This article explores the lively issue of whether using the patent system as a one-size- fits-all system to regulate the pharmaceutical industry is justified. In assessing the shortcomings of the patent system, this paper will discuss the problems inherent in the patent system, which result from its reliance on market forces to generate royalties to incentivise pharmaceutical research and development. It will be argued that the system at present does not sufficiently account for public health interests, a dimension unique to the pharmaceutical research and development industry. By linking financial returns to market demand for a product at monopolistic prices, an incentive system rewards the marketing of a product to consumers able to pay for the product, and not necessarily the health benefits of that product conferred on the community. Consequently, this article contends that reform is necessary.
The proposal of a Health Impact Fund, as advocated by Professor Thomas Pogge and Professor Aidan Hollis, will then be evaluated as a national scheme in the context of Australia's regulatory environment in the latter part of this article. The advantages of a Health Impact Fund, a prize system using a direct measure of health benefits for pharmaceutical treatments registered with the fund to determine the size of the prizes, will be explored and a critique of the adoption of such a system to complement the Australian patent system will be made. The current practical and legal challenges faced in implementing such a system will be discussed. Despite the potential obstacles in implementing a Health Impact Fund on a national scale, this article contends that having a voluntary scheme to complement the existing patent system is a beneficial option that is worth considering in light of the recent focus on pharmaceutical patent reform.
BSc, LLB (Hons) University of New South Wales. Sincere thanks to Dr Catherine Bond and two anonymous reviewers for feedback during the drafting of this paper.
© 2012 Journal of Law, Information & Science and Faculty of Law, University of Tasmania.