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49 Comments
- freff, on 10/12/2007, -0/+20To be perfectly honest, you can expand this argument to patents in general. It really is time to take a look a patent law, and do something about the ones that discourage innovation and competition.
- DDoSAttack, on 10/12/2007, -1/+12The greater majority of patents these days fall under the "discourage innovation" moniker. It is sad really.
I think about it in the sense of, What if Thomas Edison had hundreds (if not thousands) of people that worked only to figure out and submit little intricacy relating to the usage of electricity to create light to the patent office? Where exactly would we be? Lots of electrical things emit light. Would the toaster be a patent infringement?
I understand the need to protect your invention/investment but come on really this is getting out of hand! - ThinkBox, on 10/12/2007, -2/+10Short answer: Yes.
Long Answer: Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. Yes. - dgaspard, on 10/12/2007, -0/+5@BigSlacker... I can understand patenting your code and your design. But to patent an idea should be completely bogus. What if Microsoft patented a Graphical user interface on a computer? Then you would have to pay royalties for every application you design.
- Junkyarddawg, on 10/12/2007, -1/+5That is not at all what this story is about. The story is about how companies prefer to develop drugs very similar to old drugs, and patent them, instead of developing entirely new drugs. The articles suggested fix is to not allow companies to patent drugs similar to existing drugs.
- mt066, on 10/12/2007, -1/+5And this is exactly the reason you will see pharmecuticals opposing any type of patent reform. Whatever reasons they give publicly, disregard them. This is the real one.
- inactive, on 10/12/2007, -4/+7Short, short answer... government intervention on most things stifles creative thought and innovation!!! Period!!! Think about it, marijuana is the number one cash crop in the US at $38 billion dollars and it has no taxes on it. Huh, maybe we need to rethink our current tax structure before it kills the whole country!!!
- mousky, on 10/12/2007, -0/+3BigSlacker: Don't buy into the myth that innovation can only occur with patents. Having a patent is no guarantee that you will see a return on your investment. It's not that the patent that matters, but how the patent is implemented in the real world. My question to you: Who is more innovative: NTP, the company that makes no products, or RIM, the company that actually manufactures a product that millions of people are addicted to? Your answer will be telling.
- hackwrench, on 10/12/2007, -0/+3You're a bit.
http://en.wikipedia.org/wiki/Bit
http://en.wikipedia.org/wiki/Tron_(film) - hackwrench, on 10/12/2007, -1/+4Ah, so they're in the counterfeiting business. Businesses aren't in business for the purpose of of churning out piles of cash. They are in business to service the economy, which in turn exists to provide humanity with goods and services it desires. Failure to provide humanity with goods and services it desires is counterfeit and fraud.
- Junkyarddawg, on 10/12/2007, -0/+3I don't know about that, but they'll definitely lob against any changes in these patent laws.
- argoff, on 10/12/2007, -1/+3If a researcher looses a monopoly on one patent, but in turn gains access to 10 million other patents - then that is a net gain for invention and for business, not a net loss. The facts bear that out. For example, how most the new drug innovation was happening in India where they don't have patents on drugs, or the less proprietary x86 architecture that took the market by storm in spite of it's design flaws. Patents do not change the drive for invention and R&D, they only distort the market and cause it to center around invention controls instead of invention related services. Well, guess what. Companies, lawyers, and governments are good at controlling things. Inventors are good at inventing things. Patents do not help inventors or innovators.
- PharmaPhool, on 10/12/2007, -1/+3While the patent situation is part of the problem, the Pharma industry suffers more from massive regulatory overhead. Most people outside the industry don't realize how much is spent in product tracking, adverse event recording, long term data storage and retrieval, validation, inspection, and all the redundancy that comes with these efforts. Google "21 CFR Part 11" for just a small taste of a growing burden of regulation.
Now factor in the fines that the FDA funds itself with to enforce those regulations... its basically in the benefit of the FDA to make a regulation and fine a Pharma company for non-compliance.
Now factor in both State and Federal government cost rebate system... a maze of calculations that basically force Pharma companies to track the cost of their product at every level of the supply chain and assure the various government entities are getting the best price regardless of volume.
