UK Government Review Says Use Prizes, Not Patents, To Produce Much-Needed New Antibiotics

from the or-it-will-cost-us-$100-trillion dept

Fri, May 15th 2015 1:05am — Glyn Moody

A couple of years ago we wrote about how the patent system creates perverse incentives for companies that make antibiotics to exploit them as fully as possible while they are still under patent. That, in its turn, drives antibiotic resistance, which is becoming an extremely serious problem. At the end of our previous post, we noted that this situation would be a perfect opportunity to try something different, such as offering some form of prize to pharmaceutical companies that come up with new antibiotics. Remarkably, the UK government's Review on Antimicrobial Resistance (pdf) has just suggested exactly that:

we want to make antibiotics R&D commercially sustainable so that the field can attract the best minds from research organisations, small biotech companies, large firms or not-for-profit entities. To do that we propose a system by which a global organisation has the authority and resources to commit lump-sum payments to successful drug developers. Payment would have to be set against selective criteria agreed in advance. Such an approach would 'de-link' the profitability of a drug from its volume of sales, supporting conservation goals by eliminating the commercial imperative for a drug company to sell new antibiotics in large quantities -- a key factor in contributing to the development and spread of resistance.

As that notes, the key to this approach is to "de-link" profitability from sales volume so there is no business pressure to over-use new antibiotics. One way to do that is to offer not a patent, but a hefty lump sum to any company that comes up with a new antibiotic. Another benefit is that the scale of the money on offer -- around $2 billion per new antibiotic -- is likely to encourage participation from companies all around the world, especially startups, since the scheme would be open to all. The UK review suggests supporting innovative approaches directly: A global AMR [antimicrobial resistance] Innovation Fund of around 2 billion USD over 5 years would help boost funding for blue-sky research into drugs and diagnostics, and get more good ideas off the ground. Big pharma should have a role in paying for this innovation fund: it needs to look beyond short-term assessments of profit and loss, and act with ‘enlightened self-interest’ in tackling AMR, recognising that it has a long term commercial imperative to having effective antibiotics, as well as a moral one.
The 44-page document goes into more detail about the thinking behind the proposed scheme, how it might be implemented in practice, and the problems it would face. It's a bold approach, but given the continuing failure of the current patent-based system to come up with new antibiotics, it's one that governments around the world need to consider seriously. After all, as the review warns: if we fail to act on AMR, then an additional 10 million lives would be lost each year to drug-resistant strains of malaria, HIV, TB, and certain bacterial infections by 2050, at a cost to the world economy of 100 trillion USD.
Compared to that figure, the few tens of billions of dollars needed to implement the new approach has to be a bargain.

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Filed Under: antibiotics, competition, drugs, health, patents, pharmaceuticals, prizes, profits, safety, uk

8 Comments

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Richard (profile), 15 May 2015 @ 3:14am

Interesting
This is essentaily the same idea as was used (somewhat after the fact) in WW1 and WW2. It was called the Royal Commission on Awards to Inventors.

The disregard of the patent system during the wars was one reason for the rapid innovation that happened at the time.
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cypherspace (profile), 15 May 2015 @ 3:51am

A prize-based system would also completely short out patent trolls.
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Anonymous Anonymous Coward, 15 May 2015 @ 6:08am

Global Patent Assignment
Unless the patents globally from winners are assigned to some entity (a very powerful entity) that is not allowed to exercise them (or whatever the correct language is here), some pharma company will collect the prize and patent it everywhere but the UK. In the US, they will come up with something that looks like anything that comes out of this and patent that, then sue because it 'looks' like our patented product, even though they are one molecule different. Even if they don't win, that cost will eat up any awards very quickly.

Pessimistic? No, practical, look at the past behaviors.
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Anonymous Coward, 15 May 2015 @ 7:01am

Past the point of no return
It would be a great idea. Unfortunately we are far past the point of no return in regards to patents, and the whole concept of "IP" in general. It has spread around the world, like a disease, and curing it in one part of the world will have no effect on the rest of the world.
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James Burkhardt (profile), 15 May 2015 @ 8:28am

Re: Global Patent Assignment
Assumes the patent would be issued at all. I would require either no patent to be filed or assigning the patent to the government.

Also assumes that the prize stipulation does not preclude patenting in other jurisdictions.

Also assumes the prize award does not preclude that company suing over generics of the drug.

If you are actually talking about a second entity doing the patenting in the US:

Also assumes the patent office won't recognize the prior art (the drug being used in the UK), which we would assume this UK pharmaceutical company will be looking to submit.

Also assumes that the patent office's rejection of that prior art wont be seen as conclusive fact that the drug does not infringe, allowing dismissal or summary judgement.

There are likely other pitfalls to your line of logic as well.

They are good things to think about. But I doubt they are as hard to overcome as you claim.
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Anonymous Anonymous Coward, 15 May 2015 @ 9:00am

Re: Re: Global Patent Assignment
Seems we agree, though I thought I expressed worry rather than claim. We have seen several of those assumptions already take place, like:

https://www.techdirt.com/articles/20130510/10164723033/merck-evergreens-off-patent-lipitor-crea ting-combination-drug-with-no-additional-benefit.shtml

There are others as well. Our patent office does not do so well in recognizing prior art, there was even an article here a while ago that talked about how they are not allowed to use search engines to look for prior art.

I do think this is a good idea, but if they are not careful, and look for and close loopholes, it will not give us the results one would hope for.
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James Burkhardt (profile), 15 May 2015 @ 9:50am

Re: Re: Re: Global Patent Assignment
Very true.
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Pragmatic, 18 May 2015 @ 6:22am

Re: Past the point of no return
That's because we've outsourced production and rely instead on rent-seeking for revenue. That's the problem. When we've stopped that, you'll see a lot less trolling.
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