The USPTO: Where Up Is Down, Expensive Medicine Saves Lives, And Cheap Alternatives Violate International Law

from the not-a-surprise dept

Tue, Jul 3rd 2012 7:29am — Mike Masnick

Well, this is unfortunate. We've written a few times about how various countries, under the TRIPS agreement are able to break patents on important medicines in the interest of public health. Most recently, we wrote about how India did this with a cancer drug made by Bayer called Nexavar. Despite the fact that Bayer has more than made back the money it spent bringing Nexavar to market, it's been pricing the drug at an unaffordable $70,000/year. After India allowed a small bit of competition, the price has dropped. We've seen that the USPTO doesn't like this at all and has tried to claim that high priced drugs are good for one's health, but that's beyond ridiculous to anyone who actually thinks.

Of course, "thinking" and "Congress" aren't words that often go together, so it appears that the USPTO is now trying to pull one over on Congress, with USPTO deputy director Teresa Stanek Rea misleading Congress by suggesting that these efforts violate international agreements like TRIPS. Unfortunately, TRIPS says exactly the opposite:

Rea told the committee, saying she believes the issuance of the Indian compulsory license was in violation of the Agreement on Trade Related Aspects of Intellectual Property Rights, an international pact administered by the World Trade Organization which sets minimum standards for intellectual property regulation. Rea said the USPTO is working to stem the tide of IP infringement in foreign countries by the use of a host of training programs and educational efforts aimed at foreign officials and judges along with the placement USPTO overseas IP attaches in Thailand, China, Russia, India, Brazil and Egypt.

Article 31 of the TRIPS Agreement expressly permits compulsory licenses as does the much earlier Paris Convention on the Protection of Industrial Property. The U.S. Itself routinely makes government use of patented inventions pursuant to Congressional authority under 28 U.S.C. Sec. 1498, but also has other laws allowing compulsory licenses in specific circumstances. Compulsory licenses have been allowed globally in the vast majority of intellectual property regimes since the 19th century. And, the patent on Nexavar in India had been granted under a 2005 Amended Patents Act that clearly articulated compulsory licensing rights at the time that Bayer prosecuted its patent and the patent was granted.

Finally, and most to the point, the US signed the Doha Declaration on the TRIPS Agreement and Public Health that pointedly grants countries the right to issue compulsory licenses, to define the terms upon which such licenses are granted – without restrictions, and to define the emergency circumstances that permit licenses to be granted without any prior notice to or negotiation with the patent holder (note: these expedited, no-negotiation procedures were not used in the Natco case). Under the Doha Declaration, countries are permitted to issue compulsory licenses in order to ensure “access to medicines for all” – something that India has attempted to do via the license granted.

It's a shame that the USPTO appears to be so in the tank for big pharma (they get lots of patents, which helps pay USPTO salaries...), that they're willing to mislead Congress on issues like this, even if it means that very sick people around the globe don't get the medicines they need.

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Filed Under: generic drugs, india, nexavar, trips, uspto
Companies: bayer

34 Comments

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kenichi tanaka, 3 Jul 2012 @ 7:47am

I guess the Affordable Care Act didn't really make health care more affordable if one prescription costs $70,000 every year. That's more money than most Americans make in a year and Obama thinks this is a good thing?
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Chuck Norris' Enemy (deceased) (profile), 3 Jul 2012 @ 7:56am

Re:
Government approved health care, government approved foods, government approved entertainment,...see where we're going?
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Anonymous Coward, 3 Jul 2012 @ 7:58am

Saving lives and innovation aren't important. The only thing that's important is big pharma profits. That patents hinder both innovation and cost lives is only secondary.
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Keii (profile), 3 Jul 2012 @ 7:59am

But high prices drive competition, so we must kill competition to promote high prices to promote competition.
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The Groove Tiger (profile), 3 Jul 2012 @ 8:02am

"Rea said the USPTO is working to stem the tide of IP infringement in foreign countries by the use of a host of training programs and educational efforts aimed at foreign officials and judges..."

I'm sure these educational programs include field trips to fancy resorts and expensive restaurants, the reading material is composed of several rectangular pieces of green paper with numbers on them, and will be graded based on the amount of favorable laws and judgements passed by said officials and judges, respectively.
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Jim O (profile), 3 Jul 2012 @ 8:08am

Re:
Are you one of those people that tells global warming jokes on cold winter days?
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kenichi tanaka, 3 Jul 2012 @ 8:09am

Re:
High prices drive bankruptcy. They don';t want more rich people, they want more poor people.
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weneedhelp (profile), 3 Jul 2012 @ 8:17am

They dont want to cure you
They just want to make you well enough to sustain a "quality" of life. Although a dependency on a drug daily IMHO is no quality.

When I first met my wife she had panic attacks. She went to her former doctor and said I have a panic attack maybe once, twice a month. Is there something to help that? Well we already knew that Valium, Xanax, or klonopin worked after receiving them from friends and co-workers. Daily drug after daily drug was prescribed. Some made her batshit crazy, others made her dull and boring. (My wife is a blast, and funny as hell.)

