Patent Gridlock Harming The Ability To Create Lifesaving Cures

from the patents-costing-lives dept

Fri, Aug 8th 2008 12:38am — Mike Masnick

I've gotten way behind on my series of posts on intellectual property. I plan to pick it up again shortly. There's a big post I've been working on that I just haven't had the time to complete. However, one of the upcoming posts in the series is going to focus in on the question of pharmaceutical patents. While some claim that the pharma industry is an example where patents actually work effectively, there's plenty of evidence to suggest otherwise. I'll try to highlight much of that evidence, but it looks like Michael Heller is doing some of that already. Heller, the author of The Gridlock Economy, which we recently mentioned has penned a piece for Forbes, where he points out how the rise of patents in the pharma and biotech world is not leading to new cures. In fact, it's actively stifling them, by making it nearly impossible for certain types of research to be done. This is a point Nobel Prize winning economist Joseph Stiglitz has also been making for years.

Of course, some will point to some recent medical breakthroughs as evidence to the contrary, but as a New Yorker review of Heller's book points out, it's often much harder to see "foregone opportunities." But, the more you understand the economics of innovation and growth, the more you see how clearly pharma and biotech patents are stifling lifesaving advancements -- and that's not just a huge shame, it's incredibly destructive to human health, dignity and the wider economy.

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Filed Under: economics, gridlock, michael heller, patents, pharmaceuticals

31 Comments

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Anonymous Coward, 8 Aug 2008 @ 1:24am

patient and patent are far too simmaler words for my dyslexic brain to handle at this time in the morning.
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Rekrul, 8 Aug 2008 @ 1:49am

I remember reading an article years ago about a company that developed some type of disposable kit for filtering something out of the blood, I think it was cancer cells. I'm hazy on the details, but one of the primary developers of this device needed it himself or his chances of survival were slim. They finally perfected it and it worked perfectly. The developer used it to save his own life. Then some other company sued them for violating some patent that they held on a similar, but less effective device. A judge sided with them and ordered the company to turn over all their research and stop making the devices.
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Jim, 8 Aug 2008 @ 3:01am

I work for a small biotech company and I often feel quite torn on the issue. As a small company, a lot of long hours, low pay, and hard to raise money are put into the research. I want to see the work we do protected and pay off some day. And that is where the problem is. It doesn't matter if patents exist or not. Companies will want to protect their investments and when it comes to peoples health, they will always lose so that some company can make more profit.
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Lawrence D'Oliveiro, 8 Aug 2008 @ 3:01am

Health vs Capitalism
The health/pharmaceuticals industry is probably the worst possible example of capitalism in action. Consider the millions spent on the development of Viagra, versus the pittance going into cures for diseases like tuberculosis and malaria. They kill millions of people a year, whereas you never heard of anybody dying from the inability to get a stiff cock.
The difference, of course, is that sufferers of erectile dysfunction have enough money to add up to a nicely profitable market, whereas those afflicted with the real killer diseases are poverty-stricken stiffs from the third world.
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M Kelly, 8 Aug 2008 @ 3:32am

Re: Health vs Capitalism
Viagra was not developed for erectile dysfunction but as a potential blood pressure treatment. Pfizer could not have known what a demand there would have been for such a product by the public. A big percentage of the profits from this drug go back to their pipline of research drugs for many different diseases. If it wasn't for capitalism then they would not have this investment in the first place. Did you vote communist at the last election? Even if you did that is a completely flawed system, try getting your healthcare in Russia or China.
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Anonymous Coward, 8 Aug 2008 @ 5:01am

Re:
Apparently your brain cant handle spelling either ("simmaler"?), as well as actually knowing what "dyslexia" is (its not a formal diagnosis, nor would someone with that difficulty actually confuse "patient" and "patent")
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Anonymous Coward, 8 Aug 2008 @ 5:09am

Re: Re: Health vs Capitalism
Common misconception, but China isn't actually communist.

That aside, you've hit it dead on. Viagra (like many useful discoveries) was an accident that provides some sociological benifit while funding more important research. Say what you will about "Smiling Bob" but at least there is a garunteed income source for at least one pharmacutical research company.

