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Wednesday, 25 January 2012

Should the duration of pharmaceutical patents be extended?

Some Kats never grow up.
Merpel will do anything for
the strawberry flavoured one ...
This Kat was intrigued about a debate this week in the Wall Street Journal concerning the duration of protection for pharmaceutical patents: "Should Patents on Pharmaceuticals Be Extended to Encourage Innovation?" At its simplest, the WSJ explained the issue as follows:
'The drug makers say those profits fund the research that produces breakthrough treatments. They warn that with patents expiring on several big-money drugs, their ability to develop new drugs will be severely hampered. Longer-lasting patents, they say, would protect the profits that they need to keep innovative products moving through the pipeline.

Critics question that assumption. There's no proof, they say, of a link between patent life and innovation. In their view, drug companies focus on developing the most marketable drugs instead of the most urgently needed medications. So extending patents would serve mainly to boost drug companies' profits, not to encourage the innovation needed to address the world's unmet medical needs'.
For pharmaceutical patent extension


Writing in favour of an increase in patent protection was Dr Josh Bloom (right), director of Chemical and Pharmaceutical Sciences athet American Council on Science. He describes the 'problem' as follows:
'A confluence of events in recent years has made drug discovery more difficult, expensive and time consuming. Most important, it has become less profitable, largely because longer development times mean companies have less time left under patents to exclusively market their discoveries. Now, the industry faces a financial crisis because of the recent or imminent expiration of the patents on many of its most profitable drugs'.
In the course of his argument, Dr Bloom provides some striking statistics (or 'Ugly Numbers' as he calls them). For instance, bringing one new drug to market takes roughly 14 years and at a cost of roughly US $1.3 billion (£835 million or so). For every medicine which makes it on to the market, more than 50 research programmes fail. Further, owing to increased development times, pharmaceutical companies usually only have 11 years of market exclusivity for their medicines. Dr Bloom concedes that 'of course longer patents would mean that important drugs would remain relatively expensive for a longer time'. However, this is quickly followed by the (expected) ominous warning: 'but the expense of new drugs is preferable to not having them at all'.  Taking a compromise positoin, Dr Bloom concludes:
'... a well-planned extension of patent protection, especially for innovative drugs [as opposed to the 'so-called line extensions-where companies simply tweak existing patents enough to earn a new patent'] is both reasonable and necessary to keep what is left of the American pharmaceutical industry healthy enough to continue its crucial work'.
Against pharmaceutical patent extension


Writing against an increase in patent protection was Dr Els Torreele (right), director of the Access to Essential Medicines Initiative of the Open Society Foundation's Public Health Program. For Dr Torreele, the 'problem' is that:

'... drug companies are more focused on developing the drugs with the greatest market potential than they are on developing truly innovative treatments that address critical health needs. And the patent system encourages that approach. The previously stringent criteria ensuring that patents applied only to real innovations have gradually been eased. Nowadays, companies can secure a 20-year monopoly by either making minor changes to an existing drug or inventing a totally new drug—so why take the risk of failure associated with the latter?'

In response to the suggestion that the patent system could be modified so that 'innovative drugs' received longer protection, Dr Torreele stated that this:
'perpetuates the fallacy of a link between patents and therapeutic innovation—and that distracts us from thinking about alternative policy tools to promote real health innovation. It's perfectly possible to achieve a major medical breakthrough with a product that isn't patented, while the fact of obtaining a patent doesn't say anything about a compound's actual medical value. Moreover, the patent office [ie the United States Patent and Trademark Office] isn't equipped to judge therapeutic benefit'.
Instead, Dr Torreele proposes a more stringent approach so that new medicines had to demonstrate 'a therapeutic benefit over existing treatments before giving market approval—a judgment the agency [the Food and Drug Administration in the United States] is perfectly capable of making, but somehow doesn't now'. She continues with the (expected) ominous warning that 'without such a prerequisite, companies will continue to focus on pharmaceuticals with the highest market potential, rather than innovating to address medical need'.