We told the doctor that these drugs were not working and to please stop experimenting on her. Prescribe something that worked from the solutions we found that work. Nope. After some blah blah blah, and hot air, we dropped him and just found "alternative" methods for getting 2mg Valium's.

She has been fine for 10 years now without drugs.

If it were up to doctors they would still have her on daily meds.

All they care about is that you have insurance to bill and prescribing all those new drugs the hottie drug rep was pushing this month.
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Jay (profile), 3 Jul 2012 @ 8:25am

Re:
Best way for health care? Give us what Congress gets. Solve the healthcare problem in two years.
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Jay (profile), 3 Jul 2012 @ 8:30am

Re: They dont want to cure you
I wouldn't blame the doctors too much... Reason being, doctors have perverse incentives in providing care in order to get funding from the government. And it's been this way since Reagan put in new rules that made doctors into factory line workers instead of oath takers.
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zub, 3 Jul 2012 @ 8:30am

Re:
Where is the "sad" button?
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Anonymous Coward, 3 Jul 2012 @ 8:43am

what is worse is that Congress allows itself to be misled, deceived or whatever you want to call it and must only do so because it is beneficial to it. seems to me like a further case of 'i'll chuck a load of money at you, you then give me in return what i want via a law or an agreement with a law so i can make loads a money. doesn't matter that plenty of people will die because of it.' what a fucking attitude! what is it that as soon as someone gets a job with any of these types of organisations, all resemblance of decency goes straight down the pan! the bitch that has come out with this shit deserves to be jailed!
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MrWilson, 3 Jul 2012 @ 9:26am

Re: Re: They dont want to cure you
No! Obama is to blame for all our health care problems! Even pre-existing heath care problems before his term in office! Republicorps told me so!
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Anonymous Coward, 3 Jul 2012 @ 10:02am

No Comment
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TtfnJohn (profile), 3 Jul 2012 @ 10:25am

Really????
NOTE: Quote taken out of context
"placement USPTO overseas IP attaches in Thailand, China, Russia, India, Brazil and Egypt."

I'm sitting here pondering the not so minor detail that between then China and India account for something slightly more than one third of human population on the planet. That and their individual wealth is growing. If they can't afford the patented drug then by all means use the clause to force outfits like Bayer to issue compulsory licenses to generics makers. How long before Bayer takes a large stake out in the generic maker and continues to rake money in?

If the size and growing wealth of those two countries isn't enough to provide big pharma incentive to service them then something is truly rotten in the state of Denmark and it's not just the cheese.

There's a valid argument to be made for patents for new drugs and the research and approval process they need to go through. That argument falls apart the moment the company not only has paid off those costs but is making a profit on the drug in question at the astronomically higher price. (Don't get me started on the renewal process around pharmaceuticals.)

No matter. If a combined market of over 2 billion people doesn't provide incentive to innovate, particularly when disposable income in that market is increasing rather than North America and the EU where disposable income is decreasing, I don't know what is.

Before someone reminds me, cancer treatments are hardly optional so the money spent on them can hardly be called disposable income but I think you get my drift.

What's amusing here is that the USPTO looks like they're going to bat for a German company, which Bayer is, who still sell ASA as Aspirin and do very well by it. More amusing is that India is well within its rights to do what it did. (Anyone interested can look up Bayer's less than stellar role in World War 2.)

We were all sold a useless bill of goods when we were told that tighter medical patents would do things like bring research dollars, lower prices and what not when we, country by country, adopted them. To a large extent we got nothing of the kind. Oh, and lives weren't made better and illnesses often went and go untreated because people can't afford them. You know, say, a cancer.

And since when did it become the job of a quasi-judicial body like the USPTO to lobby for a particular industry or group of industries. They need to spend a bit more time examining patents to make sure they're valid, if you ask me. Which they haven't. ;-)

I don't know if this is a case of putting the cart before the horse but it does seem a case of stepping in what comes out of the south end of a northbound horse.
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Anonymous Coward, 3 Jul 2012 @ 10:37am

Re: Re:
Goverment approved sex positions?
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Anonymous Coward, 3 Jul 2012 @ 10:39am

Re:
Except this one^
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Anonymous Coward, 3 Jul 2012 @ 10:52am

idiots, why give the cheap companies the right to take the research that the "big pharma" spent millions or a billion to create the drug and then let every little no name company produce it and make money, while the big company can never recoup anything???

oh yeah, you don't care about that, why is their incentive to continue to research drug cures, if they will never get the money back??

let the no name drug company research the drug then, and they can charge 3 cents for the pill, oh wait, that wouldn't happen, they don't have the money to do that, and what money they spent they would charge 5 dollars for each pill...only to have some other no name company take their research and make a 3 cent pill.....
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arcan, 3 Jul 2012 @ 11:43am

Re:
you realize out of the new drugs submitted each year only about 5-6 are new drugs. the rest are me too drugs. aka versions of something already out on the market. in addition most drugs recoup costs within a year of going out on the market. r&d costs are only a few 10s of millions now. which is chump change to most corporations of the size you guys talk about.
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Anonymous Coward, 3 Jul 2012 @ 11:46am

Re:
You do realize that YOU (yes YOU) most likely helped fund the research and development that the drug companies are now charging you for access to use. The percentage of R&D that's not government or grant funded is so small as to be irrelevant in the larger discussions.

