The 5th Globelics Academy Ph.D. School on ‘National Innovation Systems and Economic Development’

2–14 June, 2008, Tampere – Finland

Nejla YACOUBNejla YACOUB

University of Economics and Management of Tunis -TUNISIA-University of Economics and Management of Tunis -TUNISIA-

Ph.D. Student in Industrial EconomicsPh.D. Student in Industrial Economics

University of Littoral Côte d’Opale (ULCO) of Dunkerque -FRANCE-University of Littoral Côte d’Opale (ULCO) of Dunkerque -FRANCE-

Is Patent Protection an Incentive Is Patent Protection an Incentive for Innovation?for Innovation?

Literature and Case Study of the Tunisian Literature and Case Study of the Tunisian Pharmaceutical IndustryPharmaceutical Industry

Topic

MotivationsMotivations

1- Why this topic ? 1- Why this topic ? Controversies about the effects of patents Controversies about the effects of patents

on Innovationon Innovation

2- Why Pharmaceuticals ?2- Why Pharmaceuticals ? Patentability of pharmaceuticalsPatentability of pharmaceuticals

3- Why Tunisia ?3- Why Tunisia ? Pharmaceutical patents since January 2005Pharmaceutical patents since January 2005 Emphasis on the production of genericsEmphasis on the production of generics

Main QuestionMain Question

What Impacts Would What Impacts Would Patents have on the Patents have on the

Pharmaceutical Innovation Pharmaceutical Innovation in Tunisia ?in Tunisia ?

Axes of the Axes of the PresentationPresentation

1.1. The pharmaceutical industry in Tunisia, The pharmaceutical industry in Tunisia, the focus on the production of genericsthe focus on the production of generics

2.2. Advantages and limits of a Advantages and limits of a pharmaceutical industry based on the pharmaceutical industry based on the production of genericsproduction of generics

3.3. The role of patent protection in promoting The role of patent protection in promoting the pharmaceutical innovation in Tunisiathe pharmaceutical innovation in Tunisia

DefinitionDefinition

GenericsGenerics

Copies of the brand-name drug whose Copies of the brand-name drug whose patent expired (20 years)patent expired (20 years)

WHO: Tight control => generics have WHO: Tight control => generics have the same quality as the brand-name the same quality as the brand-name drugsdrugs

Much less expensive <= they are free Much less expensive <= they are free from expenditures in R&Dfrom expenditures in R&D

Axes of the Axes of the PresentationPresentation

1. The pharmaceutical industry in Tunisia, 1. The pharmaceutical industry in Tunisia, the focus on the production of genericsthe focus on the production of generics

2. Advantages and limits of a 2. Advantages and limits of a pharmaceutical industry based on the pharmaceutical industry based on the production of genericsproduction of generics

3. The role of patent protection in 3. The role of patent protection in promoting the pharmaceutical promoting the pharmaceutical innovation in Tunisiainnovation in Tunisia

Characteristics of the Tunisian Characteristics of the Tunisian Pharmaceutical IndustryPharmaceutical Industry

2

23

5

Public Private Foreign

Ministry of Public Health, 2008

Pharmaceutical Laboratories in Tunisia

30 pharmaceutical firms

The Pharmaceutical Industry in Tunisia

Local production: 50% in 2007 (8% in 1987)

8

44

50

0 5 10 15 20 25 30 35 40 45 50

1987

1999

2007

Ministry of Public Health, 2008

The Local ProductionThe Local Production

49% licensed 49% licensed drugsdrugs

51% generics51% generics

Exports: 5 to 7% Exports: 5 to 7% of genericsof generics

51%

49%

Generics Licenses

The Distribution Network of Pharmaceuticals in Tunisia

Foreign Suppliers

Central Pharmacy of TunisiaHospitals

Wholesalers

Local Producers

Other Structures Pharmacies

50%50%

The Government’s The Government’s ObjectivesObjectives

Increase the share of the local production Increase the share of the local production

Improve the production of genericsImprove the production of generics

Encouraging Measures for Encouraging Measures for GenericsGenerics

After the last reform of the social security After the last reform of the social security system (2007), the National Fund of system (2007), the National Fund of Health Insurance reimburses patients on Health Insurance reimburses patients on the basis of the least expensive the basis of the least expensive therapeutic equivalenttherapeutic equivalent

Enhance the market demand for genericsEnhance the market demand for generics

Axes of the Axes of the PresentationPresentation

1. The pharmaceutical industry in Tunisia, 1. The pharmaceutical industry in Tunisia, the focus on the production of genericsthe focus on the production of generics

2. Advantages and limits of a 2. Advantages and limits of a pharmaceutical industry based on the pharmaceutical industry based on the production of genericsproduction of generics

3. The role of patent protection in 3. The role of patent protection in promoting the pharmaceutical promoting the pharmaceutical innovation in Tunisiainnovation in Tunisia

Benefits in terms of CostsBenefits in terms of Costs

Control drugs’ prices Control drugs’ prices

Reduce health expenditures Reduce health expenditures

Accessible drugs to lower-income Accessible drugs to lower-income patientspatients

