From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Sunday, 11 January 2015

The ethics of biotech patenting: a dialogue about monopolies, human dignity and the cost of medicines

Further to last week’s introductory Katpost on biotech, this post will discuss the impact of ethics on the ‘patentability’ of biotech inventions and the ‘enforcement’ of biotech patents. At the onset this Kat would like to say that he believes patents are necessary in our current free-market system to bring investment to research that needs to be funded, and does not see any real alternatives. This Kat also believes that a key question to ask when looking at any given ethical problem in biotech patenting is whether the solution requires a change to the patent system or lies elsewhere. It must be borne in mind that reducing patent rights is not the only mechanism available to deal with the issues discussed below.

Fundamental principles

Where do ethics come from?
The ethics of biotech patenting can be looked at using the concept of ‘human dignity’, the theory of the ‘commons’ and the effect of patent monopolies on the cost of medicines.
‘Human dignity’ is an accepted concept and is defined in Article 1 of the The Charter of Fundamental Rights of the European Union as inviolable. It requires recognition of the intrinsic value of human beings and that they are not to be commercialised. In practice this concept has only come into play when assessing the patentability of inventions relating to human embryos.

The theory of the commons is about what we all share and is used to help define the limits of what can be the subject of private ownership. Nature clearly belongs to everyone, though it is not straightforward to see how that should impact patent rights. It could also be argued that our genetic material, and in fact the genetic material of any naturally occurring organism, is part of the commons (see Katpost here about the Nagoya Protocol and ownership of genetic resources). Such considerations do not directly impact on patentability in Europe, but they do in the US as mentioned below.

Patent monopolies are part of the reason why medicines are increasingly expensive in the developed world and are unaffordable for many in the developing world. This raises the issue of the extent to which national patent laws should take into account public health matters.

It is not the purpose of this article to consider the general moral principles that apply to all patents, as only issues related to biotech will be discussed. However those principles consider the balance between giving a monopoly right and society as a whole deriving consequent benefits. Clearly the benefits derived from biotech patents need to be borne in mind when discussing ethical issues.

How ethics influences the patent rights that are granted

In Europe the patentability of biotech inventions on moral grounds is substantially determined by the EU Biotech Directive which was adopted in 1998. The Directive only lists four specific types of invention as being unpatentable on moral grounds:
(a) processes for cloning human beings;
(b) processes for modifying the germ line genetic identity of human beings;
(c) uses of human embryos for industrial or commercial purposes;
(d) processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal, and also animals resulting from such processes.
It also confirms that elements of the human body, such as genes, can be patentable when isolated from the human body.

The Directive basically settled a lot of the ethical debates about patentability of biotech inventions in Europe. Complicated issues such ‘human dignity’ and the ‘commons’ have not really had much impact since, probably to the relief of the biotech industry.

The patentability of human embryo stem cells was referred to the Court of Justice of the European Union (CJEU) in Brüstle (see Katposts here and here). The decision essentially took a strict view and held that inventions concerning embryo stem cells where unpatentable if an embryo had been destroyed at any stage, including prior to the steps referred to in the claim.

This Kat believes that in Europe the extent to which ethics influences ‘patentability’ has now been mostly defined. providing certainty for the biotech industry.

Do we need to redefine the commons for biotech?

Thickets are not always
a bad thing
The nature of biotech inventions means that often there are overlapping patent rights for any given technology. The ‘tragedy of the anticommons is a term that is used to describe this situation where it is believed that patent thickets inhibit biomedical research and prevent medical products reaching the marketplace. However it is unclear to this Kat to what extent this is a real problem for the biotech industry, and if it is, what the solution would be. It must also be remembered that there are research exemptions which provide some assistance to the problem of patent thickets (see Katpost here about the exemption for clinical trials).

Having said that, in the US it seems that the ‘commons’ for biotech has been substantially enlarged by the Mayo and Myriad decisions (see Katpost here). The US biotech industry has mostly reacted with dismay to this, and so they do not seem to perceive advantages in increasing the size of the commons.

