TODAY.AZ / Business

Lives versus profits

07 May 2013 [12:33] - TODAY.AZ
By AzerNews

By Joseph E. Stiglitz

Nobel laureate in economics, University Professor at Columbia University

The United States Supreme Court recently began deliberations in a case that highlights a deeply problematic issue concerning intellectual-property rights. The Court must answer the following question: Can human genes - your genes - be patented? Put another way, should someone essentially be permitted to own the right, say, to test whether you have a set of genes that imply a higher than 50% probability of developing breast cancer?



This a particularly poignant case. Normally, economists talk about trade-offs: weaker intellectual-property rights, it is argued, would undermine incentives to innovate. The irony here is that Myriad's discovery would have been made in any case, owing to a publicly funded, international effort to decode the entire human genome that was a singular achievement of modern science. The social benefits of Myriad's slightly earlier discovery have been dwarfed by the costs that its callous pursuit of profit has imposed.

More broadly, there is increasing recognition that the patent system, as currently designed, not only imposes untold social costs, but also fails to maximize innovation - as Myriad's gene patents demonstrate. After all, Myriad did not invent the technologies used to analyze the genes. If these technologies had been patented, Myriad might not have made its discoveries. And its tight control of the use of its patents has inhibited the development by others of better and more accurate tests for the presence of the gene. The point is a simple one: All research is based on prior research. A poorly designed patent system - like the one we have now - can inhibit follow-on research.


Fortunately, what motivates most significant advances in knowledge is not profit, but the pursuit of knowledge itself. This has been true of all of the transformative discoveries and innovations - DNA, transistors, lasers, the Internet, and so on.



Sadly, the US and other advanced countries have been pressing for stronger intellectual-property regimes around the world. Such regimes would limit poor countries' access to the knowledge that they need for their development - and would deny life-saving generic drugs to the hundreds of millions of people who cannot afford the drug companies' monopoly prices.

The issue is coming to a head in ongoing World Trade Organization negotiations. The WTO's intellectual-property agreement, called TRIPS, originally foresaw the extension of "flexibilities" to the 48 least-developed countries, where average annual per capita income is below $800. The original agreement seems remarkably clear: the WTO shall extend these "flexibilities" upon the request of the least-developed countries. While these countries have now made such a request, the US and Europe appear hesitant to oblige.

Intellectual-property rights are rules that we create - and that are supposed to improve social well-being. But unbalanced intellectual-property regimes result in inefficiencies - including monopoly profits and a failure to maximize the use of knowledge - that impede the pace of innovation. And, as the Myriad case shows, they can even result in unnecessary loss of life.

America's intellectual-property regime - and the regime that the US has helped to foist upon the rest of the world through the TRIPS agreement - is unbalanced. We should all hope that, with its decision in the Myriad case, the Supreme Court will contribute to the creation of a more sensible and humane framework.

Copyrights: Project Syndicate

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