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Report Says Patents Prevent New Drugs 381

An anonymous reader writes "Current orthodoxy claims patents encourage innovation, by allowing developers to enjoy profitable monopolies on their inventions which in turn inspire them to create new inventions. A new report by the non-partisan General Accounting Office suggests that this orthodoxy is wrong — at least when drug companies are involved. According to the report, existing patent law allows drug companies to patent, and make substantial profits off of, "new" drugs which differ little from existing medicines. Given high profit margins on very minor innovations, the report argues that drug companies have little incentive to produce innovative new drugs. In other words, current patent law actually discourages drug companies from producing new medicines. Responding to the report, Senator Dick Durbin (D-IL) released a strongly worded statement suggesting that a legislative response will be forthcoming. "The findings in this new GAO report," said Senator Durbin, "raise serious questions about the pharmaceutical industry claims that there is a connection between new drug development and the soaring price of drugs already on the market. Most troubling is the notion that pharmaceutical industry profits are coming at the expense of consumers in the form of higher prices and fewer new drugs.""
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Report Says Patents Prevent New Drugs

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  • More like: (Score:2, Interesting)

    by giorgiofr ( 887762 ) on Thursday December 21, 2006 @09:10AM (#17323862)
    Ridiculously overeaching regulation of this specific market kill innovation. With the kind of laws regulating this industry, you wouldn't even be able to research *aspirin* today, let alone have it approved or sold.
  • by gravos ( 912628 ) on Thursday December 21, 2006 @09:10AM (#17323864) Homepage
    Seems to me that the problems with drug patents are similar to the problems we see with software patents. The guys who are approving/disapproving the patents don't know anything about the field to which the patent applies, and so make poor judges of whether or not a new patent is sufficiently innovative to deserve approval.

    If you substantially increased the fee for patent applications then you could hire real experts to review new patents, and that might help solve some of these problems. Of course, many would claim that gave large companies with big coffers an unfair advantage compared to the little guy, and they would be right.

    What are some real solutions to this problem?
  • Something different? (Score:5, Interesting)

    by itlurksbeneath ( 952654 ) on Thursday December 21, 2006 @09:11AM (#17323872) Journal

    I realize that making drugs (or any other product, for that matter) requires research and testing, etc., and manufacturers need to recoup that money spent. Plus, profits from a block-buster drug go into funding expensive research on drugs that can only target a very small portion of the population. However, making tiny changes to an existing drug and calling it "new" sucks, unless the change actually has an effect on how the drug works or reduces a side-effect.

    Having said all that, maybe there should be a patent peer review board (or, in government speak, the PPRB) that reviews the validity of a patent request. Maybe patents should be harder to get and you should really have to prove your stuff is unique. After some of the vague, hand-waving tech patents, I've read, it's obvious that the guys in the government reviewing these things don't have a clue.

  • by Clowning ( 465722 ) on Thursday December 21, 2006 @09:39AM (#17324038)
    Here is one proposal that is quickly gaining much support. []
  • by Anonymous Coward on Thursday December 21, 2006 @09:42AM (#17324058)
    [url:]I beg to differ.[/url].

    As for the lack of vaccine development, consider the clinical trials. With a disease treatment, particularly for drugs treating life-threatening illnesses, you are testing your drug on people who are sick and will die without treatment. The risk and cost of harming a patient is much lower, and the results are much more easy to measure than with a vaccine, where you are administering it to HEALTHY people to prevent them from getting sick. As a doctor in a country (the US) that is so malpractice lawsuit happy, would you want to participate in a vaccine clinical trial or an anti-cancer treatment clinical trial?

    In other words, it's not the patents, but rather the litigation that discourages vaccine development.

  • by mcwop ( 31034 ) on Thursday December 21, 2006 @09:57AM (#17324182) Homepage
    I for one am super thankful for me-too drugs. I have been through 4 iterations of basically the "same" drug for my condition. The first one caused a lot of awful side effects, and stopped working for me after awhile. The next few variations of the same thing (5-aminosalicyclic acid (5-ASA) were more effective and had no side effects. I was diagnosed with my condition about 14 years ago, and these little innovations have made all the difference.
  • The organization Doctors Without Borders [] experience first hand the effects of the patent system in third world countries.

    For example, in a recent press release [] they write:

    The case of AIDS illustrates the trend. While fierce generic competition has helped prices for first-line AIDS drug regimen to fall by 99% from $10,000 to roughly $130 per patient per year since 2000, prices for second-line drugs - which patients need as resistance develops naturally - remain high due to increased patent barriers in key generics producing countries like India.
    By allowing the pharmaceutical companies to keep their prices artificially high, the patent system kills people every day, particularly in third world countries. And it's completely unnecessary.

    The standard argument for allowing the pharma companies to charge whatever they want for patented drugs, is that they spend the excess revenues on research for new drugs. But that is not true.