Patents and the price of drugs

Medicines are becoming ever more expensive (see Katpost here on the economics of IP in the pharmaceutical industry). In the US the cost of the newly released drug Sovaldi has caused much debate on the issue. Sovaldi is used to treat hepatitis C and will cost $94,500 for a 12-week treatment. In the UK the National Institute for Health and Care Excellence (NICE) has been assessing the benefits of new drugs to determine whether they are worth the cost. That assessment can lead to negotiations with drug companies about prices. Generally the cost of drugs in the developed world has not led to calls to reform the patent system.

Being ill is never fun
However in the developing world the situation is more severe (see Katpost here about the ‘access to medicines’ debate). Patents lead to medicines being unaffordable for many people and so part of a major public health issue. This has led to calls for patent rights to be restricted in way that allows cheaper generic medicines to be made available as quickly as possible.

Should developing countries limit patent rights for medicines?

Presently the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) requires countries to provide patents rights for medicines. As noted in a Declaration by the Max Planck Institute, TRIPS does provide some flexibility in the scope of patent rights that are granted, but developing countries have not taken advantage of these to make it more difficult to obtain patent protection for medicines. Certain countries have limited the protection available for subsequent new uses of a known drug, such as India, countries in the Andean region and the members of the Gulf Cooperation Council.

Some countries have taken steps to stop evergreening. This is where subsequent to an initial patent filing on a drug further patent applications are filed to specific formulations of the drug. It has been argued this is a way to extend the monopoly on the drug beyond the term of the first patent. India has tackled this by making the patentability requirement higher for known drugs, requiring them to have an enhancement of the known efficacy.

Without taking sides, this Kat wonders whether the ‘access to medicines’ problem is best solved by cutting back on patent rights. In the developed world governments have instead chosen to negotiate prices with drug makers. This would seem a preferable solution for the developing world also, and would mean that the development of domestic biotech industries would not be hindered by weaker patent protection being available.

37 comments:

Manach said...

To paraphrase Napoleon, God/Ethics is on the side of the biggest battalions of lawyers and lobbyists.

Anonymous said...

Does the Kat have an opinion on the effect of prices caused by artificial (potential or actual) caps in selected countries?

For example, here is the US it is widely known that the significantly higher prices we pay are due in part because the multinationals subsidize the developing market with artificially low prices.

This causes a certain amount of illicit reentry pharma flow, but there is a more cold-blooded, but perhaps equitable consideration. Why should I pay more for someone else to have the drug as well? Nothing against any other ill person, this question is more geared to the allowance of the business model in which transnational elitists (Big Pharma) can charge disparate prices across geopolitical zones. Is there not a larger equitable/moral calculation has to what is a "fair" profit? Should I have to (have to mind you without the conscience choice of benevolence) essentially pay for someone else?

Anonymous said...

I am pleased, for once, that someone has beaten me to one of my arguments in the access to medicines debate.

Why should citizens of wealthy nations, many of whom are poor, be denied access to medicines, because they cannot afford to subsidise the cost for those (including the wealthy) of other countries?

Nations signed up to TRIPs because they believed it is was in their interest.

Without patent rights there would be no new drugs. Some things in life really are that simple.

Nations such as India send billions of dollars on nuclear weapons rather than on the health of their own citizens. They should go sort themselves out.

Expensive drugs treat the diseases that are the least of the health problems in poor countries. If NICE operated in these places, they would find better ways to spend the $94500 rather than a single course of Hep C treatment.

Even without patent rights, many drugs are extremely expensive to produce.

Sorry to burst a lot of bubbles, but the generic industry operate to make profits so their owners can buy big houses and Ferraris. They do not operate in the interests of the poor. However, the biggest pharma companies give away a lot of life-saving medicines for free.

