Insurance and IP - an academic view

For years, I have held the view that IP (intellectual property) is no more than a trade barrier imposed by rich countries on poorer ones. I also maintain that once countries like India develop enough to generate their own IP, these very same developed countries will start questioning the need for IP.

Another issue I have long felt that India is going the wrong way on, is patent protection for medicines. Given the large population in India requiring cheap medicines, the model of insurance-led health care is completely flawed. Our negotiators at the WTO have sold India down the path of disaster by conceding to patent protection for pharma products in India, and by allowing private sector companies to offer health insurance - both steps that will take the price of medication out of reach of the common man.

A recent article I read in the TOI from a nobel prize winning economist provides some support to my arguments.  The operating parts from a discussion with Joseph Stiglitz, are :

On Insurance - "Rather than provide better healthcare at lower costs, insurance companies innovate at finding better ways of discrimination. They are inefficient because they are trying to figure out how to insure people who don't need the cover and keep out people who need it......India would be in a terrible mess, given the size of its population, if it went down the wrong route (of private companies for health insurance). They should learn from the mess that the US has got into."


On IP - "...the benefits of IP have been exaggerated and the costs underestimated. IP creates monopolies. And it does interfere with economic efficiency by interfering with the flow of knowledge and the use of knowledge, particularly for developing countries....The question is whether IP promotes innovation. Increasingly, the evidence is that it may actually impede innovation. It is leading to infinite negotiations around patents. More money is being spent on lawyers than on research. The legal cost of using the system takes up more resources than the benefits from the system."


Now that, from a Professor of Columbia University, and a former Chief Economist of the world bank - may carry more weight than my own arguments - but I'm happy that atleast a part of the academic world is taking a sensible stance. I wonder if the bureaucrats in the Indian government that make up these policies are listening!