As an alternative to patent extension, Dr Torreele believes that the answer is:
'institut[ing] a regulatory environment that prioritizes health innovation instead of market opportunities, by making approval of new drugs contingent on therapeutic advances that address unmet health needs. In parallel, we should mobilize public and private resources to finance research and development independently of patents, so that we can stop relying on pharmaceutical sales as the primary source of funding for research'.
You've heard both sides -- so the IPKat and Merpel throw the topic open for discussion: should the duration of pharmaceutical patents be long or short, and should they be driven by patent protection or pushed by funding in a regulatory environment?  Do tell us!

18 comments:

Anonymous said...

I am as opposed to longer terms for pharmaceutical patents as to the often-proposed shorter terms for IT patents, and namely for the same reason: at the end of the day there's a strong risk that whether longer or shorter terms apply for a given industry would ultimately be decided by the lobbying power of that industry.

The current European SPCs are, in my opinion, a disgrace, and don't even get me started on pediatric SPCs. The pharmaceutical industry is not the only industry which needs a long time for development and certification, yet nobody seriously proposes a similar term extension for, say, aviation patents.

A one-size-fits-all 20 year patent term may be a blunt instrument, but at least prevents the unseemly show of lobbyists courting lawmakers in search of a longer term.

Anonymous said...

Dr Torreele has unfortunately failed to answer the question of how to promote research into new medicines so the case of Dr Bloom must be victorious.

Anon at 6:33 is playing the "It's not fair that pharma get more than us" argument. Unless we are now in primary school, this argument must also fail.

I would be interested for anon to get started on pediatric extensions, even SPCs themselves. Does anon understand the reasons behind either of these extensions?

As for the main proposition itself, we need to accept that there is a real problem with creating new drugs. Pharma research is on the decline, investment is falling and research sites are closing. There has been a failure to replace the blockbusters going off patent thise decade and in part that is due to increased regulatory burdens. I'm not convinced that the industry is merely a victim in all of this and must therefore shoulder their share of the blame for failure. Mega-mergers of the past and a lack of freedom for creativity and high quality research are major reasons to current problems. Only now are GSK and others trying to diversify the research pool and realise that small, fast moving research teams are more likely to innovate than the old Goliaths.

Having said all that, the public need new medicines and we must make use of the Goliaths (or whatever they become) to do that job for us, even when they are not as efficient and successful as we'd like them to be. A monopoly period is required for a return on investment that will encourage investment in the research. How long that period is should now be carefully considered.

The monopoly doesn't have to be patent specific however, so other forms of exclusivity (data, market) could be considered. These exclusivity periods do not kick in until products are launched so patent protection to cover the research and development stages are still essential.

And, if the monopoly isn't of the patent term, there will be less complaining from the aviation industry that pollutes the planet, takes huge government subsidies and doesn't pay duty on its fuel. Equality is a funny thing!

Anonymous said...

And I thought that patents should only be granted on drugs that are "innovative". Silly me.

Petros said...

Anonymous' objections to SPCs and paediatric extensions in Europe while ignoring the fact that the same practices, under different names, also occur in the US seems irrational.

The whole point of such corrections is to compensate for the period of patent protection lost due to long development and approval times.

Anonymous said...

Am I alone in thinking that there should be a possibility for extending the life of telecom patents in the same way that SPCs are available for pharma? The development of the next generation of mobile phones (LTE) started in 2004 but due to regulatory issues, it is unlikely that networks in the UK will be operational until 2014, giving the technology developers only a very limited period to recoup their substantial investment. Such delays are a feature of regulated systems and as such their should be a common application of the principles behind SPCs to other regualted technologies.

Paul Cole said...

The whole subject of patent lifetime needs consideration as, on the whole, the period of protection is grotesquely inadequate.

In 1945 Franklin Delano Rosevelt, President of the US and arguably one of the greatest benefactors of mankind who ever lived and the most powerful individual on the planet, died of a stroke following a period of ill-health brought about by high blood pressure. Nothing could be done for him with the drugs then available. A simple course of tablets which have been available for decades would have prevented that, enabled him to complete his presidential term and to have survived into old age.

Most of us owe our lives to the products of the pharmaceutical industry and in that context the period of patent protection is grotesquely inadequate.

In my suggestion a 50 year term would be more appropriate. If there is a life plus 75 year term for authors and musicians who merely amuse us, how can we justify greatly lesser protection to those who save or transform our lives?

