The South African word ubuntu represents the essence of being humane, and the understanding that humanity and good deeds are intertwined and impact upon others. The word has been highly influential in South Africa from the country's birth, has been misconstrued in its adolescence and should not be forgotten along the way to its future.

In 1999, South Africa was the stage of a heated debate on whether intellectual property restrictions were facilitating or hindering access to new healthcare technology. The debate, which swayed between hard fact and poignant emotion, introduced a new area of discussion concerning the significance of a framework that can foster economic growth, FDI, domestic capacity and, most importantly, access to medicine.


Now, 15 years later, South Africa has once again taken centre stage in a similar debate, but this time with important, new evidence to help balance out the previous emotion-driven discussion. Now, more than ever, the country needs to take consideration of ubuntu.

Wrong direction?

The government of South Africa has introduced a draft national policy that, if implemented, will downgrade the level of intellectual property protection afforded to innovators. In the context of intellectual property and public health, South Africa's minister of trade and industry, Rob Davies, has stressed that there “needs to be both incentives for innovation as well as ensuring public health and access to medicines”. However, the current state of the draft policy seems relatively one-sided and supporters of the policy believe that any attempt to challenge it will lead to dire outcomes, with access to medicine severely cut.

Among other elements, the draft policy proposes measures that seek to erode the intellectual property protection granted to innovative pharmaceutical products, including via the use of compulsory licences, refusal to extend patent term extensions and higher barriers for the grant of patents. The government of South Africa argues that it is within its legal right to impose these new rules and says that such measures are also consistent with the flexibilities afforded by the World Trade Organisation Agreement on 'trade-related aspects of intellectual property rights'.

The major question here is not about the legality of these measures but rather about their impact – specifically, whether the proposed weakening of the intellectual property regime can promote public health by means of increased access to medicine. Of additional importance is whether such measures also promote the ambition of the South African government to become a hub of biotech innovation.

Recently, South Africa's science and technology minster, Derek Hanekom, initiated a bio-economy strategy, which promotes the entire sequence of innovation, from research and development to the commercialisation of products. This strategy can only be realised if South Africa becomes a knowledge-based economy as opposed to the resource-based one that it currently is.

Living proof

The concern is that the current draft national policy might discourage innovators from placing their ideas on the open market for fear of misappropriation due to the lack of protection. Additionally, a weaker intellectual property regime will discourage investments and economic growth, and see crucial local innovators developing and promoting their products in other countries with more adequate protection.

It is important to understand that, even before the current draft national policy was announced, South Africa's intellectual property rules were not very favourable. The US Chamber of Commerce Global Intellectual Property Centre’s 2014 IP Index ranks South Africa’s overall intellectual property environment 18th out of the 25 countries it measured. In the ranking of patents and related rights, South Africa ties for last place. Moreover, in 2012, South Africa scored 64.92 out of a possible 100 in research firm Pugatch Consilium's Biopharmaceutical Competitiveness and Investment Survey, which based on proprietary analysis. It placed South Africa in the category of ‘limited ability to compete’, teetering on the category of ‘struggling to compete’.

The evidence we have today suggests that countries opting to use the intellectual property system rather than opposing it have actually managed to increase access to new drugs as well as to attract higher levels of investment.

The Organisation for Economic Co-operation and Development, and others, find a positive relationship between increased intellectual property protection and FDI. In particular, a 1% increase in the protection of intellectual property rights, measured by the Patent Rights Index, is associated with a 2.8% increase in the influx of FDI.

Singapore is a case in point, showing that significant economic improvements can be made if weak intellectual property regimes are brought in line with developed countries. Not only did Singapore change its country status from 'developing' to 'developed' in an extremely short period of time, but it also saw increased economic activity, making it one of the top 10 globally competitive markets. Similarly, Israel chose to improve its intellectual property regime, despite hosting the biggest generic pharmaceutical company – Teva – in the world.

US dominance

No less important is the fact that a stronger intellectual property regime does not affect access to medicine. If this was the case – that strong intellectual property regimes decreased access to medicines – then, practically, countries with the strongest intellectual property laws would have the biggest medicine access deficit. However, the exact opposite is true. For example, countries with the strongest intellectual property environments, such as the US, boast the highest number of generic companies, with 60% to 70% of the medicine volume in the US being generic. In fact, the first market that generic companies aim for is the intellectual property-bolstered US.

In the short term, the draft policy in South Africa might promote the production of generics, but that does not promise an increase in access to medicine. In the long run, innovation capacity decreases, FDI in pharmaceutical research and development favours more intellectual property-oriented jurisdictions, and South Africa remains on an undeveloped plateau, watching the rest of the world mature.

What South Africa desperately needs is to allow cooler heads to prevail and to leave emotional debates in the past. Discussions on the need to innovate have also passed – what is required now is a concrete national innovation strategy in order to foster development and growth in pharmaceuticals and other sectors. However, South Africa will struggle to convey this strategy to the world if simultaneously it signals that its intellectual property regime is becoming even weaker than before. 

Meir Pugatch is a professor of intellectual property, innovation and entrepreneurship at the University of Maastricht and the managing director of Pugatch Consilium. Jacques Stemmet is a consultant at Pugatch Consilium.