Finally, for anyone who thinks the evil pharma companies should do more for the poor, I suggest they abandon their modern lifestyle, and rather than upgrade that car, buy the latest iPad and smartphone, they should send their money to a charity to help the sick instead. Otherwise they are simply hypocrites.

Suleman Ali said...

In response to anon of 1:02 the point you make is important, but in my opinion there are also other points to consider when looking at how to resolve things. US buyers of medicines have a part to play in determination of the price. I think this article raises interesting issues:http://www.forbes.com/sites/matthewherper/2014/10/05/60-minutes-just-attacked-high-drug-prices-heres-what-you-should-know/. I think the debate that is happening in the US is important because it's a place that recognises patent rights and also the free market. A big question there will be 'are patients, insurance companies, etc, being overcharged for drugs and what solutions are available?'. I think it's complicated. Pharma companies must be allowed to make profits, but people must not be taken advantage of. In terms of lower prices being charged elsewhere I think perhaps the solution is individual agreements with countries about pricing. The pharma company gets exclusivity, access to the market, etc, in return for negotiating the price with the company.

In response to anon of 9:03, I agree with much of what you say. The governments of developing countries are not angels. But we all live on the same planet so we need to look for the best ways to sort things out. Generics companies are not angels. And also innovator pharma companies are not angels, but they are developing the drugs, and no one else is in position to do so. That must be acknowledged. I think the developed world needs to provide a path for developing countries to become places where IP rights are respected. If medicines remain unaffordable then a developing country is going to see the erosion of patent rights as in its national interests, and that I think is a step in the wrong direction. I do also think there is a moral dimension to this. The lives of millions can be saved by providing cheaper medicines which have already been developed. Do we simply let them die, just as some of their own governments seem to have decided to do?

Anonymous said...

I disagree with the statement:

"no one else is in position to do so"

Anyone can fund this research: government, charities. Some charities do. Some governments fund basic research that pharma relies on.

Drug discovery works well in the private sector because the risks of failure are high so it relies on people willing to take risks with significant sums. The rewards aren't excessive if you look at the ROI of big pharma. Unfortunately, the returns have become uneconomic as the risks increased and successes diminished, and huge cutbacks have been made as a result.

Do we let them die? By "we", if you mean society, then no. Pharma have done their bit by developing the drugs and society shouldn't let them die either.

If we go back 25 years when this argument also raged, if we had stopped allowing patents on new drugs, we wouldn't have any of the latest drugs currently being fought over. We wouldn't have let all those people die in the past (assuming the drugs were free to produce and distribute, because society doesn't believe in aying for it) but we wouldn't have the chance to save lives today.

If a developing country sees erosion of patent rights in its national interests, then TRIPs should be enforced to prove otherwise. It isn't easy for a 'developing nation', even India to manufacture and sell copies of drugs when that nation has been bankrupted by sanctions.

Anonymous said...

Have a look at this to see tactics used to keep drug prices high: https://www.techdirt.com/articles/20141225/06374929525/nasty-patent-games-drug-companies-play-to-stop-you-getting-cheaper-drugs.shtml

Suleman Ali said...

In response to anon of 11:38 I was thinking of how difficult it is to carry out clinical trials properly and get the evidence together for getting regulatory approval. Pharma companies are good at that, and as far I know, no one else is. Clearly anyone can 'fund' medical research.

I think TRIPS enforcement and sanctions should always be seen as a 'last resort' option. I think we need to develop solutions based on cooperation rather than coercion.

Anonymous said...

I agree that pharma are best placed, subject to funding. I would say my suggestion to enforce TRIPs is in response to a threat of coercion to limit patent rights. Leave the patent rights alone and sort out the problem of access to medicines another way.

to anon at 12:00 Why would/should anyone go o a website called techdirt to read an article that will be biased garbage? If you have an opinion simply share it, ideally with some support.

Suleman Ali said...

