The Report is entitled: Promoting Innovation and Access to Health Technologies. But that’s false advertising. The report recommends shredding patent protection for new medicines and claims that the cost of medical innovation should have nothing to do with prices.
I am not surprised. The recommendation has nothing to do with the facts. Rather, the panel claims that there is "policy incoherence between the justifiable rights of inventors, international human rights law, trade rules and public health.”
Really? Seems to me that the thousand-fold improvement in public health worldwide is the result of the commercialization of medical inventions. As Nobel Prize winning economist Angus Deaton has observed: “Progress in health has been as impressive as progress in wealth. In the past century, life expectancy in the rich countries increased by thirty years, and it continues to increase today by two or three years every ten years. Children who would have died before their fifth birthdays now live into old age, and middle-aged adults who once would have died of heart disease now live to see their grandchildren grow up and go to college. Of all the things that make life worth living, extra years of life are surely among the most precious.”
But the UN panel breezes through how this progress has been achieved – and how countries such as Venezuela has starved its people -- to argue that inequalities of access require redistribution and confiscation of private property.
To be sure, progress has opened up inequalities as new medicines originated in America (for the most part) and were consumed there first at launch prices that put such drugs out of reach for much of the world. As Professor Deaton notes: “These “health inequalities” are one of the great injustices of the world today... (But) when new inventions or new knowledge comes along, someone has to be the first to benefit, and the inequalities that come with waiting for a while are a reasonable price to pay. “
That is, eliminating inequality is less important than eliminating disease or poverty. And in my opinion the UN panel’s ideas and ideology should be judged by whether or not it will increase absolute well-being not whether it makes Paul Krugman happy.
The idea that letting rogue states violate IP will somehow increase well-being should have died with Venezuela, Argentina Brazil, India or Thailand. There is no empirical evidence that state regulation promotes betterment. On the contrary, the countries pushing for greater government control over private ideas are also societies where the extreme inequality of power strangles growth, including Russia and China.
Not surprisingly, in such countries the confiscation of IP is just another tool for rewarding rich and powerful interests. Government production of medicines through compulsory licensing with contracts to produce and counterfeit US developed innovations. As Deaton notes: “Powerful and wealthy elites have choked off economic growth before, and they can do so again if they are allowed to undermine the institutions on which broad-based growth depends.”
The UN Panel is not simply assaulting patent protection. It is attacking, as the brilliant economist Deirdre McCloskey observes, two levels of ideas: the ideas in the heads of entrepreneurs for the betterments themselves (the electric motor, the airplane, the stock market); and the ideas in the society at large about the businesspeople and their betterments (in a word, that liberalism).
The UN Panel on Patent Expropriation is, to paraphrase McCloskey “obsessed with first-act changes that cannot much help the poor, and often can be shown to damage them grievously, and are obsessed with an angry envy at the consumption of the very rich. They are willing to stifle, through the generation and commercialization of ideas that lead to greater well-being the trade-tested betterments that in the long run have gigantically helped the poor.”
This assault on health innovation is not only an attack on American productivity, it is a direct hit on the access to medicines the panel professes to promote.