I am in no way apologizing for the big Pharma drug pricing practices, I am just pointing out that I think the regulatory environment more than the patent environment is what is driving the effort toward "similar" drugs vs. "new" drug molecules. - sirloin, on 10/12/2007, -2/+4it is designed to prevent generics from entering market once patent runs out.
- 7of7, on 10/12/2007, -4/+6Yeah, by all means let's get rid of patents. That way I don't have to have an R&D department, I can just steal other companies' research and produce the same things at a fraction of the cost.
- jerbaker, on 10/12/2007, -1/+3The regulatory overhead that the pharmaceutical industry "suffers" under are regulations they agreed to to avoid the Medicare system negotiating lower prices on drugs and other governmental action. Do you really fool yourself into thinking an industry that dumps more than $100 million a year into lobbying is suffering under regulations they didn't approve of? Give me a *****' break. Poor pharmaceutical companies.
- juliocgrajales, on 10/12/2007, -0/+2More interesting read in reference to Patent Law:
http://www.alertnet.org/thenews/newsdesk/L19366964.htm - jerbaker, on 10/12/2007, -1/+3"Finally, if enough people stop buying Bigpharmaco's Drugium++, then the companies will be forced to invest in other innovations."
The problem with that assumption is that it requires people to have the medical knowledge of the product and its alternatives. Not everyone goes to medical school, and the pharmacology of some drugs is pretty complicated. That's why there are pharmacists and doctors. Remember that free markets are only optimal if the consumer has all of the information required to make an informed decision. Without that knowledge people have to trust what is prescribed to them by their doctors.
The problem with assuming the free market is optimal for everything is that it requires each and every person to become an expert in every field in which they might need to make a market decision. This would be a tremendous waste of resources and would destroy the gains we get from specialization. If consumers make economic decisions without that expertise then the market is not going to move to an optimal solution since bad products and or services will stay in the market. The reason there are specialized fields and regulations is to try and reap the benefits of specialization while allowing the market to function. That can't happen with no regulation at all. - mousky, on 10/12/2007, -0/+2Straight from the US Constitution:
"To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;" - dracostimpy, on 10/12/2007, -0/+1It's perfectly fine if another company takes it at the tail end, because by that point the company that developed it ought to have made a nice fortune from being first to market and developing brand recognition.
After the initial windfall to reward their invention when competitors start to sell the drug, the company that developed the drug then can still profit as long as they provide the drug at the best price. As long as they do that (and they ought to be able to given that they were first to market), then they'll continue to outsell their competitors.
All patent laws do is prevent competition and thereby promote price inflation, which is why you have to pay $100 a bottle for some medication that could easily be made for $10 a bottle if not for the patent. Removing patent laws would actually COMPEL constant innovation, because no business can rest on its old ideas and milk them for longer than it takes for competition to start selling their widget.
Look at the console or processor or GPU wars... different versions of essentially the same thing. Drug companies can do just the same. Each drug company could market their own version of the same drug with unique side benefits as their main selling point, just as PS3 hypes its BluRay vs Wii's controller vs XBox's umm Gears of War.
How about some Viagra with B-12 for added stamina? Or, if you're a marathon runner already, a Viagra sports drink with electrolytes to replenish you after your humpathon? Each can still make money by tailoring the product to certain types of consumers... the possibilities are limitless, and the end result is prosperity for all. - rwvalentine, on 10/12/2007, -0/+1argoff,
killing patents will bring costs down. no existent drugs cost $0.
who the hell will create drugs for altruistic reasons? - ddxChrist, on 10/12/2007, -0/+1For most things I'd jump right out and say yes, patents definitely stifle innovation, but at the same time, not having them might stifle innovation even more. Take, for example, antibiotics. It can cost upwards of $800m to develop a novel antibiotic in this day and age, and can often take a decade to do so.
I recall writing a review on multidrug resistant bacteria. At any rate, here's a direct quote that is pertinent: "...a group of researchers from Tufts concluded that the average cost of developing a new drug had more than doubled... to $802 million... that might be used by a patient for less than a week versus return from a drug for a chronic condition that a patient might take daily for fifty years" (Plotkin and Shnayerson 278).