Now if only they can find a cure for all forms of cancer and not charge a penny for it...
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Anonymous Coward, 8 Aug 2008 @ 5:53am

Re: Re: Health vs Capitalism
A big percentage of the profits from this drug go back to their pipline of research drugs for many different diseases.
An even bigger percentage goes back into advertising and marketing with some also going to lobbying. Research isn't exactly at the top of the list.
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Overcast, 8 Aug 2008 @ 5:57am

Yes, but all that is irrelevant if some politician or board chairman is losing profit!

Used to work for a Hospital - was talking to our Network Engineer there one day, I was just a contractor for a bit there. He was telling me a story of how he, and other IT managers were out golfing with the CEO of the Corporation that ran the hospital. During the course of the day, a medical care chopper flew overhead - at which the CEO commented, "Ahhhh, the sound of revenue".

If that doesn't explain a WHOLE lot right there, I'm not sure what does :)

Typically, when I see an Ambulance or Medical Care Helicopter, if I happen to have a thought, it's usually a hope that whomsoever in there will live and all, but obviously the people in administration at the hospitals think of this quite differently.
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Anonymous Coward, 8 Aug 2008 @ 5:58am

Re: Re: Re: Health vs Capitalism
Say what you will about "Smiling Bob" but at least there is a garunteed [sic] income source for at least one pharmacutical [sic] research company.
Those "Smiling Bob" commercials are a great example of how the pharmaceutical industry spends more money on advertising and marketing than research.
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Anonymous Coward, 8 Aug 2008 @ 6:18am

Re:
During the course of the day, a medical care chopper flew overhead - at which the CEO commented, "Ahhhh, the sound of revenue".
I thought you going to say that the CEO got a call shortly thereafter that his mother had been taken to the hospital with a heart attack but had died in the chopper on the way.
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Anonymous Coward, 8 Aug 2008 @ 6:28am

Smiling Bob is for Enzyte which I believe is in trouble becuae the product does not really work. The CEO was found guilty of Mail Fraud, Bank Fraud and Money Laundering.

Now that people can patent genes they charge insane amounts of money for companies to develop screening procedures that look for early genetic mutations, such a breast cancer.
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José Luis, 8 Aug 2008 @ 7:12am

Drug testing...
A few weeks ago, i read this article:

http://www.econlib.org/Library/Columns/y2008/HooperFDA.html

that discuses the costs of drug testing and how different it is treated opposed some other things that are as much a threat to life as drugs (ex: peanut allergy is as deadly as many drugs, but food industry doesn't go through length testing phases).

OF COURSE, no one wants anything remotely resembling talidomyde to happen again, but there is some truth in that article, and the costs of that testing phase add up to the investment.

I don't think pharma companies will change course, but with the current advances in simulation of living cells and organisms, soon much of research will be more of an informatics activity. This will hopefully drop down R&D costs and even allow universities to do the research or, why not, individuals or open sourced drug projects releasing results to the public domain.

Do you think pharma companies will lobby against this?
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Anonymous Coward, 8 Aug 2008 @ 7:24am

Re: Re: Re: Re: Health vs Capitalism
"Smiling Bob" commercials are for Enzyte, not Viagra.
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MLS, 8 Aug 2008 @ 8:12am

For he sake of clarity, it is useful to bear in mind that Mr. Heller's publications are directed to both tangible and intangible property. Just as wide dispersion of rights associated with patents may have negative economic effects, he notes the same is likewise true concerning real property (i.e., land).

One interesting observation is that he is not an advocate of eliminating patents, but does advocate "tweaks", and speaks approvingly of a least one provision contained in the pending legislation known as the Patent Reform Act of 2006, namely, damages calculations. Unfortunately, though, the provision he supports is already ensconsed in our laws, and all the provision really does is to add unneeded complexity (i.e., longer and more protracted litigation and the resultant expense).
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mobiGeek, 8 Aug 2008 @ 9:06am

Re:
So are you assuming that "patents" are the only way to protect your investment?
Do you not think that there is a different way to do so, similar to what is done in other fields (marketing, bundled services, delivering the best version of a given product to market, etc...)?
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Willton, 8 Aug 2008 @ 1:54pm

Re: Re:
So are you assuming that "patents" are the only way to protect your investment?

