Problems and imperfections in biotech patenting: realities on the ground and trying to fix the system

This is the last post in this series of six on biotech. The earlier posts can be found here (introductory), here (ethics), here (case law), here (strategies for protecting biotech inventions) and here (financing). This post will briefly the issues of ‘drug prices’ and ‘access to medicines’ which received the most comments on previous posts. In addition, certain topics tackled in earlier posts will be discussed in the wider context of giving advice to companies and changing the patent system.

Your comments on what to do about the price of medicines

Benjamin worked hard to keep
R&D costs low

We live at a time when drugs are becoming increasingly expensive as research and development (R&D) costs escalate. The large pharmaceutical companies are restructuring and setting up collaborations with academics in order to remain innovative. However they face many different challenges, including the fact that many patents on their blockbuster drugs are expiring, the so-called ‘patent cliff’. The continuing rise in drug prices causes controversy in developed countries. Developing countries, which are poorer and which have much more serious public health problems, have started to cut back patent rights so as to make medicines more affordable.

Many of the readers’ comments defended high drug prices as reflecting the cost of R&D and criticised countries which did not respect patent rights. This Kat believes that we need to recognise that we are in a period of transition. Organisations that buy drugs are putting pressure on pharmaceutical companies to reduce prices. For the first time this is also happening in the US. Presently the high price of the drug ‘Sovaldi’ is causing controversy. After some consideration the National Institute for Health and Care Excellence (NICE) has agreed that the UK will buy it. France has negotiated a lower price. India has refused a patent application for Sovaldi based on the ‘enhanced efficacy’ requirement for drugs related to known drugs. This Kat believes that new payments models will evolve in response to the present difficulties and that in time the costs of R&D will come down as new research ecosystems come into being.

This Kat also believes that India is an important country in which to try and get things right. It is seen as a leader nation amongst the G77 group of developing nations and so its actions will have influence. There are no easy answers for providing affordable medicines to the developing world. However, this Kat suspects that things will change as we transition to a multipolar world and new forms of international collaboration will come about providing new solutions.

Patents as responsive tools to support innovation


Few can handle complex strategy

This Kat is always impressed at how well the patent system works in supporting innovation, allowing an entrepreneurial financing system to evolve based on patent monopolies. My fourth post was about patent strategies for protecting biotech inventions. One of the points I was trying to demonstrate in that post is that patents are a very flexible instrument which can be tailored to optimally serving the commercial needs of the specific situation. However, based on this Kat’s experience in working in early stage biotech, he believes that companies are not adequately aware of that. In particular they don’t recognise that particular patent strategies need to be adopted based on the scenario they are in, for example early stage v. late stage, academic tech transfer v. secretive long-term development, and collaborative v. independent research. Many companies will not consider how their strategy needs to respond to competitor activity. All of this means that the real role of the patent portfolio in the company’s activities will not be properly understood. For example the company will not see that using patents to attract investment, negotiate collaborations or inhibit competitor activity are distinct activities which impact differently on what needs to be claimed and the portfolio which is built.

Recognising the complexity of decision-making in patent strategy

Why would you file a weak patent case?

In order to be most effective in using the patent system one must recognise all the options that are available at each stage. Often the decisions that need to be made are difficult. For example, in biotech ‘when to file’ is not always straightforward when one is in a race with a competitor and there is continuous generation of data from an R&D program. As part of this the potential impact on future filings needs to be considered. The company may also want to decide on how ‘strong’ they want their case to be.

The reality is that many small biotech companies simply don’t have the resources to develop and follow complex patent strategies, especially if they do not have an employee whose sole task is to be responsible for the IP. The Kat has seen that when a ‘weak’ case is filed to a ‘modest’ invention for strategic purposes, the complex reasoning might not be understood by the rest of the company, causing confusion and even criticism. That alone can be enough to make the filing counterproductive.

Should we change the patent system to help biotech?

This Kat firmly believes that early stage biotech research needs as much support as possible. He has worked with many people who are trying to commercialise such technology and they find the patent system to be too complex, too expensive and filled with too much uncertainty. However there are always ‘unintended consequences’ to changes in the patent system and this Kat believes such changes should not be driven by negative ‘reactions’ to things. In the US the reaction to ‘patent trolls’ contributed to the American Invents Act (AIA) and other proposed legislation. The AIA brought in new post-grant proceedings which have proved very effective in invalidating patents, and we still do not know how the consequences of this on all users of the patent system. Myriad’s aggressive patent strategy may have caused a negative reaction at the US Supreme Court leading to the controversial Myriad decision, which has led to an even more controversial USPTO Guidance completely changing the patentability of natural produces in the US (see Katpost here). This Kat is not afraid of thinking about how the patent system could be changed to better serve biotech research (see PatLit post here). However seeing the difficulties US companies are presently having in coping with a changing patent system makes one realise the need for caution.