In the US, patents on medications allow pharmaceuticals exclusive rights to market and sell a drug for the first 20 years. Many have hoped that the TPP would substantially reduce or eliminate this period. Since the US's patent duration is among the longest in the TPP, reductions were expected as all nations' patent systems are brought more in line with each others'. Pharmaceuticals, however, wanted to implement a relatively long patent period (some rumored this to be about 12 years). This would have delayed the introduction of cheap generics, and pharmaceuticals would be able to maintain their monopolies for longer. This makes medicine expensive. However, the period of monopoly is important. Producing, developing, and researching new drugs is extraordinarily expensive, time consuming, and risky. To incentive such activities, which provide society with new and superior medicine, a brief period of monopoly is needed to ensure profit. If patents were completely eliminated, there would be too little incentive to spend billions developing new drugs. So the TPP struck a middle (read: unpopular) ground. Pharmaceuticals dislike the deal because their patents will be shortened, and others dislike it because they still have patents.
The TPP restricts new firms from marketing the same or similar pharmaceuticals within at least 5 or 8 years of the first company being allowed to do so. This reduction in patent duration upsets Pharmaceuticals because it cuts into their profits. For the duration of their patents, the company has a monopoly on that drug, which allows them to charge whatever price they like. For drugs that do not have substitutes, people suffering from the disease it treats must choose to buy the extremely expensive drug, or go without. For those with terminal or extreme illness, the later option is all but unthinkable. Thus, for the duration of the patent, companies have extraordinary pricing power, as can be witnessed by recent price hikes for many prescriptions. Since it is more expensive per pill the more you make, past a certain point, and since it is more difficult to produce a million pills in a day than a thousand, monopolistic companies also tend to restrict output, in addition to raising prices, to maximize profit. In fact, limiting the number of pills they produce is the simplest way of raising prices, because a more scarce product is more valuable. This means that not only are drugs expensive, but there often aren't enough of them. This is not to say that Big Pharma is conspiring to let millions die by withholding drugs. However, many drugs become much more widely available once generics are allowed to compete, because more companies expand production and the competition lowers the price. Thus, any measures that reduce the duration of the pharmaceutical companies' monopolies benefits consumers, as long as the period is not so short as to stop companies from researching new medicine altogether. Hence the reduction, but not elimination, of the length of the patents.
Naturally, their are many caveats to the eight year protection period. The treaty states that a company's right to market a drug exclusively must be protected in two ways. They must do so as described in Article 18.50.1 and Article 18.50.3 either for at least 8 years or at least 5 years. If the drug is completely new, they get an 8 year period, and they get 5 years if the drug is new, but similar to existing drugs. These measures provide pharmaceutical companies with a period of monopoly to ensure that they recover their investment from developing new medicine, but allow generics to be introduced to compete with them across all member countries and drive the price down in a more reasonable amount of time.
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By: Jonathan Wood