In response to anon of 12:50, at this time my personal opinion is also that reducing patent rights is not the best way forward. I would say that having a patent right in place is an acknowledgment of work done by a pharma company. After that the relevant government needs to engage with the pharma company about how they are going to work together to get the drug to as many people as possible. I think in the UK NICE is doing a lot right by taking a rational transparent approach in the way the UK government will buy drugs, and that may ultimately provide a model that can be followed elsewhere in the world.

Anonymous said...

With all due respect to the Ali Kat, the Pollyanna "gee, we are all in this together" is not an answer to my concerns voiced at 1:02.

There is an underlying moral question in that I, as an American, am forced to pay more for something to fit someone else's business model.

While sounding harsh, it simply is more fair that costs are apportioned equally, and if the market cannot sustain the equally apportioned costs, then the market reaches a lower equilibrium point - yes, both without additional people obtaining drugs AND without Big Pharma obtaining extra profit. Anything else is obtaining extra profit at my uninvited cost. Forced altruism is not true altruism - it is a form of extortion.

Who knows, Big Pharma may also invent a better development model...

Your answer of "there are other things" sounds reasonable on its face, and yes, all the different factors should be put on the table. However, I do not think it "fair" to attempt to use "other factors" in some sort of "two wrongs make a right" attempt.

I do not think that "negotiated country agreements" are an equitable answer. All you have done is move the ball as to which entity is "screwing me over" or at best, somewhat mitigating the fact that I am being screwed over - and, again, not addressing the basic unfairness.

Also as noted, I do not think the "I'm just going to go rouge" threat from a developing country should be afforded any deference. None. Any country that wants to do so, should be prompted to go for that action with ALL of the consequences attendant bearing down on that country, its leadership, and (yes again this seems harsh) all of the people of that country. When things crater - and rest assured such rouge nations will surely crater - then the people will rise up and throw the "bums" out and join the rest of civilization that accords respect for IP. Sometimes, you really do have to be cruel to be kind.

Suleman Ali said...

In response to anon of 13:36, do you think Sovaldi is presently priced correctly? There's no real international dimension to that debate, but perhaps an enlightening dialogue about drug pricing will be possible in the US as a consequence. I do think this is a complicated issue, but I also think a dialogue is possible where all options are looked at.

Anonymous said...

Mr. Ali,

Unfortunately I do not know enough of the particulars of Sovaldi to render an opinion on that individual pricing situation.

But such does not lessen my concerns at all.

Complicated or not - attempting to alleviate the wrong that I as a US citizen face due to Big Pharma subsidizing profits based on geopolitical pricings (whether 'negotiated' or not), do not - and cannot lessen the inequity that I personally experience by inflated prices.

The notion of "helping one's fellow man," while a noble notion, is simply tarnished when the help is conscripted in a business model run by Big Pharma in an attempt by Big Pharma not to be the one that pays that subsidy.

I realize that I am coming across perhaps in an overly shrewd of cold manner, but someone else deciding to make me be generous is an affront to my own rights that should not have to be sacrificed for anyone else's benefits. Let me decide to be generous to others - do not conscript that generosity.

Anonymous said...

I am one of the anons, but not the US anon, however I wish to answer the question.

Gilead make the following comment:
"Sovaldi was priced such that the total regimen cost is comparable to the previous standard of care regimen for genotype 1 patients with hepatitis C." Also provides higher cure rate and other benefits. It is therefore priced competitively in the market.

Will sales at this price more than justify for the cost of manufacture? Clearly yes. The cost of development? Probably yes. The additional cost of all failed Gilead projects? Maybe. The additional cost of future R&D? Hopefully.

Don't forget, this monopolistic pricing is for a very limited number of years, after which everyone is free to make and sell at whatever low cost suits them.

I have my own question: I want to buy a Porsche, but I live in the UK and my salary won't stretch. Can I buy one at 1/10the the price in India? Happy to drive it home if I can.

Suleman Ali said...

Anon at 15:08 the point you make is of course valid, however I would ask are the higher prices in the US due to failure of health providers to try to negotiate a discount? Whose fault are the inflated prices you refer to?

