ABSTRACT
Mazzucato, 2006), was markedly different up until the 1980s due to its binary, vertical R&D structure. While the upstream open science was being conducted in public sector laboratories, research institutes, universities and teaching hospitals and commercial innovation was the domain of the “big pharma” (Cockburn, 2004). The innovation system worked primarily on a model where basic research of significance to commercial applications was conducted in the public sector institutions, which were funded through governmental programmes and grants. These were then shared with the “big pharma” that then developed commercial product and process innovations of importance to global health concerns. The global regulatory system has for long structured itself around the needs of the “big pharma”, which followed the “blockbuster” drug model: drug discovery and development required large scale investments, uptake of enormous risks, time spans ranging between 10 and 15 years, but could be copied at marginal expense. Hence, there was a need to retain the incentives of the firms to continue investments by way of granting IPRs, as well as disabling regulatory hurdles to newer technologies that could help enhance product range and quality.4 Pharmaceutical firms from latecomer developing countries were not significant players in this landscape. Over time however, the “big pharma” and the blockbuster model has come under enormous pressure especially since the 1980s, since there have not been many blockbusters in recent times to justify the strong regulatory systems that have been put in place. Although this can quite logically be attributed to the fact that technologies that are invested in today only result in commercial entities after significant time lags, and thus the results may be some time away, global “big pharma” has been under immense pressure to produce results. This has catalysed the series of changes mentioned at the start of this chapter, including mergers and acquisitions within the big pharma to maintain productivity, costcutting measures such as outsourcing to firms, especially in India and China which are able to perform several stages of the R&D process at a fraction of the costs. The pressure to deliver in the 1990s resulted in a series of global mergers and acquisitions amongst global pharmaceutical firms that focused exclusively on enhancing in-house productivity of R&D (CIPIH, 2006). At the same time, countries that housed frontier innovation capacity came up with regulatory measures that sought to ensure more commercial orientation of basic research within universities through the encouragement of university patenting through regulations such as the Bayh-Dole Act in the USA, and other incentives structured to further university-industry relations, in an effort to help boost product pipelines based on genomics and biotechnology (see Bartholomew, 1997; OECD, 2000).5 These changes were accompanied by trends towards broader patent scopes6 and lower novelty standards for pharmaceutical patents in individual countries justified usually on grounds of the peculiar features of life sciences research, and a move towards uniformly strong IPRs worldwide.7
