Given the virulent nature of the virus, that brought the world economy on its knees, the world’s leading pharma companies have been arduously racing forward at a feverish pace to find a vaccine for COVID-19. Pharma companies, given their successful discovery, at the moment, are relishing in extravagant, lucrative profits with their IP rights. Thus this begs a pertinent question that are such kind of insane amounts of profits justified?
Given the fact, that Pharma laboratories typically face very heavy odds since only one in dozens of experiments succeeds, it would be termed as being ignorant, in not supporting such profits or rather deserved remuneration.
With thousands of failed attempts, attempts are emphatically made to compensate costs of all such failed trials on to the price of the one successful invention, here –covid vaccine. Additionally, to be able to earn profits throughout, patenting their intellectual property which makes it illegal for rivals to copy their process, comes across as the most viable solution.
Public policy conundrum
In granting such controversial rights, which might lead to mitigation of competition and perhaps even exploitation, governments emphatically face a public policy dilemma. This is due to the fact that in pursuit of high, sustained profits, pricing is usually kept high.
High cost of the product, in current scenario– the vaccine, makes it unaffordable for low-income households which emphatically dims the potential and robustness of the covid fighting efforts. Thus, if such facts are carefully deciphered, lower affordability leading to lower probability of getting vaccinated amidst a detestable, soul wrenching pandemic, can effectively be termed as exploitation.
Scrutinizing the other face of the coin, if such rights are not granted to the pharma companies, who consequently will not be able to ask for monopolistic pricing power through protection of IPR, they will have no incentive to invest in development and research, which at the moment is holy grail for the public and economics’ health.
According to a simple law of economics, it is effectively stated that competitive markets maximize consumer and producer welfare. This is due to the mere fact that healthy competition insures efficiency and innovation. It is due to this very reason that monopolies around the world are mitigated with conscious efforts. But a conundrum that government faces is that in addition to stringent competition laws, government’s books of laws also contain IPR laws that creates monopolies. In contrast to IPR laws, the competition laws curb monopolies.
If scrutinized closely, it can be deciphered that there is an apparent tension between IPR and competition laws and that it is an interesting dichotomy, but a false one. In practical terms, IPR and competition law need to work in harmony. This is due to a very significant reason that IPR gives market power but competition law ensures that such market power is exercised within limits.
It is to be noted that the two, in the economic world, cannot be separated. Why? Because IPR laws bring in innovation, inquisitiveness and invention which is highly crucial for economic development and research domain. Similarly, competition laws bring in efficiency in the market with efficient allocation of resources. In the world, both the laws have their prime usage. IPR laws, at the moment, are aiding the pharmaceutical sector and the competition law is aiming to dilute the power of e commerce giants who are displaying rudimentary and advance form of corporate unethical and inefficient behavior.
Thus, given the importance of both the laws, clash between the two is not only unwanted but also quite detestable. Therefore, a harmonious marriage of the two is not needed but necessary.