Anon at 15:15 I agree that Gilead's position can be defended in the way you describe. However drug costs are now mushrooming and at some point will not be affordable by any government. In Europe governments have already started asking for discounts. So the question is how do we decide prices within that scenario? And then can we apply that to the developing world? Your Porsche example is instructive, but medicines are different because it is a public health issue. Patent laws and TRIPS recognize the area of public health as having its own distinct concerns.

Anonymous said...

Mr. Ali,

Given that I am concerned with Big Pharma and the price/business model those businesses employ worldwide, and noting that the sum total profit game is a zero-sum game, I view the notion that I am paying higher costs due to the inability of insurance providers to negotiate a better cost to be a bit of a distraction from the ethical/moral point of the matter under discussion.

For argument's sake, let's say that the insurance providers, or government, or whomever, is able to negotiate or enforce a "better" price (what would align with my notion of fair price).

What then do you think Big Pharma would do? Would they continue to seek market share in developing countries when they do not have a mechanism (overcharging me) to subsidize those efforts?

Let's also remember that Big Pharma does NOT HAVE TO enter these less markets, and introduce into the discussion (especially from my "Ugly American" vantage point that patent rights are negative, exclusionary rights as opposed to rights to do any affirmative actions). Here in the states, it is ENTIRELY within my rights as a patent holder to block all others (for the duration of my patent) anyone - and everyone - from practicing my patent. That exclusion is the Quid Pro Quo for sharing my invention, and the deal is that only after my patent term is up can my invention be freely taken up by the market place.

It is ONLY in the most extenuating and dire of circumstances that this ability to keep out - to totally keep out - circumvented.

The reason I bring up this facet of the patent rights, is that the holder of that right is the holder of a negative right. The nature of a negative right is not one of active practice, and there are additional legitimate moral and ethical concerns about both conscripted practice (mandatory use requirements) as well as the right of a business to abstain from business where that business so decides.

So my "beef" here expands from not just forced "benevolence" in my name, but also forced "benevolence" against the Big Pharma companies as well.

Does "health" draw that much of a difference to override what is otherwise fair and equitable in any other innovation field? Is there a natural drawback being ignored if such fundamental natural consequences are so artificially enforced in one area of innovation, when all other areas of innovation only too well reinforce the words of my former president, President Lincoln?

I do "get" that there are other factors that can be considered. But I also get that the general underlying human nature that knows no boundaries between fields of innovation should not - and cannot - be ignored just because of the "want" to treat healthcare differently.

Forcing altruism can be easily to induce unwanted side effects. Pollyanna "we are all in this" or even noble aspirations such as "human health deserves better results" simply cannot wish away basic human nature, nor ignore the wisdom of general innovation fundamentals.

After all, if we (the royal we) could ignore basic human nature, the political model of communism would in fact bring about utopia. It's just that the real world, and the reality of humans including innovation, are different.

Anonymous said...

Some costs are mushrooming

Mushrooming costs is due, aside from basic inflation, to increased regulatory requirements resulting in the need for extra clinical trials etc.

The point at which the costs are not affordable by any government (let's add private citizens/insurance companies) when those costs are necessary to make an acceptable return (let's say 1% as a nice low limit) is the point at which we can all say goodbye to the development of new medicines and we all start to die young again because we can't treat the new bacteria and viruses.

This scenario can be avoided if we believe those ignorant commentators who argue that the pharma companies are money printing behemoths that can conduct R&D and provide drugs for all for everything for free.

Going back to my Porsche example, firstly I'd appreciate an answer from someone (is it one tenth the price in India or elsewhere?), and secondly there are many similarities. Porsche employs many educated people working to R&D at the forefront of their technological field, spending large amounts of money to produce advances and the investors in Porsche have to pay salaries and make a return (however modest we demand) on their investment. The product is different, but again it is a highly desirable product that everyone who wants cannot necessarily afford.

