Hai Quang Le, IP Consultant
Jürgen W. Simon, Prof. Dr. mult. h.c., MBA
Linh Chi Dang - M.A. Candidate of Governance and Public Policy
Access to essential medicines in developing countries, including Vietnam, remains a critical challenge due to patent-related barriers. The COVID-19 pandemic underscored these difficulties, highlighting the urgent need for affordable medications. In response, the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement provides certain flexibilities that allow developing countries to manufacture or import essential medicines at lower costs, particularly during public health emergencies. These flexibilities include compulsory licensing, which permits governments to authorize the production of patented medicines without the consent of the patent holder, and parallel imports, which enable countries to import patented drugs from nations where they are sold at lower prices.
Nevertheless, TRIPS flexibilities have significant limitations. Ambiguous legal provisions, national policy uncertainties, and political pressure from developed countries often restrict their effective implementation. As a result, TRIPS mechanisms alone are insufficient to ensure equitable access and availability to medicines, making alternative approaches necessary.
Therefore, this article examines two complementary strategies to address these challenges:
(i) Access insufficiency solutions, which focus on reducing costs and improving distribution to make existing medicines more affordable; and,
(ii) Availability insufficiency solutions, which aim to stimulate research and development (R&D) for neglected diseases that lack effective treatments.
Both approaches are essential, as ensuring affordability (access) is meaningless if the medicines for certain diseases do not exist (availability).
Attempts addressing access insufficiencies
Differential pricing
Differential pricing, which is based on the concept of price discrimination, is a strategy where firms charge different prices for the same product to different customers based on their willingness and ability to pay, rather than being based on different supply costs. This approach aims to improve access to essential medicines in developing countries by setting low prices in low-income or developing countries. The idea is to make medicines more affordable in low-income regions while still covering R&D costs through higher returns from developed markets.
[3] Donald W Light / Joel Lexchin. (2021). The costs of coronavirus vaccines and their pricing. The costs of coronavirus vaccines and their pricing.
[4] WHO (2006), p. lll; Liebig, Klaus (2005), p. 209-2ll; Gamharter, Katharina (2004). 249, 250;Watal, Jayashree (2000b), p. 14.
[5] There is a controversy, if such price discounts and negotiations should be kept secret in order not to have implications on price-spillovers on referential pricing. Liebig, Klaus (2005), p. 210; Watal, Jayashree (2000b), p. 14.
