November 13, 2007 by Nick Koutsoukis
In 2003, the Tufts Center for the Study of Drug Development (“Tufts”)
estimated the cost to develop a new drug to be in excess of $850 million.¦lt;br /> Today, that figure is likely well into the billions. Tufts also found
that approximately 20% of new drugs that enter clinical testing eventually
receive U.S. marketing approval. With developmental costs so high and
approval rates so low, there must be a sufficient incentive for
pharmaceutical companies to continue research and development.¦lt;br /> Pharmaceutical companies rely on patent rights as an inducement to develop
new drugs. The patents allow the company exclusive rights to the
manufacture and sale of the drugs for a fixed time period, usually 20
years.
¦lt;br /> On November 29, 2006, Thailand invoked Article 31 of the World Trade
Organization’s agreement on Trade-Related Aspects of Intellectual Property
Rights (“TRIPS”). Article 31 allows a country to produce a generic copy
of a patented drug in certain “emergency” situations. The Thai
government’s main argument for invoking the provision was that Efavirenz,
an HIV/AIDS medicine made by Merck, was too expensive for the government
to cover treatment costs for all the country’s patients that needed it. Read the rest of this entry »
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