Vanderbilt Law Review

Article Title

The Pharmaceutical Industry and World Intellectual Property Standards


F. M. Scherer


When I was a high school student during the late 1940s, the first so-called "wonder drugs"-initially penicillin and then the broad-spectrum antibiotics such as tetracycline-were entering the U.S. market. From their profitable experience developing the broad- spectrum antibiotics, the leading pharmaceutical companies of America and Europe acquired a strong research orientation that led to a cascade of new therapeutic entities, including additional antiinfectives, vaccines, diuretics, and then other agents to reduce heart attack risks, tranquilizers, antidepressants, birth control pills, anti-fungal agents, immunosuppressants, cortico-steroids, AIDS inhibitors, powerful pain relief agents, and many other agents effective against specific diseases. Thanks to this pharmaceutical revolution, life spans have been prolonged, the incidence and duration of hospital stays have been reduced, and the quality of countless citizens' lives has been enhanced.'

The benefits of modern pharmaceutical therapy have accrued mainly to the citizens of the world's more prosperous nations. United Nations staff have estimated that average purchases per capita of modern pharmaceutical products (excluding traditional medicines) in 1990 (calculated at prevailing exchange rates) in diverse parts of the world were as follows:

North America $123.90 European Community 102.90 Other Western Europe 85.70 Japan 276.60 South and East Asia 5.00 China 4.80 Latin America 20.30 Sub-Saharan Africa 3.30

A rough extrapolation of these figures reveals that the 73 percent of the world's 1990 population located in south and east Asia, including China, Sub-Saharan Africa, and Latin America, consumes only 16.2 percent of modern pharmaceutical output by dollar volume. One consequence of the inadequate purchasing power that limits such nations' ability to consume pharmaceuticals is a higher rate of morbidity and debility, which in turn impairs the growth of income so that pharmaceuticals can be afforded-a vicious cycle.