One difference is that after 10-15 years of market exclusivity everyone can have the drugs, provided they are ones that can be manufactured at a reasonably low cost and provided that those with money pay for the medicines for those have nothing.

Anonymous said...

An interesting and thought provoking blog from Dr Ali.
The patent system seems a pragmatic solution in view of the fact we don't live in utopia. Maybe, to some extent, charging less in some countries is an equally pragmatic acknowledgment that you could never charge the full costs of development there, but you might still be able to make a profit above production costs, getting a quid pro quo in terms of recognition of rights, rather than a free for all.
Are other countries really then subsidising others or is it just a case of realism and better than saying no no no to countries unable to pay full whack? It would be nice to think people can still get rewarded for innovation and drugs reach as many people as possible.

Anonymous said...

"Are other countries really then subsidising others"

Already answered to the affirmative.

Anonymous said...

Hey everyone that's commenting, let's see the reality. Pharma is the biggest enemy of pharma. It's known that it's their own bureaucracy that is driving up R&D costs (http://lifescivc.com/2012/04/culture-as-a-culprit-of-the-pharma-rd-crisis/). So high drug prices are subsidising pharma inefficiency. Whilst we continue to pay they'll continue to rocket up the prices. Let's be honest drug prices in the US are higher because they can get away with it. At least try and notice you are all being ripped off.

Anonymous said...

Yes, they are higher in the US because the can get away with it. That's basically the point of the previous comments.

And no, it has nothing to do with pharma bureaucracy.

If it's down to industry inefficiency why don't you go and develop some new drugs in your kitchen on the cheap. Make yourself very rich while still charging peanuts. Or maybe, it is all a little more complicated than you appreciate?

Anonymous said...

I would agree with Anonymous @ 10:42 rejection of Anonymous @ 8:57; but would not totally reject the link between inefficiency and profits.

The inefficiencies are not a DRIVER of the profits, but they certainly are a RESULT of the ability of Big Pharma to engage in a geo-political profit shifting business model. That is the ONLY "more complicated" factor.

Businesses are only as inefficient as the market will bear. Big Pharma is not constrained to be more efficient in its development process BECAUSE it can - and it has - gotten away with being inefficient because it can - and has - been able to reap profits far in excess of costs paid for by those in wealthier markets. Bringing the comments back in line with the thread's focus, there are very real moral and ethical concerns with this "soak the 'rich' business model" - EVERY BIT as pertinent as the moral and ethical concerns that human health is important.

And perhaps again it is the "Ugly American" in me that resists this conscripted generosity, but an adage from my youth keeps on repeating in my mind: "No taxation without representation." This conscripted "generosity" that I am personally forced to pay is a tax of sorts, collected not by my political representatives, but rather without my representation by Big Pharma.

Yes, this does become "a little more complicated" because patents are involved, and I do believe that patent holders do deserve the fruits that patent protection affords. But I would draw a distinction that shifting more onto my shoulders so that some other individual (regardless of where that individual resides) gets an advantage carries with it a very real - and very negative - moral and ethical implication. Just because that individual is in a developing nation does NOT mean that that individual should have a more favorable direct and personal cost. Frankly, the price SHOULD BE objectively tied to cost and cost alone and not use geo-political factors such as "who can pay." Such machinations rise to a form of reverse discrimination and I, as a citizen of a wealthy nation - but not being personally wealthy - am truly caused to suffer disproportionately.

Where is the ethics and morality of that?

That's about as duplicitous and morally bankrupt as the Green movement that knowingly would allow developing countries to pollute more "in order to catch up." Sorry, but just because one nation "got ahead" in a timeframe where the dangers were less known and less appreciated does not - and should not - allow for the wanton disregard of dangers now known and now appreciated just to "even things up."

Anonymous said...

The UK Cancer Drug Fund is to be restricted (http://www.bbc.co.uk/news/health-30787132) because the government cannot afford it.

Anonymous said...