Also, pharmaceutical companies end up spamming their drugs at conferences and conventions to gain exposure.
One must also think, without the current patents they might not even develop drugs at all if it costs so much and they'll gain even less money because another company can just take it at the tail end of their research.
It's a giant balancing act and the one that suffers the most is the customer in need. - dgaspard, on 10/12/2007, -1/+2I wouldn't be surprised if the pharmaceutical companies lobbied for these patent laws themselves to keep prices high...
- argoff, on 10/12/2007, -0/+1One side effect of the patent system is that researchers who share research and innovation between companies are severely punished. Because people can't or don't collaborate as much, it forces innovators to spend orders of magnitude more on R&D and causes them and their research to be micromanaged. So patents drive up the cost of R&D by orders of magnitude, and then now they say "well, we need patent monopolies to recover all these costs". The solution to high costs isn't patents, but to kill patents, the FDA, and the prescription system racket.
- jerbaker, on 10/12/2007, -0/+1Wait a minute! You're against governmental interference except when a pharmaceutical company's profits are involved? How do you justify governmental interference in the industry at all? In a real free market (read libertarian market) there wouldn't be any regulations stopping one company from copying another. It is only with governmental regulations that patents are enforced. Now you say giving them a free market is tantamount to stealing? Suddenly the free market is bad if it's going to cost big business money? Your motives are transparent, sir. It appears as though what you are for is not a free market, but only removing regulations that prevent even larger profits and keeping regulations that benefit business financially.
- Harangutanon, on 10/12/2007, -1/+2This argument against so-called me-too drugs is way overblown.
Which innovations are incremental and which are transformative? Which ones have value? Simply, the value of any product depends on the consumer. When you go to the drugstore, or any store, you want to make the purchase you prefer, not the one other consumers prefer.
I might have an apple and prefer an orange. You might have an orange and prefer an apple. A trade would benefit both of us. Which is worth more? The only answer to that question is “worth more to whom?”
The value of any given innovation to a patient depends on his situation. Consider heat-stable insulin. Government health boards would certainly see it as only incremental innovation over regular insulin. But in Africa, where good storage is expensive and rare, heat-stable insulin would save lives. And in the West, it would save money, because expensive refrigerated shipping would not be needed.
Or look at new drugs to treat tuberculosis. The current drugs are effective but must be taken for several months, and some patients must be supervised or they forget to take them. New TB drugs could shorten the treatment time, improving patient compliance and saving money on directly observed therapy. Now, if you’re a very responsible patient who needs no supervision, you won’t pay much more for that innovation. From a parochial point of view, that’s just another me-too slight modification to an old molecular entity. But if you value the ease of taking fewer pills, then maybe you are willing to pay more. Is that merely incremental to the regulators? Why should anyone make such a personal choice for someone else?
We recognize the commonsense importance of incremental innovation in our daily lives. Would you seriously consider walking into a dealership and offering to buy a 2006 BMW 7 Series for the same price as a 2002? Of course you wouldn’t. Then why would you think you have the right to pay the price of an old-fashioned drug and expect to receive a shiny new drug with better features? Some new drugs, just like some new car models, aren’t sufficiently new that it’s worth paying more for them, or even switching from your existing product. But who is best positioned to make that decision for a patient? Only the patient and her doctor can assess her unique needs and resources. If you don’t think a new drug is worth buying, then don’t buy it. Buy an older, lower-cost generic.
In the Netherlands recently, a new time-release capsule version of Ritalin, called Concerta, was just hitting the market. Concerta improved upon Ritalin in that consumers could take it once a day, instead of the thrice a day dosage schedule of Ritalin. When it was developed, some government regulatory bodies—such as in the Netherlands--called it an insignificant improvement over Ritalin, a mere “incremental innovation.” They decided to reference price Concerta at the price of Ritalin, one-seventh the market price. What happened? Over 10,000 Dutchmen and women are paying over 600 euros a year for that innovation that bureaucrats deprecated as incremental. Imagine how many more would choose this option if they had information about it as a health option.
