Full text PDF - International Policy Network

Increasing access to medicines 159
contribute to an environment in which new, better, more effective
and efficient medicines replace older, less effective and efficient
ones. Importantly, this environment is also one where access to
such innovations can be encouraged through mechanisms of
markets.
One such mechanism is the provision of information about new
medicines, through advertising and other marketing tools. By
increasing demand for the medicine, such marketing sends a signal
to other pharmaceutical companies that it may be worth investing
in a competing product.
More generally, IP protection in countries with incipient or extant
knowledge-based industries is likely to spur economic growth, with
positive consequences for the demand for medicines. 21 Weak IP laws
enable the emergence of copy industries at the expense of innovator
industries – with negative consequences for economic growth
because the added value of the copy industries is typically lower than
that of innovator industries. 22 In addition, innovator companies
based in countries with strong IP protection will be less likely to
engage in joint knowledge-oriented projects with firms in countries
with weak intellectual property protection (Maskus, 2000).
It is perhaps not surprising, then, that between 1997 and 2001,
180 of the 184 new molecular entities were developed in the US, the
EU and Japan, 23 where intellectual property protection is the
strongest.
In addition to providing incentives to local companies to invest
in the development of innovative products, IP protection in poor
countries may spur innovation by foreign companies to serve local
needs (e.g. developing drugs and vaccines to treat and prevent
tropical diseases) (Lanjouw, 1998). By contrast, countries that
exploit their weak intellectual property regimes by threatening to
issue compulsory licenses for drugs reduce the incentives to invest
in such research and development (Rozek, 2000).
The contrasting cases of India and Singapore shed some light on
the link between strong intellectual property legislation and innovation.