Do you not think that there is a different way to do so, similar to what is done in other fields (marketing, bundled services, delivering the best version of a given product to market, etc...)?

If there is, by all means, share with the group.
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Anonymous Coward, 8 Aug 2008 @ 1:55pm

Re: Re: Health vs Capitalism
Try getting it in Sweden.
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Anonymous Coward, 8 Aug 2008 @ 2:04pm

Drug Combinations
I head this a while ago so some of the details are hazy, but I remember hearing that drug combinations were a big thing in pharmaceutical companies. The gist of it was Drug A is ineffective by itself, but combine it with Drug B, even if Drug B has no known affects to the issue Drug A is combating and all of a sudden Drug A works wonders.

The issue was that the pharmaceutical companies were not even considering drugs that had gone into the public domain as they would be unable to patent them. So you have all of these existing drugs that have the potential for wondrous things and they aren't even being touched since they can't be patented
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Anonymous Coward, 8 Aug 2008 @ 2:09pm

Re: Re: Re:
Seems to me he was asking MLS if patents are the only way to protect the investment is with patents, and offered several examples as alternatives, numbnuts.
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Willton, 8 Aug 2008 @ 3:12pm

Re: Re: Re: Re:
Seems to me he was asking MLS if patents are the only way to protect the investment is with patents, and offered several examples as alternatives, numbnuts.

Those aren't examples. Those are generalized concepts that are not tailored for this particular field. If mobiGeek is going to offer up "marketing" or "bundled services" as a viable alternative to protecting one's investiment in a biological invention, he should explain how.
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Mike (profile), 8 Aug 2008 @ 3:57pm

Re: Re: Re: Re: Re:
Those are generalized concepts that are not tailored for this particular field.

Actually, they're quite standard principles that apply in all businesses -- including healthcare.

The problem is that you seem to assume that these standard business concepts don't apply, and only patents will suffice. It would seem that the burden is on you to explain why basic economics doesn't apply in this area, where it seems to apply in every other area.
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MLS, 8 Aug 2008 @ 4:30pm

Note:

The comment at 16 was in response to the comment at 3, and not to anything I posted.
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Anonymous Coward, 8 Aug 2008 @ 9:24pm

Re: Re: Re: Re: Re: Health vs Capitalism
"Smiling Bob" commercials are for Enzyte, not Viagra.
Oops, bad example. I rarely watch television and was going on memory from years ago.
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Ronald J Riley (profile), 9 Aug 2008 @ 7:06am

Critical Thinking Skills Lacking
"But, the more you understand the economics of innovation and growth"

The problem Mike Masnick is that you only think you understand the economics of innovation. There is a huge difference between being a copycat, a parasite on inventors and actually being an inventor.

Egos being what they are no one wants to admit that they average or worse. It is clear from your writings Mike that you have a very large ego. We see lots of large egos in the inventor community and I most certainly see lots of large political egos. Both inventors and politicians probably have some justification of their egos. But Mike, I just do not see any justification for your ego.

You most certainly write well but you your critical thinking skills are dismal. Perhaps the reason of your constant attacks on inventors is a deep seated resentment that you are personally incapable of doing what they do. Perhaps another component is greed, that you personally resent the possibility that one of those inventors will morph into a mythical troll and kick the tar out of you if they catch you trying to profit from their inventions without paying them for their creativity.

And while you might resent those who can actually invent it is a fact that if you succeed in socializing their inventiveness they will have no incentive to continue in invent. The result would be a staggering drop in humanity's collective technological advancement. While we would continue to small incremental improvements of the nature which large companies produce the big breakthroughs, the earth shaking disruptive technologies would pretty much stop. America's economic engine would also stall and our collective economic prospects would dim at an even faster rate then they are now.

Ronald J. Riley,

Speaking only on my own behalf.
Affiliations:
President - www.PIAUSA.org - RJR at PIAUSA.org
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.patentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (202) 318-1595 - 9 am to 9 pm EST.
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John Wilson, 9 Aug 2008 @ 3:04pm

Re: Critical Thinking Skills Lacking
I see that critical attacking skills are in good supply, though, RJR.

Just a simple question while you consider, with pride no doubt, your attack on Mike, please name me one invention that did not build on something that already existed. One thing that came out of nowhere to rock the world, even a little.

