Yes, fix the patent system

Posted May 7, 2011 3:13 UTC (Sat) by CycoJ (guest, #70454)
In reply to: Yes, fix the patent system by butlerm
Parent article: A victory for the trolls

Can we please stop the myth that pharmaceutical patents are the great example for justification of patents.

The pharmaceutical industry is probably so "evil" patent trolls pale in comparison.

1. Pretty much all Pharma companies have significantly higher marketing than R&D budgets (that's not evil, but still proves a point).
2. They are also one of the most profitable industries, so doesn't seem like they really need patents.
3. They research is mainly on the "diseases" of the rich. For example the amount of money they invest into researching a cure for Malaria pales compared to the research into something like diet pills
4. They have been the main companies behind the push to extend patentability, who do you think are the main industry who are pushing ACTA?
5. They are also the companies who are the main drivers behind the US government pushing draconian trade agreements, onto developing nations. Which often leaves the poor in these countries without access to cheap generics.
6. They are extensively abusing the patent system, by creating perpetual patents, i.e. when a patent expires they apply for a new patent where some compound is slightly changed, the trick is you can't make the old patented medicine, without violating the new patent.
7. They have been caught multiple times paying for favourable publications/studies.
8. Their patents actually only start after FDA approval, so they possibly get 20+x years of patent time. Even worse, as part of TRIPS (I think it was), this applies again to other countries. So they have FDA approval in the US, but they think country X (usually a developing nation) is not wealthy enough, so they don't apply for approval there. Now at a later state country X has become wealthier and they apply for approval, they get 20 years of patent. So even if the patent has expired in the US, they people in country X cannot get the cheap generics, because in their country the patent is still valid.

If you start reading up on what BigPharma is doing, it just makes you sick.

to post comments

Yes, fix the patent system, but also your argumentation :-)

Posted May 7, 2011 7:42 UTC (Sat) by spaetz (guest, #32870) [Link] (1 responses)

Not that I like Pharma very much or want to defend patents pretty much, but this argumentation is pretty bad:

> 1. Pretty much all Pharma companies have significantly higher marketing than R&D budgets (that's not evil, but still proves a point).

It's not evil, but I fail to see which point it proves. That pharma firms do a lot of marketing compared to R&D is related to patents how? The same is probably true for many other industries.

> 2. They are also one of the most profitable industries, so doesn't seem like they really need patents.

Their profitability "is a clear sign that patents work", would a proponent of patents claim. If there were none, they would be not profitable because copied, so no incentives to innovate, blabla. We don't know what would happen in such a case, so there is no point to make here without further justification.

> 3. They research is mainly on the "diseases" of the rich. For example the amount of money they invest into researching a cure for Malaria pales compared to the research into something like diet pills

Again, this is true but I fail to see how this is related with patents. Do you think, that pharma firms would suddenly all become very altruistic and start researching Malaria and other "fringe" (sorry) diseases when you abolish patents?

> 4. They have been the main companies behind the push to extend patentability, who do you think are the main industry who are pushing ACTA?

Yes, but what point does it make? That the (big) firms in the industry believe that patents work? How does it make patents bad? You'll need more arguments to support your logic.

> 5. They are also the companies who are the main drivers behind the US government pushing draconian trade agreements, onto developing nations. Which often leaves the poor in these countries without access to cheap generics.

This shows rather that pharma firms go ruthlessly after money wherever they can, not that patents are bad.

> 6. They are extensively abusing the patent system, by creating perpetual patents, i.e. when a patent expires they apply for a new patent where some compound is slightly changed, the trick is you can't make the old patented medicine, without violating the new patent.

Right, but companies abusing the patent system does not necessarily imply that patents are bad in general, merely that the system needs some loopholes fixed.

> 7. They have been caught multiple times paying for favourable publications/studies.

So has the tobacco industry, the wine industry, the coffee industry, and the candy industry. It is related to patents how?

> 8. Their patents actually only start after FDA approval, so they possibly get 20+x years of patent time.[...]

Well, those firms would tell you that they get to use the patented drug for 20 years on the market, and not longer. After all, if the FDA takes 20 years to approve a drug, the patent would have been worthless. So, I can see why that was implemented. The problem with other countries filing later (and therefore prolonging protection) would be solved by "global patents" by a patent proponent, I guess.

I am not saying you are wrong, but these arguments did not convince me.

Yes, fix the patent system, but also your argumentation :-)

Posted May 7, 2011 20:44 UTC (Sat) by njs (subscriber, #40338) [Link]

One can imagine a number of different ways for the public to fund drug development, and one of those is the current patent system. The idea is that by granting companies temporary monopolies which they can exploit to make money, the company's incentive to create profit will as a side-effect produce a public benefit (the availability of new drugs that save people's lives, etc.).

For this to be an effective/efficient solution, we want the drug company's incentives to line up *well* with the public good. But it isn't at all clear that they do. Some of the arguments being cited here are evidence that they don't.

For example: The massive marketing budgets are presumably paid for by increased profits from people buying the drug in question as a result of the marketing -- but those new sales are probably mostly from people who otherwise would have been happy with a generic, or nothing at all. So we could say oh well, sucks for the people who end up paying too much; they should have been smarter. But first, it strikes me as horribly immoral to expect every member of the public to be more educated about the state of the art in medical care than the professionals who are trying to fool them into spending too much. And secondly, since health care costs are spread out over everyone (by insurance premiums, by prices set on the assumption that assume some people won't pay, by public health coverage), those people who pay too much are hurting everyone. (Indeed, part of that marketing budget now goes to these clever rebate schemes for new drugs, whose whole purpose is to re-create the "moral hazard" that American insurance companies try to avoid by having higher co-pays on brand name drugs versus generics. The result is that my wife's *brand name* drugs are *cheaper* -- for us, out of pocket -- than generics would be. But the insurance company is still paying full price and getting screwed, which eventually comes out in everyone's premiums.) So here the patent-based develop-drugs-to-make-money system doesn't serve the public interest.

Basically the same thing is happening every time the drug companies do some profit-driven horrible thing (denying drug availability to dying poor people, declining to research important but less profitable conditions -- malaria was mentioned, and apparently in the UK the drug companies have just said eh, screw it, and fired all their neuroscience researchers, etc., etc.).

So while profit-driven free-market enterprise is a very efficient way to get certain things done, it's far from clear that it's actually the best way to develop drugs. Other systems -- like, say, taking the same amount of money from taxes and giving it to non-profit research institutions -- obviously would have their own problems, but not these ones, and these ones are pretty horrible.