    We can look at the numbers for Novartis [], Pfizer [] or AstraZeneca [].

    They all spend around 15% of their revenues on research. The number is typical for the industry. The other 85% go to other things, according to their own figures. More than half their revenues are spent on marketing an profits.

    So there are clearly better ways to finance drug research than to hand out patent monopolies to the big pharma companies, and hope that they will spend the money they make on research. Because clearly, they don't.

    The Swedish Pirate Party has one proposal for an alternative system []. Many others have suggested other alternatives.

    But at least it is time for us to start discussing the problem in earnest. Today's situation is expensive, wasteful and completely immoral. There must be a better way.

  • by Petronius.Scribe ( 1020097 ) on Thursday December 21, 2006 @10:03AM (#17324260) Homepage
    That's a fair question. I'd define a patent as a limited term of exclusive rights to a novel invention in return for publishing the details. The point where I think the current system breaks down is the "novel" part, and to a lesser extent the "details" part. As for controlling the number, I disagree - there's no number of patents which is too many, provided that they expire. If there's not enough freedom for competitors to operate because minor modifications are making it through the patent system, that's a separate issue and not a result of "too many patents".
  • Re:Exaggeration (Score:5, Interesting)

    by AdamKG ( 1004604 ) < minus pi> on Thursday December 21, 2006 @10:03AM (#17324262) Homepage
    "Current orthodoxy claims patents encourage innovation, by allowing developers to enjoy profitable monopolies on their inventions which in turn inspire them to create new inventions" - this is still true.
    Whether it is true or not misses the point. The question is not whether patents make Pharma stocks comfortable investments- that is never what a patent should be based on. Rather, the Government should only grant patents when they - as the constitution explicitly says- promote progress. The question we need to be asking, then, is "would a lack of patents lead to pharmaceutical companies investing less in research, or would it spur them to invest even more, so they could stay a step ahead of the competition without the 15-20 year lead of patents?" I don't see nearly enough people asking that question.

    Without patents, patent-heavy fields like pharmaceutical research fall into cutthroat, razor-thin-margin price wars - but that is not a bad thing. In fact, it's not too different than desktop computers, where we've seen manufacturers keep up with Moore's law for a remarkable amount of time, even while having to struggle to break even on almost every product. Again, patents do not exist to provide peace of mind to investors; they exist only to promote progress. If ending them, and forcing pharmaceuticals to (*gasp*) innovate to stay in business (and even having a few go out of business when they fail to!) is the best way to promote progress, than that is exactly what we should do.

    Of course, All of that only makes sense if Congress is competent and not corrupt... so much for that then.
  • Socialise it then (Score:1, Interesting)

    by Anonymous Coward on Thursday December 21, 2006 @10:08AM (#17324300)
    Having to become somewhat familliar with the ins and outs of many kinds of medications- their are many many problems with medical standards and practices. What's bothersome is more basic: Currently America is one of only a handfull of counteries that has "private" medical-ie medical that isn't socialised such that costs from the doctors and patients comes from taxes. Few companies have any sort of insentive to release patents any sooner than absolutely legally required, and even then fight it tooth and nail. I pine very heavly for the days when medicaition costs are in part part of ourtaxes, yeah having higher taxes will suck , on the other hand it will probably suck about as much as spending around 400 yearly for medication-but at least mabie then I also won't be also spending 100 per a session to see my cute chinese medical doctor
  • by Anonymous Coward on Thursday December 21, 2006 @10:11AM (#17324326)
    I work for one of those major (top 3) drug companies. It always irritates me when people like you make comments about subjects you know nothing about. I tell you what is not fair... 1) Our company spends a BILLION dollars developing a new drug and jumping through all the regulatory hoops required of us. 2) Years are spent doing extensive testing of the product to get FDA approval. 3) The drug significantly reduces the chance of DEATH for those taking it. 4) We get sued for a $300 Million dollars when a small group of people have an adverse reaction and die (as they probably would have anyway). That my friend is why DRUGS ARE EXPENSIVE! At any minute we could get tagged for a lawsuit for BILLIONS in damages when we have done everything required of us by the FDA and a dozen other regulatory agencies. You want to reduce the cost of drugs? Protect drug companies from lawsuits on FDA APPROVED drugs.
  • by Black Parrot ( 19622 ) on Thursday December 21, 2006 @10:11AM (#17324334)
    > One example is Claritin vs. Clarinex. (Both are anti-histamines that don't cause drowsiness in most people). Claritin was a cash cow for Schering-Plough whose patent expired a few years ago. It used to be prescription-only and the cost used was around $1 a pill. Now you can buy 300-ct bottles over-the-counter at CostCo for ~ $10.00.

    > Enter Clarinex, which Schering claims is certified for both indoor and outdoor allergies. Once again, it's a prescription-only medication with high prices. The punch line: Clarinex is exactly the same drug as Claritin after Claritin passes through your liver once.

