Where the subject matter of a patent is a product, it excludes others from making, using, offering for sale, selling, or importing this, unless under license from the holder of the patent. Where the subject matter is a process, it prevents others from using the same process and from using, offering for sale, selling, or importing for these purposes at least, the product obtained directly by that process without a license from the patent holder. Effective patent protection is important for the pharmaceutical industries. Indeed, without the incentive of patents, it is doubtful the private sector would have invested so much in Research and Development (R&D) of new drugs.
It is through patent protection that the companies recoup what they spent on R&D and make profit to fund future R&D.
However, it can be argued that the existence of patents does not play such an important role in considerations for R&D investment. This can be illustrated by the following; some diseases are prevalent in developing countries e. g. Tuberculosis, Malaria and Sleeping sickness. Many developing countries have patent laws but there is little or no private sector investment in research for new drugs for these diseases. In fact, a study of 1393 new chemical entities marketed between 1975 and 1999, revealed that only 16 were for tropical diseases and tuberculosis.
For diseases that affect people both in the developing and developed world like HIV/ AIDS, Cancer and Diabetes, the same R&D would apply for both groups so the presence or not of effective patent laws in developing countries will not really affect R&D investment. Ironically, in the case of diseases that affect developed countries, even though patent life has increased in the past 20 years, the rate of innovation has not. Only one in three new drugs developed in the past 25 years represented clear therapeutic advance.
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