Patented Brand Drugs are Essential Facilities and Regulatory Compacts

The COVID-19 pandemic and health crisis shed light on the need for more affordable patented drugs. Brand drug companies argue that they need to recuperate their R&D, marketing, and advertising expenses. The incentive to innovate also needs to be preserved. Drug companies are entitled to a profit and a return on their investment, just as afforded to utility monopolies. Intellectual property and human rights clash relative to access to patented drugs. We provide several proposed approaches to solving this dilemma and conclude with an argument that patented drugs should be considered a public utility. A model based on public utility approach has a great deal of merit as a model for setting prices for essential drugs and treatments. However, the price setting should not be the province of back-room discussions between drug companies and insurers. Prices should be negotiated in public with full transparency just as electricity rates are. Investor-owned utilities are good businesses and provide reasonable and regular return on investment for their owners. This can happen for manufacturers of essential drugs as well.