The inefficiencies need to be explained before the arguments holds. Pharma is highly competitive and that results in minimal 'flab' in R&D.

Duplication of effort may be an argument, but if we limit R&D to a single company in a particular area we reduce the chance of success and eliminate the competitive benefits. Several successes in the same area still produce drugs having different benefits, a desirable outcome.

Anonymous said...

It's always seemed to me that the current system is inherently inefficient. Partly because the pharma companies want to make a profit, but also as follows:

Suppose a pharma company develops a drug, which is going to be on prescription so all sales will effectively be paid for by the government. The higher the price, the less the government will buy, so the company try to price the drug to hit the "sweet spot" where the profit is highest. Assuming they've done their sums right, the government pays all the costs of developing the drug plus enough to make the company an acceptable (to them) profit.

But - despite the governement having paid for the development, they can't give the drug to all those who they want to, because the cost of the drug is too high. So they don't get the full benefit, despite having paid all the development costs.

If they'd developed it themselves they would at least be free to make the stuff and give it to all the patients they think would benefit from it.

So it seems to me that the system is inefficient and would be better all round if the government simply paid people to develop drugs. Is this just socialist naivety or is there a reasonable point there?

Suleman Ali said...

In response to anon @23:35 that's a brilliant thought. Government is already funding a lot of basic research, at universities etc, and so your suggestion takes it a step further. However pharmaceutical companies operate in the free market for profit, and the free-market can be very good at allocating resources and making decisions about what to pursue. The free-market is also incredibly good at getting things done, and government decision-making as part of that would might interfere negatively. A lot of complexities would happen if government funded pharma, for example how much influence the government would have in decisions and how profits would be allocated. I am very much in favour of government funding wherever possible, but only where the situation is right.

Anonymous said...

I agree that government funding as suggested is a great idea, because that will lead to greater investment, increasing new numbers of new drugs in all areas, not just those useful for treating millions of rich, but also those for treating the just a single poor person with a unique disease.

Those inefficient pharma companies are so grredy in wanting to make a profit. Why should the government pay for both the cost of the R&D for a specific drug and then pay extra for profit???!!!! Unacceptable.

Those evil corporation argue that that they also have to pay for the significant R&D costs for products which never make it to the market, and that for every new drug they have tested thousands of compounds. Well, I don't believe the government, on behalf of us sick indiviudals, should pay for the failures, too. I only pay for what I receive. The cost of drugs will plummet by 95% at least I'm sure if we go down this pathway.

I have much more to say, but the doctor says it's time for my medication.

Anonymous said...

The new Indian Patent Office Pharma Guidelines for examining inventions(http://www.managingip.com/Article/3409546/Managing-IP/India-Pharmaceutical-patent-guidelines-welcome.html) are much more lenient than expected. So perhaps cooperation is happening after all

Anonymous said...

Depends what one was expected. The issue is Section 3(d), the application of which is in breach of TRIPs.


Excessive limitation of Markush claims is not a problem in India, because Indian companies are only capable of copying the main exemplified compound in any case. Any attempt at developing a variation of a compound proven by the originator to be of benefit to mankind, is completely outside of their mindset and skillset.

The management and shareholders of the generic factories make enough money to buy themselves nice Porsches, so I hear.

Anonymous said...

Anonymous of 9:54:

I think you may have missed my main point. I did point out that paying a profit to pharma companies took money out of the system, but that wasn’t my main point. Also, I didn’t mention about companies needing to make enough on their “hits” to cover the cost of the their “misses”, but I perfectly accept that. It’s a bit like the way record companies put money into bands, only for any band that does hit it big to immediately complain that the company is demanding rather a lot for the money it has put in so far.

I’ll try and explain my main point again, with an example. Suppose the cost of developing a drug for a particular condition is £900k. (You can add a few zeros if you think that makes the costs more realistic, this is only an example…) In that sum I’m including all the costs of the dead ends, and indeed let’s assume that figure is a sort of average to reflect the fact that the company may do all the research and not find a dug after all. Now suppose that there are 2000 people who this drug would help. We’ll assume that if the company charged £5 per person for the drug then the government would buy it for all of them. And we’ll also assume that the actual cost of the manufacture is under £5 per person - the costs charged is to get the research costs back. And the company wants a profit too, so they want back £1m in total.