Local production of generics Local production of generics contributes at saving currencycontributes at saving currency

((very important goal for Tunisia after the continuous very important goal for Tunisia after the continuous appreciation of the Euro against the Dinarappreciation of the Euro against the Dinar))

Benefits for the Local Benefits for the Local IndustryIndustry

Consolidate the local industrial tissueConsolidate the local industrial tissue

Reduce unemploymentReduce unemployment

Increase exports => ameliorate the trade Increase exports => ameliorate the trade balancebalance

Attract multinational firms and benefit from FDI Attract multinational firms and benefit from FDI in terms of technological transfer, employment, in terms of technological transfer, employment, ……

Generics producers preserve their independencyGenerics producers preserve their independency

LimitsLimits

Local firms are also dependent to foreign Local firms are also dependent to foreign laboratories (just copies)laboratories (just copies)

Local firms submit to a period of “inertia” Local firms submit to a period of “inertia” equal to the patent life of the brand name equal to the patent life of the brand name drug drug

bad effects when dealing with dangerous bad effects when dealing with dangerous diseasesdiseases

Spread a sort of “passiveness” instead of Spread a sort of “passiveness” instead of enhancing the sense of creativeness and enhancing the sense of creativeness and inventivenessinventiveness

What Role do Patents What Role do Patents Play ?Play ?

Axes of the Axes of the PresentationPresentation

1. The pharmaceutical industry in Tunisia, 1. The pharmaceutical industry in Tunisia, the focus on the production of genericsthe focus on the production of generics

2. Advantages and limits of a 2. Advantages and limits of a pharmaceutical industry based on the pharmaceutical industry based on the production of genericsproduction of generics

3. The role of patent protection in 3. The role of patent protection in promoting the pharmaceutical promoting the pharmaceutical innovation in Tunisiainnovation in Tunisia

An Encouraging Legal FrameworkAn Encouraging Legal Framework

Research units : 260 in 2005, Research units : 260 in 2005, 23% of them are laboratories of 23% of them are laboratories of medical studiesmedical studies

Exchanging program with Exchanging program with foreign researchers in prior and foreign researchers in prior and strategic fields (energy, strategic fields (energy, biotechnologies and health)biotechnologies and health)

Human ResourcesHuman Resources

School enrollment in higher education: School enrollment in higher education: 29% (2005) (12,2% Morocco, 15% 29% (2005) (12,2% Morocco, 15% Algeria)Algeria)

0,44% pharmacy students0,44% pharmacy students

Few number of Tunisian pharmacy Few number of Tunisian pharmacy students carry out pharmaceutical students carry out pharmaceutical researches in Tunisiaresearches in Tunisia

IImmigration to developed mmigration to developed countries (Europe)countries (Europe)

Financial ResourcesFinancial Resources

600 million€, 2006 600 million€, 2006 whole pharmaceutical sector whole pharmaceutical sector

Pharmaceutical R&D requires huge fundsPharmaceutical R&D requires huge funds

Special raw materials : very expensive + sometimes Special raw materials : very expensive + sometimes non available for some developing countriesnon available for some developing countries

Immigration to developed countries

Decrease in the innovation capabilities

Innovation Output Indicator Innovation Output Indicator PharmaceuticalPharmaceutical

Patent Grants in Tunisia (50%)Patent Grants in Tunisia (50%)

142113340

50

100

150

200

250

300

Total

US

Tunisian

National Institute of Standardization and Industrial Property (INNORPI, 2008)

Pharmaceutical Patents

Technological transfer => Technological transfer => access to new technologiesaccess to new technologies

-Promote local innovation spiritPromote local innovation spirit

-Improve local innovation Improve local innovation CapabilitiesCapabilities

-Encourage pharmaceutical Encourage pharmaceutical InnovationInnovation

In the In the short-short-termterm

In the In the long-long-termterm

-Increase prices of patented Increase prices of patented drugsdrugs

-Limit access of lower-income Limit access of lower-income people to patented drugspeople to patented drugs

-Encourage the production of genericsEncourage the production of generics

- Promote exports of genericsPromote exports of generics

-Attract FDI + employmentAttract FDI + employment

“Might”

To Conclude To Conclude … …

In pharmacy education, put a more emphasis on In pharmacy education, put a more emphasis on applied researchesapplied researches

Reduce bureaucracy and complicated Reduce bureaucracy and complicated administrative proceduresadministrative procedures facilitate access to facilitate access to informationinformation

Alternative sources of financing (Cooperation with Alternative sources of financing (Cooperation with foreign firms + privatization)foreign firms + privatization)

Keep encouraging the production of genericsKeep encouraging the production of generics in in order to assure the access of all patients to order to assure the access of all patients to essential drugs + Combine the short term effects essential drugs + Combine the short term effects of generics with the long term effects of patents.of generics with the long term effects of patents.

Have to wait until the

patent expires

When

Shall I

start

the

treatm

en

t

Doc ?

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