It goes without saying that if the industry had a much longer period of protection with which to recover its R&D costs, the differential between the cost of patented and generic drugs could be reduced and greater stability would be given to the researching companies and other institutions.

It may be that the patent life should be extended by two periods: one of true exclusivity and a second where the patentee could not refuse a license on reasonable terms. But the present compromise with SPCs and a still too short patent life benefits neither the industry nor in the ling term the public.

First Anonymous said...

Anon at 6:33 is playing the "It's not fair that pharma get more than us" argument. Unless we are now in primary school, this argument must also fail.

Quite frankly, you must have misunderstood my point: if the pharmaceutical industry requests special treatment, then the onus lies on it to demonstrate that it deserves such special treatment. However, I haven't seen any argument in the defence of term extensions for pharmaceuticals that doesn't apply to other heavily regulated industries as well (such as my example, aviation, or that of Anonymous@8:49, telecoms).

As for the main proposition itself, we need to accept that there is a real problem with creating new drugs. Pharma research is on the decline, investment is falling and research sites are closing.

It is a very dangerous point that you are making, and one which may easily backfire, because this alleged decline is in spite of the fact that medicines have never been as strongly protected by patents as now, with many developed countries introducing term extensions and many emerging economies abandoning their previous reserves against patents on pharmaceutical products. In this context, some may argue that if despite all these measures pharmaceutical innovation is in the decline, the last thing we need is to pursue the same path even further.

Anonymous' objections to SPCs and paediatric extensions in Europe while ignoring the fact that the same practices, under different names, also occur in the US seems irrational.

I mentioned the situation in Europe because it is the situation with which I am most familiar, not because I intended to compare it with the US or elsewhere.

The whole point of such corrections is to compensate for the period of patent protection lost due to long development and approval times.

And, as I pointed out, other industries can also claim long development and approval times. (Also, this justification hardly applies for pediatric SPCs.)

In my suggestion a 50 year term would be more appropriate. If there is a life plus 75 year term for authors and musicians who merely amuse us, how can we justify greatly lesser protection to those who save or transform our lives?

Well, I am not fundamentally against reconsidering patent terms across the board, but as I said, specific arrangements for specific industries ultimately only profit their lobbying firms.

This said, I am afraid that the current public mood regarding IP is very certainly not such that it would countenance 50 year patent terms.

We in the patent world should acknowledge public opinion, because, at the end of the day, we exist at the public's discretion. While Dr. Torreele fails to make a valid proposal on how to finance pharmaceutical research and development in the absence of patents, we should also recognise that there is a public concern on how patent protection can limit access to vital medicines.

Anonymous said...

Perhaps it is time to explore alternative mechanisms for motivating/compensating innovators.

It is morally repugnant to use artificially created scarcity to maintain high prices, on life-saving products, for this purpose.

Utilitarian arguments that the benefits of patent monopolies outweigh the harm cannot hold sway while alternative inventor compensation mechanisms remain unexplored.

Anonymous said...

Anon at 10:05:00 -

I have little knowledge of regulation in non-pharma industries, but I am not aware that a telecom company or an aviation firm is prevented from launching any and all of its products or product improvements without submitting those products for regulatory approval, which itself will take several years and frequently results in approval being declined.

Secondly, excluding state-granted exclusivity, the barrier to entry for the generic industry is insignificant. In the aviation industry I suspect it is almost impossible to enter the market and compete with Boeing and Airbus. In the telecoms industry the cost of licences such as 3G is also an insurmountable barrier.

Then we must consider whether the public would be well served by any particular industry should exclusivity be reduced, extended or maintained as is. The pharmaceutical industry would not have been so productive over recent decades had patent protection not existed. Exclusivity is essential for pharmaceuticals. Many other industries would continue quite happily without patent exclusivity, though it is still a huge benefit to them an the public that it exists.

For SPC and US PTE's, the extensions are not only to compensate for regulatory-incurred delays to marketing, but there is also the quid pro quo for generic companies to conduct the 'commercial' activities required for product launch prior to expiry of a patent/SPC. Again, I am not aware that Boeing would be allowed to build an aircraft that infringed the IP of Airbus to be stored and sold the day the Airbus patents expire.