Clearly they won’t get that at £5 per person. If they charged £400 per person, the government would get cold feet about supplying it to everyone - but even at £400 per person the company won’t get their money back. But - suppose there are 100 people for which the drug would literally be a life-saver. The government would buy the drug for them even if it cost £10,000 per person (just as the government will pay £50,000 or so a year to keep someone in prison). So price the drug at that, and the company gets its money back. The snag is though, that only 100 people get the drug, 1900 must go without because of the cost. Whereas if the government could pay for the research and get the right to manufacture the drug, all 2000 could have it. Which in theory wouldn’t cost the government any more.

This isn’t due to the company being greedy, it’s due to the business model. It’s a bit like where a wedding photographer charges a low fee for doing a wedding but charges a large mark-up on the prints he sells. The results is that there are lots of nice photos which people see but, because of the costs, decline to buy.

Anonymous said...

There are simple economic facts which mean the idea won't work to save money, even ignoring the competitive aspects and incentive to make the R&D successful, as opposed to civil servants burning govt (or rather taxpayers) cash. I dont like your analogies, but a similar one is the BBC spending whatever we give it and always having a need for more.

If the Pharma company needed to make a return on 900K, a typical return may be say 7%. This is what a shareholder investing may expect, for example. The cost of drug must therefore cover costs and this return.

If the govt invested the 900K, as you say, no extra return, i.e. profit, may be demanded. However, the govt must borrow this money and the banks will expect a return on their loan, say 7%. The taxpayer is therefore no better off.

In any case, as pointed out previously, there is nothing to stop the government or any other non-profit making organisation making this investment in R&D. If you are correct, they will be able to compete on price with Pharma, thereby causing a more competitive market and your desired change in the business model.

Anonymous said...

Anon of 22:19

Taking your hypothetical figures a step further, let's say the the cost of production of 100 is 100k (and the cost of production of 2000 is 150K), so why shouldn't the government offer the company that invented the drug 900k for all their rights the company makes the same profit as before (100k) and the government for 50k more treats all 2000.

Anonymous said...

Because the company will rightly tell the government where they can stick their 900K offer.

I find it difficult to fathom while people can't understand the realities of this industry.

There is simply no such thing as a "let's make loads of new drugs for everyone on the cheap" scheme.

Anonymous said...

NICE are delaying the introduction of Sovaldi into the UK due to cost: http://www.theguardian.com/society/2015/jan/16/sofosbuvir-hepatitis-c-drug-nhs

Anonymous said...

That is fine. it is the British taxpayer exercising their right to spend their wealth as they see fit. People wish to spend more money on cigarrettes, alcohol, BMWs, empty aircraft carriers, the Olympic Games, etc, than they do on medicines and the R&D that create them.

There is obviously a balance between a desire to live forever and having some pleasure while alive.

Anonymous said...

For anyone that's interested the EU Commission's position on pharmaceuticals in the TTIP negotiations is given at http://trade.ec.europa.eu/doclib/docs/2015/january/tradoc_153010.4.7%20Pharmaceuticals.pdf, and at http://trade.ec.europa.eu/doclib/docs/2014/may/tradoc_152471.pdf

Anonymous said...

This report says the NHS is paying too much for medicines: http://www.bbc.co.uk/news/health-31507861

anti idiotype  said...

For anyone that's interested the EU Commission's position on pharmaceuticals in the TTIP negotiations is given at http://trade.ec.europa.eu/doclib/docs/2015/january/tradoc_153010.4.7%20Pharmaceuticals.pdf, and at http://trade.ec.europa.eu/doclib/docs/2014/may/tradoc_152471.pdf

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