To the “Global North”

In recent years the term Global South has gained traction. It means all developing countries, including countries that are not necessarily in the southern hemisphere. On the other side there is a Global North in which a country like Australia could be included, to designate the world´s developed countries. The case for the US is different to that of the rest of the Global North. At this post we address the worries of the rest of the Global North, with Europe the main market, together with Japan, Canada, South Korea, the United Kingdom, Switzerland, Australia and others, and we certainly include most of the countries that have their incomes based mainly on oil and have very high income per capita.

Europe´s (and others) willingness to be part of the hypothetical system proposed here, would have to come from its tendency towards social justice. The very establishment of that vision in the European Union has been shaken with Brexit (there are some politicians in the rest of Europe that would like the Union to cease to exist). In any case Europe´s global counterpart, the United States, needs a way out of being the biggest reward market for pharmaceutical products without hurting the global industry (which includes Europe´s innovators as well as those from the rest of the world). The US market has worked without caps on drug prices. If Europe and others were willing to give their developed counterparts a chance at pursuing a system that works for them too, the TRIPS PLUS ULTRA proposal could be the solution. It is also expected they would be willing to agree to something like this so as to extend a helping hand to the Global South as well, and consumers around the world (consumer organizations, powerful in Europe, must be consistent with what they preach).

Rewards to pharmaceutical innovators entails the innovator being the sole authorized provider for a given market, i.e. a patent. This proposal entails longer patents in the United States (although with a cap as explained here) and in other high per capita countries. This would compensate innovators which would otherwise lose revenue from caps on prices in the US and shorter periods in the developing world (less years for them but they must be held strictly to the international standard). This should be done in a way that is not too harmful to the population of the Global North either.

NOTE: It is important to note that the TRIPS PLUS ULTRA proposal does not advocate for strict proportionality when determining the number of years each country should reward innovation with. See the chart mentioned in this post. Some examples: From 2004 to 2013, Europe would have given 22 and 23 years of exclusivity over its market to innovators, while the US 23 and 24 years. China´s contribution in this simulation, for instance, would have grown from 7 years of exclusivity over its market in 2004 to 13 years in 2013 (15 to 17 years now, and growing!). China and others are catching up and it´s about time they comply with the international standard as well. This will be convenient for them too, since they are a central part of the game now (with a lot of innovations to their name). Globalization might be saved if the European Union and others that believe in the same principals lead by example.