I'll wait.

Any time period in written human history will do, if you're having trouble.

In the meantime you're peddling a myth and not one that holds up at all well to scrutiny.

Though I see by your affiliations you're probably doing rather well by it even if most "inventors" don't.

ttfn

John
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Willton, 10 Aug 2008 @ 12:46am

Re: Re: Re: Re: Re: Re:
Shortstop: Still a nightmare. One of the more frustrating combinations of a non-productive starter (Jack Wilson) with a bad contract, paired with a system with no short-term prospects at the position. The Jack Wilson era likely ends after 2009, as Pittsburgh will almost gladly pay $600,000 to avoid giving him another $8.4 million, but as far as who takes over the position at that time, it's a bit of a mystery. The organization spent their third- (Jordy Mercer) and fourth-round (Chase D'Arnaud) picks on polished college shortstops without a ton of upside, and they already have one of those in the system in Brian Friday, a third-round selection from last year who has plus defensive skills, good speed, excellent contact abilities, and no power.

Disagree. The presumption has been for the past 200 years that these "standard economic principles" don't lead to the desired result when it comes to creations of the mind; that's why we have patent law. So, it would seem to me that if someone is profering the notion that these "standard business concepts" are more than enough to protect one's investment in the research for a new pharmaceutical product, the burden of proof is upon the one profering the notion, not someone else.
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Anonymous Coward, 10 Aug 2008 @ 12:49am

Re: Re: Re: Re: Re: Re:
Please disregard the former post. I got my blog posts crossed.

Actually, they're quite standard principles that apply in all businesses -- including healthcare.

The problem is that you seem to assume that these standard business concepts don't apply, and only patents will suffice. It would seem that the burden is on you to explain why basic economics doesn't apply in this area, where it seems to apply in every other area.

Disagree. The presumption has been for the past 200 years that these "standard economic principles" don't lead to the desired result when it comes to creations of the mind; that's why we have patent law. So, it would seem to me that if someone is profering the notion that these "standard business concepts" are more than enough to protect one's investment in the research for a new pharmaceutical product, the burden of proof is upon the one profering the notion, not someone else.
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Mike (profile), 11 Aug 2008 @ 2:11am

Re: Re: Re: Re: Re: Re: Re:
Please disregard the former post. I got my blog posts crossed.

Well, we could use a good baseball discussion around here, but even that's not going to help the Pirates find a decent shortstop any time soon.

The presumption has been for the past 200 years that these "standard economic principles" don't lead to the desired result when it comes to creations of the mind

Well, we've hardly had a chance to find out, right, since they've been blocked by patent law due to a misunderstanding of economic incentives 200 years ago.

So, it would seem to me that if someone is profering the notion that these "standard business concepts" are more than enough to protect one's investment in the research for a new pharmaceutical product, the burden of proof is upon the one profering the notion, not someone else.

Is the economic evidence presented in the past not enough? Eric Schiff's evidence concerning the Netherlands and Switzerland? Lerner & Jaffe's evidence concerning the impact on the strengthening of patent systems vs the amount of innovation? Petra Moser's evidence on innovation in countries without patent systems? Levine and Boldrin's research on pharma patents? Bessen and Meurer's research on patents and innovation?

There's plenty of evidence and it all points in the direction that standard economics works.

What's the evidence that standard economics doesn't work and needs to be propped up by a gov't monopoly system?
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stv, 11 Aug 2008 @ 5:52am

patent term
but heller misses the point when he argues there should be limits on property rights. when it comes to patents there are limits. a patent is now only good for 20 years from date of filing and with the backlog at the PTO and their hesitancy in issuing broad patents patentees may only get a fraction of that. Therefore, there is great motivation for patentees to settle now. The longer they wait to settle, the less they get and if they wait too long they get nothing. Only a fool would allow that to happen. The system inherently has its own solution. You are trying to fix a flat tire which is not flat.
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Ana Calderon, 21 Jun 2011 @ 2:02pm

Heller�s paper published in Forbes magazine
Do you have the name of the paper by Heller published on Forbes magazine regarding the pharma industry??? I would really like to know how to find it.
Thanks
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