of patents on the markets for drugs, and provides some economic arguments that might be useful in the discussion of patent rights. Patents for essential medicines have unacceptable social short run effects. Arguments that in the long run they provide incentives to promote invention seem uncertain and poorly justified. A system of compulsory licensing inside the WTO TRIPS agreement will work better. The paper is not the result of original research by the author, but it attempts to assist in understanding certain of the economic arguments which are advanced in favour of patent rights, and to consider how such rights influence consumers of medicines.