If a drug company develops a new product whose advantages are so trivial that no one wants it, no one buys it. No one suffers but the company.
In fact, however, even a trivial innovation, or what some call a me-too drug, benefits consumers by creating more competition, driving down the price of drugs in its class. And if you look at drug prices, you’ll find that new drugs entering existing classes of drugs in a market environment are most often priced at a discount off existing drugs. If anything, similar drugs help reduce drug costs by increasing competition. Shouldn’t we do everything in our power to increase this type of competition?
When new classes of drugs emerge, many drugs within the class are developed at the same time or as improvements on earlier versions. For example, in the United States, there are 7 different drugs in the same class, called triptans, used to treat migraines. They were all developed concurrently, and though some were approved before others and were on the market first, the competition for market share between so many on-patent, brand-name drugs has resulted in their prices all being around the level of generics. If more countries encouraged the development of me-too drugs and permitted competition, we could see more savings and more clinical, social, and economic benefits.
Another advantage of having a large number of slightly different drugs is that it offers doctors a greater ability to treat different patients. The first drug in a new class to make it onto the market breaks new ground, but ten years later it is rarely the safest and most effective of its type, or exactly what all consumers want. If you look at the World Health Organization’s Essential Drug List, you will see that half the drugs listed are the result of incremental improvements on older drugs.
Everyone responds to a drug in a somewhat different manner. It depends on a variety of factors such as the patient’s genetic makeup and lifestyle. For example, as few as 50% of patients may respond to any single drug related to the central nervous system. Beta-blockers are another example of a class of drugs where no single one works well for everyone. The more drugs available for a physician to treat his patient, the more likely the patient will respond to one. Different drugs may not offer a novel or therapeutic improvement for everyone, but they may for different individuals.
Look at HIV and AIDS drugs. As soon as the first anti-retroviral drug had been created, someone opposed to incremental innovation would have decreed that additional anti-retroviral drugs were unnecessary me-too products. If everyone had adopted this approach, we might have been left with only one anti-retroviral drug. Fortunately freer markets were available. More drugs were developed and in 1996, researchers recognized the outstanding benefits of combining multiple anti-retroviral drugs into a so-called cocktail. This research finding--itself an incremental innovation over how the drugs were previously taken--has changed an HIV diagnosis from a death sentence to a condition with which many people are able to live long, relatively normal lives. But none of this would be possible if we decide that once a first-in-class transformative drug appears, further drugs in that class aren’t worth it.
Further, when taken all together, the small improvements that each incremental innovation offers can result in lower treatment costs, shortened—or eliminated—hospital stays, increased worker productivity, and less absenteeism.
Take controlled-release formulations of cardiovascular drugs. The relatively small development of a once-a-day version of the calcium channel blocker nifedipine, or the once-a-week version of the previously twice-a-day transdermal clonidine, led to more people taking the drugs properly, since it was so much less of a hassle. The overall cost of treatment has declined.
A study examining the effects of different antihistamines found that productivity losses in America due primarily to the sedating effects of antihistamines ranged from $2.4 billion to $4.6 billion a year. Newer non-drowsy antihistamines such as Allegra have had a dramatic impact on reducing these costs.
Because new drugs extend and improve the quality of our lives, any actions or inactions that hamper innovation in the pharmaceutical industry have an adverse effect on people’s health and well-being.
Moreover, not every drug can be a first-in-class blockbuster innovation. The drug and device research and development business is one of the riskiest on earth. Companies can only afford to make the risky long-term investment in potentially transformative products if they have the revenue generated by smaller, more incremental innovations.
Look, maybe some me-too drugs aren’t worth the additional cost. Fine, then don’t buy them. - rwvalentine, on 10/12/2007, -0/+1drugs don't just "exist"
they are created by people who expect to be paid for their work - VolatileWhimsy, on 10/12/2007, -0/+1In defense of drug companies (which i dislike) and the patent laws.