Figures of millions or billions are irrelevant when the GOVERNMENT GAVE THEM THE MONEY in the first place... at least to those who value their integrity and intellectual honesty.
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Robert Doyle (profile), 3 Jul 2012 @ 11:53am

Re: Re: Re:
Nah, those all result with everyone getting done up the pooper, dry.
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Anonymous Coward, 3 Jul 2012 @ 2:27pm

Given Mr. Baker's demonstrated misunderstanding of US patent law, particularly with respect to 28 USC 1498 and the very, very few statutes that touch upon compulsory licensing in the US, he is hardly one I would look to as an authority on patent law in other countries. His remark about Ms. Rae's professionalism was completely out of line, especially since he criticized her for the very thing he fails to do.
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abc gum, 3 Jul 2012 @ 5:50pm

Re:
"I guess the Affordable Care Act didn't really make health care more affordable if one prescription costs $70,000 every year. That's more money than most Americans make in a year and Obama thinks this is a good thing?"

What does Bayer charging exorbitant prices for their Nexavar product have to do with the ACA and/or Obama?

How long has Bayer been charging ridiculous amounts for their products?

Do you really think that Bayer would be all generous and stuff with their products otherwise?
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Anonymous Coward, 3 Jul 2012 @ 6:49pm

Re:
Wow, darryl. You're not even bothering to leave your name behind these days, are you? So much for the accountability and journalism standards you keep holding us to. Are you still campaigning to be considered as the average Australian, you little shitstain?
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ethorad (profile), 4 Jul 2012 @ 5:25am

Con-gress?
Of course, "thinking" and "Congress" aren't words that often go together

Q: What's the opposite of Progress?
A: Congress
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Anonymous Coward, 4 Jul 2012 @ 9:05am

Re:
I'd go along with your logical-sounding assessment if I didn't have the facts at hand. Only a few minutes of Googling will show you that the companies that make up Big Pharma have never raked in the profits (pure profits, that is: net not gross) than they have in the past 10 years. Their profits are mind-boggling. These corporations have a ton of money to burn, and they're burning it by purchasing politicians and making sure that none of the smaller companies will ever become serious competition for them. This is not healthy for our democracy, for our economy, or for our health.
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Gene Cavanaugh (profile), 4 Jul 2012 @ 12:36pm

USPTO and Big Pharma
Actually it is not just Big Pharma. Congress has directed the USPTO to "make money" (euphemism: revenue vs performance) at any cost, and the USPTO now awards patents (and most IP) strictly on the basis of how much you pay, with no regard to inventions versus anticompetitiveness.
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Anonymous Coward, 4 Jul 2012 @ 5:38pm

Re: Re:
One of my medications tops $850/month. It's a binder to remove certain nutrients from the food I eat. This binder's main ingredient is calcium carbonate, the active ingredient in... Tums.

So tell us, again, about the Affordable Health Care Act?
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abc gum, 4 Jul 2012 @ 7:20pm

Re: Re:
We can't let facts get in the way of blissful ignorance.
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Anonymous Coward, 4 Jul 2012 @ 8:34pm

Re: Re:
Citation?
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Anonymous Coward, 4 Jul 2012 @ 9:06pm

Re: Re:
While numbers bounce around from one study to the next, the percentage of total R&D funded privately is about 75% or so. Obviously, this would leave public funding in the order of about 25%.

It is important to understand, however, that R&D comprises both "basic" and "applied" research, the former generally being to develop knowledge for the sake of knowledge, and the latter to develop products for market entry.

The large majority of public funds are devoted to basic research, whereas the majority of private funds are devoted to applied research.

The point being made is simple (even if how federal funds and private funds are allocated and for what purposes is not). The private sector bears the lion's share of the financial burden, and it is incorrect to suggest otherwise.
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Tex Arcana (profile), 8 Jul 2012 @ 8:30pm

Re:
Haven't you realized yet that Obama is a republican in drag?? And he handed all of Amurrrikin health care straight into the hands of the insurance industry??

Yeah, talk about putting the fox in charge of the henhouse... Watch for the foxes to break out the automatic weapons and skinning knives...
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patent litigation, 9 Jul 2012 @ 5:37pm

special interests
The U.S. government is owned and controlled by large corporations and similar special interests whose profit margins and other priorities could conceivably be dented by the existence of compulsory patent licenses and similar initiatives that benefit the general public. For this reason, U.S. legislative and executive branch statements and agendas should largely be ignored.
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