The patent system is designed to promote innovation and offers a mechanism to ensure that its fruits are accessible to society. In the context of public health, the challenge for policy makers is to find an optimal balance between the rights of patent owners, who provide technological innovations to improve health conditions, and the needs of the general public. Finding this balance has often created controversy and debate. The development of new drugs requires heavy investment and long-term research, coupled with expensive clinical trials and regulatory approval procedures. The exclusive right conferred by a patent is one of the incentives for developers of new drugs to make the necessary investments into research.
On the 2nd of June 2017, the Institute for Democracy and Economic Affairs (IDEAS) conducted a seminar on Improving Health Innovation and Access to Medicines. IDEAS invited four distinguished speakers alongside participants from different stakeholder groups. It was moderated by Mr. Azrul Mohd Khalib, an IDEAS senior manager for external relations. The seminar focused on the role of patents in pharmaceutical innovation and fair, affordable access to health care. The seminar began with an opening speech from IDEAS Director of Research, Mr. Ali Salman. Mr. Ali Salman started with stating that Malaysia is one of the top 25 most competitive economies in the world. He believed that having higher value services, manufacturing, research and development, and less reliance on commodities and natural resources, will help Malaysia to achieve high income status. Investing in building a knowledge economy, such as strengthening the pharmaceutical industry, is very important especially in high income economies. For example, the most successful American companies make most of their revenue through ideas, concepts, brands, innovative products and processes. Mr. Ali Salman also mentioned that renewing and strengthening the build up of knowledge-oriented sectors and processes are crucial for continued high growth and to achieve the objectives of the New Economic Model. It is important to have strong Intellectual Property (IP) laws in Malaysia in order to gain confidence from foreign investors. If such protection is weak or if enforcement is poor, companies will be unlikely to invest or enter into local partnerships. Such concerns and fears will jeopardise efforts such as their involvement in clinical trials and launching of new innovative products. He also commended the work that the government has done and in particular, the establishment of the Intellectual Property Corporation of Malaysia (MyIPO). Lastly, a lot could be done to improve IP protection without having to compromise on public health and patient access to latest treatments. Malaysia can progress further in the global economy, attract more foreign investment and trade more readily overseas.
The following document captures some of the salient features of this dialogue:
Ms. Linda Wang was the first to take the floor. She is a practicing lawyer in Zaid Ibrahim & Co who specialises in intellectual property rights and began by explaining about IP laws in general. For the pharmaceutical industry, a patent is the most important IP for the company. It will allow the company to have a monopoly for a period of time in order to cover their research and development cost. Patents will help to improve and encourage innovation as seen in the growth of the generic industry in the United States by about 40%. There are four criteria to consider before gaining a patent from the regulatory body: it is a new invention, it has an inventive step, it is industrially applicable, and it must included as an item eligible for protection under patent acts. Besides that, Ms. Linda Wang gave the Hatch-Waxman Act developed in the United States as an example.The Hatch-Waxman Act is divided into three components; Data Exclusivity (DE) protection, Patent Term Restoration (PTR), and Patent Linkage. Malaysia only has DE but not PTR and Patent Linkage. This shows that there are still some gaps to fill for the generic industry in Malaysia. The Hatch-Waxman Act is a good example of an act that has been adopted by many countries as it helps create a world where consumers can purchase drugs with cheaper prices while pharmaceutical companies would have enough incentive to keep expanding the generic industry.
Dr. Salmah Bari from the Ministry of Health took the stage after Ms. Linda Wang. She expressed her concern as a representative of the Ministry of Health on the affordability of drugs. Besides that, the Ministry of Health also aims to increase the quality of drugs and to improve general health outcomes. Among the challenges of the health care system is the proliferation of expensive drugs due to the monopoly power granted to pharmaceutical companies through patent rights. Expensive drugs will withhold access to medicine for medium to low-income earners. In addition, the health care system faces the need to balance the incentives for R&D against public access to medical innovations. For example, there are some companies that register their products and receive patent rights. However, they withhold such products from the market to exploit consumers when there is a sudden rise in demand. Moreover, sustainable financing impacts the affordability of drug prices. Generic industries bear a high cost in research and development to produce drugs. Therefore, sustainable financing is important for the company in order to be able to price the drugs at an affordable level. Dr. Salmah also gave suggestions to improve access to medicines from a regulatory perspective such as providing incentives for generic pharmaceutical industry, creating conducive regulatory infrastructure, establishing government-to-government relationships through mutual recognition agreements, and fortifying respect and legal strength. Dr. Salmah also mentioned that regulatory frameworks need to improve accessible medicine and affordable healthcare. In summary, more transparent patient access schemes or management entry agreements will be helpful for the Malaysia healthcare system.
After an insightful session with the representative from the Ministry of Health, Chin Keat Chyuan, Country Manager of Johnson & Johnson Sdn. Bhd. and President of the Pharmaceutical Association of Malaysia, took the stage. He highlighted that five out of 11 main categories of research and development in the world in 2014 fell under the umbrella of pharmaceutical industry. The average cost of developing a new drug, currently at USD 2.68 billion, has increased threefold since 1970. There are millions of researchers and scientists in pursuit of ground-breaking discoveries in pharmaceutical industries, with over 240,000 on-going clinical trials globally. This indicates that the pharmaceutical industry is growing and further highlights the importance of incentives to industry players. Strong IP rights would not only encourage investment and innovation, but it will also help to increase economic activity. The IP system should be perceived not as zero sum game. Instead, it should be seen as a system that can provide a sustainable framework for the industry and regulators to work together to have a win-win situation. He concluded that Malaysia should start to develop and introduce more comprehensive plans for Patent Term Restoration and Patent Linkages in the country.
Lastly, Lee Yu Kit, Chief Technologist from IBM Malaysia, took the stage. He explained that IBM Watson Health has begun research and development on oncology and genomics (oncology is a branch of medicine that deals with the prevention, diagnosis, and treatment of cancer). According to Mr. Lee, oncology is evolving and is incorporating cognitive technology to further develop the industry. IBM Watson Health has produced tremendous research on oncology and has helped medical oncologists and their care teams address various challenges. For example ,an image-guided informatics system was successfully developed to provide holistic summaries of patient conditions and to support evidence-based clinical decisions for radiologists. The system has the capacity to read and analyse an image through filtration, recognising the problem of the patients. In conclusion, he pressed that we must acknowledge the increasing number of people suffering from a chronic disease around the world. Therefore, innovation and research are needed to produce better medicine for the future.
During the question and answer session, a question was asked in regards to the government’s aspiration to promote research and development in the generic industry in Malaysia. Dr. Salmah explained that there are a lot of incentives provided by the government to pharmaceutical companies in Malaysia. For example, assistance in provided through the Ministry of Health, the Malaysian Investment Development Authority and various financial institutions. A question also was raised regarding the legal landscape of IP rights in Malaysia. According to Ms. Linda Wang, she believes that the current system in Malaysia is skewed against innovated companies. Many are still afraid of IP rights and do not fully understand that granting patent rights would balance the interests of both consumers and innovators in the long run. In conclusion, there is much to improve on IP rights in Malaysia. Industry players and the regulatory bodies need to work together in order to strengthen the generic industry in Malaysia.