It is in the public interest that pediatric studies are conducted for both new and existing drugs, but due to the nature of such trials, the potential downside and possibly limited upside, such studies have only rarely been conducted. The 6-month pediatric extensions have solved this problem.

Non-20-year-patent forms of exclusivity have not only benefited the pharmaceutical companies, but they have directly encouraged research investment into diseases previously deemed unworthy. Orphan drug exclusivity provisions have had a major impact - there is an official report somewhere that Google will find, but it is a while since I saw it.

As for Dr Torreele, my commetns above regarding her failure to provide a solution still apply. In addition, she would do well to look at such reports and realise that the only way to encourage investment in and drug research is to guarantee exclusivity to enable a return on investment. The public sector is not experienced in pharma R&D and cannot take up the slack or cover these un-profitable areas, either at the same expense incurred by private pharma or on the cheap.

The attacks on the pharma industry from such people is not helping a single person receive life-saving treatment.

"In this context, some may argue that if despite all these measures pharmaceutical innovation is in the decline, the last thing we need is to pursue the same path even further."

That is a very dangerous position to take. When a patient suffers a downturn in their condition, that does not normally, I hope, result in no further treatment with the patient being allowed to die.

We should, of course, always acknowledge public opinion, however ignorant it is. I know someone who told me recently that they believed the old conspiracy theory that patents were tools for keeping advances secret and that the cure for cancer exists but it is being kept hidden.

Anonymous said...

Anon at 12:46 needs to give us their solution. "There must be a better way" arguments are rarely helpful and I place them in the same category as those dismissed above.

"It is morally repugnant to use artificially created scarcity to maintain high prices, on life-saving products, for this purpose. "

Getting simple facts wrong is never helpful either. Their is no artificially created scarcity. Pharma companies will happily produce as much of a drug as you want providing you pay for it. Problem is, you are one of those people that doesn't like to pay for things.

Millions of children's lives could be saved every year if every selfless individual (in the UK even) who finds the pharma industry morally repugnant, put their hands in their pocket and gave £1 to provide vaccines and clean water. Children die from diarrhea which costs pennies to treat.

Wear a helmet when you sit on such a high moral horse!

Anonymous said...

Anon at 8:45 - The fact that the UK doesn't have LTE yet is not due to regulatory issues as such. Well, it's certainly not due to the regulator itself. The fault lies with the mobile operators, who spent years threatening the regulator with legal action in attempts to have the regulator's policy set in favour of one or other operator.

First Anonymous said...

When a patient suffers a downturn in their condition, that does not normally, I hope, result in no further treatment with the patient being allowed to die.

On the other hand, I don't think that, if a condition keeps worsening with a given treatment, medical staff would normally persevere with ever higher doses of the same medicine without considering alternative diagnoses and treatments. Although, admittedly, my only support for that opinion comes from watching "House".

Pharma companies will happily produce as much of a drug as you want providing you pay for it. Problem is, you are one of those people that doesn't like to pay for things.

This is not a case of people wanting to download the latest episode of their favourite reality show for free. In my experience, most people are quite ready to part with their money when their lives, or those of their family, are at stake.

However, when organisations like Doctors Without Borders decry patents' impact on access to medicines, we could do better than to just haughtily dismiss their criticism as self-interested or ill-informed.

I do agree with you that the exclusivity provided by the patent system is normally the most effective incentive for innovation. But we should acknowledge that it is not perfect, that in some cases it may provide a bigger incentive for investing in developing, say, potency drugs than better treatments against poor-country diseases, and that in other cases it may price a medicine out of the reach of a vast number of potential patients.

If we genuinely want to defend the patent system, we should listen to such bona fide critics and work together with them to correct and/or alleviate such problems.

Dr Michael Factor said...

In my experience those practitioners that are for or against patent term extensions usually represent the drug development and generic industries respectively.

Israel's Teva, the world's leading generic player, is also a drug developer, with Copaxone and Seasonique developed using revenues from generic sales.

The idea that increased patent term furthers development is one of those sweeping statements that are not demonstrated empirically.

It is in the same category as "Copyright promotes creativity" or "first-to-file favors the corporations over the small-timers."