These drug companies have spent quite a bit of money developing these drugs. They are able to recoup their loss by the patents and beign the sole provider for these drugs for a period of time. Without it they would not try so hard to develop these drugs. - BigSlacker, on 10/12/2007, -0/+0Private store labels are a trademark issue and not a patent issue. They have got slammed for misrepresenting their product with a competitors trademark by making them look almost the same.
- BigSlacker, on 10/12/2007, -1/+1You don't even have to steal it, since they don't have a patent.
- inactive, on 10/12/2007, -0/+0Redundant question.
Patent laws stifle pretty much any innovation.
Technological, pharmaceutical.. you name it. - BigSlacker, on 10/12/2007, -3/+3I agree obvious and non-specifics things should be rejected. Or things that already exist and someone tacks "on a computer" or "on the Internet" to it. Patents are still essential to R&D investment. People simply won't do it if there is no potential return.
- heptahedron, on 10/12/2007, -2/+2If patents were being abused by pharma companies, then why have these corporations increased R&D spending by $147% (only been able increase applications by 38%) over the term of the cited study? If you look at the amounts spent per NDA (New Drug Application), it doesn't look like the companies are taking the cheap and easy route -- R&D costs per application have nearly doubled. Instead, it looks like its getting harder and harder to find candidate drugs that are worth developing (have a large enough market to make spending a $1 billion is worth it).
I suspect that this study reflects more on the maturation of the pharma industry then on any intentionally evil attempt to abuse patents. There are a only a few dozen of high-value targets (e.g., blood pressure, cholesterol, allergies, stomach acid, arthritis) in which millions of people might buy billions of pills (i.e., R&D costs can be less than $1/pill) over the life of the patent. Once a drug is developed for that target, the company faces a decision -- try to develop a drug for a niche disease or try to develop another drug for a high-value disease. Not only is the return higher for finding another drug for a high-value target, but the risk is lower if the company merely modifies a preexisting drug in hopes of finding a better version of an old drug.
As for increasing the number of real new drugs, I see three options. First, more government R&D (including spending billions of clinical studies) could help. This assumes that some government is feeling charitable about paying for the entire world's drug R&D needs. Second, companies might invest in niche medications if there were more lucrative terms in selling niche patent medicine -- shouldn't a medicine that adds a year to someone's life by worth $30,000 per treatment or so? If a company can find 50,000 patients willing to spend $30,000 each for a new drug, its worth spending a $1 billion over 10 years. Third, I know it won't be popular in Digg, but longer patent terms would increase companies' willingness to do R&D on real innovations for less mass-market medications. After all, the data proves that the companies are willing to spend large sums on R&D if they pay-off is there. Because of the long development time relative to the patent's life, adding just a couple of years to patent terms would double the potential profits from a new drug.
If pharma companies are greedy bastards, why not use their greed to encourage them to tackle harder problems?
Finally, if enough people stop buying Bigpharmaco's Drugium++, then the companies will be forced to invest in other innovations. - BullTaco, on 10/12/2007, -0/+0more accurately stated:
"A report by the General Accounting Office concludes that current patent law discourages drug companies from developing new drugs by allowing them to make excessive profits through minor changes to existing pharmaceuticals. "
Nobody concludes anything in the report.
Concerns are expressed that pharmas are gaming the system to gain an additional three years on their patent terms. Thus diverting funds from new drug development into existing drug lines.
Any development of new drugs would be partially motivated by patent protection.
So more accurately stated, patent system both encourages and discourages (according to concerns expressed) innovation in the pharmaceutical industry. - BigSlacker, on 10/12/2007, -0/+0Myth? It's simple math. I spend $100 grand to develop a $10 product. Now I have to sell a ton of those to break even. Without a patent, someone else buys the product, copies it, and can be profitable immediately selling them at $7. All my research money is lost. Why would I have put up the cash in the first place?
- mousky, on 10/12/2007, -1/+1BigSlacker: No. They will spend your so-called 'billions' of dollars to make tens of billions of dollars in profit. You believe that with no patents, no drug company will spend money on R&D. That is false. A patent does not guarantee the patent holder anything. Let's look at the food industry. Every grocer has private label versions of almost every product available in their store. Private labels are typically cheaper. Their quality varies, but for the most part many private label products are comparable. Yet, people continue to buy the more expensive brand name products. Bayer continues to make Aspirin despite the availability of private-label/generic versions. This whole notion that you need patents to innovate is down right silly.
