Question

What are intellectual property rights? and basic introduction to the WTO's illtellectual property agreement.

explain intellectual property rights in the context of the chapter's analysis of monopoly

the TRIPS agreement has come under criticism particular in the area of pharmaceutical drugs. discuss the tradeoffs in public health involved with granting strong patents for pharmaceuticals or other medical products.

Answer 1

Intellectual property rights are the exclusive rights which companies get on selling a product or a service which is based on a unique idea which cannot be copied by others due to protection by this law itself. The core idea behind this law is that companies such as Pharmaceutical ones invest huge sums of money towards research and development and must receive benefits for the same. The exclusive rights to sell exhausts in a couple of years as per local regulations and then others also get the opportunity to manufacture the same. It is important to note, that not all products have the same years of exclusive rights granted and these are granted only for creations of the mind which are not physical but rather intangible in nature.

The World Trade Organization and its agreement on intellectual property is one wherein all member nations have agreed to follow intellectual property codes of one another and vow not to copy the creation of member nations for their own benefits. This then means that the intellectual property is protected not just from domestic competition but even internationally if a product is created there is no one who can copy the same for a designated number of years giving exports a boost for the country. For example, if a Pharma company in the United States produces a new vaccine, it sees not only local protection but also all other countries in the World Trade Organization vow to respect the Intellectual property rights issued in the United States and ensure that no infringement takes place. It also gives companies a forum to appeal in case of any breach.

Now, coming over to the problem of monopolies and trade-offs in the pharmaceutical industry, we know the fact that these companies spend huge sums of money towards research and development of medicines and thus are protected by the sole right to sell these which is usually at a higher cost. As this takes place, public health care administration becomes expensive as the medicines can freely be priced by those that create the same.

It is important however for any economy to implement the same, because the trade-off that comes from higher costs can be contained by increasing the income for the poor who are unable to afford them at a higher rate, but if intellectual property rights are not placed, companies may be discouraged to innovate any further, which could lead to bigger problems than just, creation of monopolies. It is important to note, that this rather can be called first movers’ advantage than being a monopoly. Other companies can produce different medicines which yield the same result and still encourage healthy competition in the industry. However, indeed as a result of intellectual property rights, the cost of public health care administration does go up because of the exclusive rights which are given to pharma companies to sell a particular medicine.