Can a Market Device Make a Market More Moral? the Case of the Geneva Medicines Patent Pool

Market innovation happens when market actors - multinational firms, entrepreneurs, universities, customers, investors, regulators, consultants or intermediaries - reconfigure the interfaces, practices or social and material arrangements in and through which market exchanges takes place (e.g. McKague, Zietsma and Oliver 2015; Kjellberg, Azimont and Reid 2014). As market innovation is often distributed between different actors, market devices can serve an important coordinating and shaping function in attempts to innovate markets (Doganova and Eyquem-Renault, 2009; Muniesa et al. 2007). Changes in a financial software algorithm, for instance, can have far-reaching consequences on how market exchanges are conducted (MacKenzie and Spears 2014). Market devices are particularly interesting to study if and when they are used deliberately or strategically to redevise the calculation and valuation work happening within a market in order to make the market ‘better’ or more just, as previously described for instance in the case of carbon trading (MacKenzie, 2009; Veal and Mouzas, 2012). In these cases, the introduction of a new market device triggers an ‘in vivo experiment’ (Callon, 2009) that has the potential to change power distributions, calculative agencies, and market practices. Building on these recent advances in our knowledge of the social study of markets, this paper’s question, thus, is whether market devices can be configured so that they can reshape a market’s frames to effectively include values emanating from civic society. In other words, we investigate how market devices can help make a market ‘more moral’, to speak with the Mini-Conference’s theme.

We focus our inquiry on an industry that is situated at a fault line between market and civic frames: the pharmaceutical industry (Hunter, 2010). With promises of improving public healthcare, pharma companies have social responsibilities that reach beyond commercial profitability and shareholder interests (de Wildt and Khoon, 2008). However, pharmaceutical firms have been heavily criticized in the past for being primarily focused on recouping R&D spend and maximizing shareholder profits, perhaps to the detriment of attending to their societal mission (Abraham, 2008). Observers note for instance that the spiralling costs of pharmaceutical R&D act as substantial barriers that prevent for instance poorer countries from developing and nurturing their own pharmaceutical markets. A lack of innovation pressure and shareholder profit expectations also appear to have contributed, at least in the past, to slow the development of vaccines and drugs for some diseases (de Wildt and Khoon, 2008; Callon, Lascoumes and Barthe 2009). The patenting system represents a focal point in the criticisms levied against the pharmaceutical industry.

We study a market device that was conceived as a potential solution to these tensions in the pharmaceutical market: the so-called Geneva Medicines Patent Pool (MPP). This patent pool, in existence since 2010, brings together pharmaceutical companies’ patents for HIV and antiretroviral drugs for distribution and sale in developing countries. Patent pools are voluntary market mechanisms that allow for a collective management of intellectual property rights (IP) such as patents, copyrights, know-how and data (Serafino et al, 2007). In effect, “a patent pool allows interested parties to gather all the necessary tools to practice a certain technology in one place, e.g. ‘one-stop shopping,’ rather than obtaining licenses from each patent owner individually.” (Clark et al, 2000, p.9). Patent pools have existed since the mid-1850s in R&D intensive industries (Teulings 1982; Serafino et al. 2007). Their remit is often mainly commercial, either to lower R&D and coordination costs and risks in an industry or to enforce a common standard. However, as in the case of the US aircraft industry in the First World War, the creation of patent pools can also be entwined with political objectives.  Current literature demonstrates patent pools’ advantages in terms of overcoming patent thickets (Barpujari, 2010) and facilitating access to innovations where this would otherwise be prevented through patent enforcement (Bermudez and Hoen, 2010; Childs, 2010). However, some voices also highlight their inherent instability, as the very logic of a patent pool arguably stands in direct tension with the raison d’êtreof the idea of intellectual property and patent system, and have raised concerns that patent pools cement power structures in markets rather than democratizing them (Aoki and Schiff, 2008; Jeitschko and Zhang, 2014).

We will critically contrast the original intentions behind the MPP’s creation and its contributions, after five years in existence, in innovating pharmaceutical patent management practices. The MPP, as a specific example of a patent pool, was created with the intent of redevising the pharmaceutical market from the inside out – of “kicking away the ladder” (de Wildt and Khoon, 2008, p.53) of current patent regimes that are purportedly standing in the way of social innovation and public health equality (Commission on Intellectual Property Rights, 2002). The hope of its founders was that it would unlock the pharma market’s potential for social innovation by breaking ingrained market practices relating to secrecy in R&D, IP and patent management. Yet, despite good levels of acceptance on the part of pharmaceutical companies, many voices remain highly critical of the real power of this pool to ‘redevise’ the pharmaceutical market in a fundamental way. Our approach is exploratory: we see the Geneva Medicines Patent Pool as a market device ‘in the making’ (Latour, 1987), and we follow this ‘making’ from its conceptual beginnings in the mid-2000s to current dates. Our method combines interviews with diverse actors in the pharmaceutical market and civic society with archival research to trace and understand this device’s role in market and social innovation around the pharmaceutical industry.

References upon request