- krinthekuz, on 09/16/2008, -1/+1hurray for FUD. drug patents are what gets a drug from 93% efficiency to 99% efficiency. in countries that don't have such patent protections, innovation simply does not exist. the development of EVERY single top tier country has required IP protections. pick up any patent law case book. this is generally the first chapter or two.
HOWEVER, this is the exact opposite of software patents, where innovation happens at a grossly faster rate than both the market and the law, and IP laws are used to slow innovation down to generate ROI. additionally, software patents often cover technologies that have been in the public domain for years (microsoft's RSS patent anyone?), or entire business methods that are just accomplished through software (netflix's online rentals). business methods are patentable by law, but in practice unofficially required to come to an abnormally high standard for the elements of a valid patent. the truth is that the USPTO just doesn't have many people who understand software patents, and the particularity required in the claims of patents is worthless.
-- patent law student. - Junkyarddawg, on 10/12/2007, -2/+1Yeah, I'd agree with that. The patent situation is pretty much a non-issue for drug companies.
- jackflack, on 10/12/2007, -2/+1Well that must be the answer... We haven't seen many new drugs in the last 25 years because all the ones we have work fine. I find it to be total BS and while I wish the whole patent system would be abolished because of abuse, this is clearly not the reason why.
I have worked in the biotech field, and trust me there is tons of money going into RD. Unfortunately not all products work, and while some work even less get FDA approved because it can cause a hemorrhoid in one mouse out of 100,000. - funkspiel, on 10/12/2007, -3/+2Patent lawyers are failed engineers.
- inactive, on 10/12/2007, -1/+0Drugs exist to cure and help ailments, not to profit from.
So that's where that argument is flawed. - dustyshadow, on 10/12/2007, -3/+2"Ah, so they're in the counterfeiting business. Businesses aren't in business for the purpose of of churning out piles of cash. They are in business to service the economy, which in turn exists to provide humanity with goods and services it desires. Failure to provide humanity with goods and services it desires is counterfeit and fraud."
You'd fail at corporate life. If a CEO had that opinion, he'd be fired and sued by the stockholders. - psbpv3o, on 10/12/2007, -4/+3Merry Christmas!!!
- BigSlacker, on 10/12/2007, -3/+1Logic failure. If these changes are only minor and not useful, why do people pay the premium for the new one verse just buying the old version? I think it's far more likely the new molecules that work just are rare.
- netdroid9, on 10/12/2007, -4/+1Get rid of patents and make it illegal to reverse engineer stuff for the explicit purpose of profit, perhaps? It makes a lot more sense than the current system.
- BigSlacker, on 10/12/2007, -5/+1So they'll dump billions into research out of the goodness of their hearts?
- guytoronto, on 10/12/2007, -6/+2How about, it's none of the government's business.
The pharmaceuticals are private industry. What they do with their time is their business. They aren't in the business of solving the world's problems, and making everyone healthy. They are in the business of churning out piles of cash.
If the government wants to see more medical innovation in pharmaceuticals, maybe they should offer more incentives to the big companies, not threats of stealing their bread and butter. - Junkyarddawg, on 10/12/2007, -8/+4In this particular case patent law isn't discouraging innovation. It's just _not_ discouraging "me too's".
It cost hundreds of millions of dollars and takes perhaps 10 years to develop an entirely new drug.
It takes tens of millions and one or two years to develop a minor modificiation to an existing drug.
Either is likely to make hundreds of millions of dollars for the company.
Hence the company develops me-toos instead of new drugs.
Patent law is, frankly, not a big factor except in that it is possible to patent drugs which are very similar to existing drugs. Fact of the matter simply is that "me toos" are more short-term profitable to the company than entirely new drugs are. - BigSlacker, on 10/12/2007, -10/+2BS. If I can't protect all the work I put into developing something just to have someone rip it off, I'm just not going to bother. Even if I wanted to, I would be bankrupt in no time and would have no choice.
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