The underlying flawed logic is a little like stating that since Einstein was a patent examiner, all examiners are Einsteins.

Anonymous said...

Michael, I'm afraid it is your analogies that are flawed. The Teva example teaches us nothing. Unless of course Teva did not make use of the patent system to protect their investment in Copaxone?

When the answer to that question is no, then I'll buy into your argument. Labelling practitioners based on their viewpoint and accusing them of self-interest is also a meaningless position. Should all laws be decided without input form anyone having some form of input.

Some of us, oddly enough, are also able to consider both sides of an argument and not just consider how it will affect our own self-interests. Maybe you are different.

Anonymous said...

"without considering alternative diagnoses and treatments."

That's fine, please consider and advise on the alternatives, but don't start looking at 'alternative therapies' or you will get a dead patient.

"However, when organisations like Doctors Without Borders..."

I bought more into your quote from "House" to be honest. Such organisations can only see that a generic company in India will sell them a treatment at a discount to the innovative pharma. They cannot see beyond the end price and have no interest in the cost of R&D. They see a world where without patents they could treat the sick of the world. They fail to appreciate that those medicines would never have existed without the patents to protect the investment. I am happy to go with an argument that says ban patents today, treat the sick more cheaply and forget about the development of new treatments. That would at least be an argument that accepted we cannot have our cake and eat it.

Aside from the argument I made above about non-patented treatments being cheap that could save the majority of lives of sick children, there is also the inescapable argument that even if drugs were sold at cost (i.e. AIDS drugs) those in Africa in need would not get them. This is because the patent and cost argument is there to distract from the truth - Poor countries in Africa in need of AIDs drugs spend their money elsewhere and have no interest in looking after their own sick people. In addition there is the education requirement, accpetance of use of protection during sex, and even the acceptance that AIDs exists.


My background is pharma research and latterly patents so I have self-interest, but I have an informed position and an understanding of the reality that unless their is protection for investment, no investment will be made. There are clearly alternative mechanisms that could be tried, but there is nothing to preent them from being instigated in addition to the current pharma/patent model. Questions must be asked as to why they are not instigated and the reasons for them.

Pharma industry is always under attack even though they develop drugs that save lives. Not many industries can say the same. Doctors tend to get paid very heavily for their services (after their gap year caring for the poor in Africa for free) and we could treat a lot more people if we slashed doctors salaries, but I don't see MSF callng for that.

One problem with the current pharma model is the focus on diseases that only affect larege numbers of people in rich nations. Nothing wrong with that but attnetion needs to be paid to diseases of the poor. Where are all the do-gooders investing their money for no return? Aside from Bill Gates. There are plenty of highly qualified researchers in this country looking for gainful employment.

Almost Emeritus said...

Prior to the UK's 1977 Patents Act, there was statutory provision for the patentee applying to the court for an extension of term on the ground of inadequate remuneration. Section 23(1) of the Patents Act 1949 specified an extension of "not exceding five years, or, in an exceptional case, ten years", and an application for extension could be requested even after the patent had expired. This was distinct from extension to allow for war loss [covered by Section 24].

Anonymous said...

Definitely not. Having seen the pharma industry from the inside, I know they're a bunch of greedy gits who primarily seek to maximise their profits - doing something worthwhile for mankind definitely takes second place. They seek profit, hence lifestyle drugs will always trump cures for tropical diseases, the latter being found by accident in the search for something else. Yes, I know the strike rate is low and the regulatory burden enormous and that the companies would go out of business if they couldn't rob people blind. Perhaps the discovery of new drugs is too important to be left in the hands of the drug companies. Given that drug discovery is pure serendipity anyway, an international organisation would do just as well.

Anonymous said...

Anon at 12:49.

Please advise where in any law of any country are individuals, firms, universities, governments, NGOs, charities and people like yourself, forbidden for funding or conducting pharmaceutical research for the good of mankind?

If there are no such rules then your feelings regarding the motivation and attitudes of the current pharma industry may well be justified, but they are still doing more than all of their critics combined.

Isn't it amazing how everyone is so anti-pharma and pharma patents yet no-one can give a decent argument to support their position!

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