NYT Can’t Distinguish Between Patent Monopolies and Licensing Requirements

13th November 2018 Off By binary
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The New York Times ran a very confusing piece on the difficulties that many people in China are facing in getting access to drugs. The piece does not clearly distinguish between the problem of drugs not being legally available because they have not been licensed by China’s drug safety agency and drugs being expensive in China due to patent monopolies.

These are very different issues. The first can be readily solved by making the licensing agency more efficient and possibly also relying on approvals by other agencies. (The piece indicates this has recently become the practice.)

The issue of drugs being expensive due to patent monopolies is more complicated. China has to make a decision as to whether it wants to rely on patent monopolies as a mechanism to finance research or whether it instead depends more on a pre-funding mechanism that would allow new drugs to be sold in a free market at generic prices.

This is a huge issue and China’s policy in this area will have enormous implications for the rest of the world. If it decides to make new drugs widely available at their free market price, it will be difficult for the U.S. and European companies to charge prices that are often more than 100 times as much, both in their own markets and in the developing world.

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