    And even if Clarinex were better, they'd have no reason to release it until the Claritin patent expired. In fact, they'd have good reason not to release it.
  • by westlake ( 615356 ) on Thursday December 21, 2006 @11:22AM (#17325040)
    At least snake oil, though useless, didn't kill people.

    quacks kill.

    the arsenic wafer said to relieve "female discomforts."

    and sometimes fed, one suspects, to the male who was responsible for same.

    the typical patent drug of the 1890s was a potent mix of alcohol and opium. given in stiff doses to both infants and elders.

  • Re:Exaggeration (Score:3, Interesting)

    by Michael_K_Vegfruit ( 845316 ) on Thursday December 21, 2006 @11:55AM (#17325408)
    The split between the private sector profit motive and directed research into cures doesn't need to be as drastic as you've suggested. One approach that shows promise is for governments - or NGOs - to offer 'pull funding', similar to the X-Prize scheme. The state, or whoever, says "here's a big pile of money, we'll give it to anyone who can come up with a cure for AIDS/H5N1/toe gunk and give us the patent". That way, you get all the benefits of a free market - anyone can compete to come up with a solution - combined with an element of directed, central, planning.
  • Re:Exaggeration (Score:2, Interesting)

    by fain0v ( 257098 ) on Thursday December 21, 2006 @12:29PM (#17325802)
    You speak like one of the many homeopathic nutjobs I talk to all too often. Having worked in drug development in industry and now indirectly in academia, I wish people like yourself would learn how difficult treating diseases let alone curing them can be.

    How do you "cure" aging?!? You can only treat it. I don't want to defend the industry because I know profit is the main motivator for the decision makers, but even in academia, the drug development process is the same and so are the goals. The only difference is that we can work on diseases like yellow fever and rare childhood leukemias that drug companies care very little about. /end rant
  • Re:Dental care? (Score:3, Interesting)

    by TheRaven64 ( 641858 ) on Thursday December 21, 2006 @12:31PM (#17325840) Journal

    Then why are teeth different? It's common for United States residents to have their teeth cleaned by a professional hygienist and looked at by a dentist (doctor of dental surgery) twice per year.
    I've seen this answered before in the context of British people. The US stereotype says that British people have bad teeth, while a British person is unlikely to notice. This is because in the UK, anyone can go and see a dentist and get free care[1]. This means that having your teeth poked is just another inconvenience. In the USA, however, it is a status symbol. Being able to get your teeth cleaned and repaired professionally is only an option for the wealthy or those with good jobs which come with a dental plan ('does it have dental?' seems to be a common question Americans ask when deciding whether to take a job). Because your teeth are visible to the world, it is obvious to an observer if you have not had them taken care of properly and so it becomes a highly visible indicator of socio-economic status. Illness, however, does not have the same social stigma attached to it. In Japan, illness even has a positive image in some situations; turning up to work in Japan and sniffing loudly is considered a sign of dedication since you are working in spite of being ill.

    [1] In theory, at least. In recent years it has become progressively harder to find NHS dentists.
    Disclaimer: IANAS(ociologist)

  • Re:I disagree (Score:5, Interesting)

    by TheRaven64 ( 641858 ) on Thursday December 21, 2006 @12:37PM (#17325904) Journal

    Here in Wales, we have something called the Technium Project. The idea is to have a set of buildings each dedicated to a particular technological field. They are filled with business incubator units (which are expensive, but quite easy to get subsidy for). The idea is that putting all of these businesses close to each other leads to sharing of ideas.

    One of the buildings in the project is called the BioTechnium, and is intended for biotech start-ups. Since the building came online, only one person has been employed in it; the building manager. In spite of the fact that it was designed with biotech in mind (decontamination and isolation facilities, etc), there is not a single biotech start-up moving in. Why not? Because no one will fund a biotech company that doesn't have a large patent portfolio. You can't get into the industry without a cross-licensing agreement with all of the major players, and you can't get that without a load of your own patents to offer. The result? A barrier to entry so high no one can get over it.

  • Re:Polio and HIV (Score:4, Interesting)

    by DECS ( 891519 ) on Thursday December 21, 2006 @03:30PM (#17328134) Homepage Journal
    Doctors & researchers were racing to find a cure for polio for the prominence of "discovering the cure." It has been postulated that the rush to find a cure for polio resulted in careless mixing of blood between test animals that brought the simian form of HIV to humans.

    The same interest in curing HIV exists today, its just a harder problem to solve.

    It's also easy to blame big evil drug companies for providing treatments rather than cures, but what about the big evil HMOs, who want to minimize costs? Certainly Kaiser Perminente and other HMOs are interested in cheap prevention measures, rather than expensive ongoing treatments.

    Another issue preventing drug use is the lack of any mechanism similar to patent protection to induce finding new uses for existing drugs.

    Consider Welbutrin: it was found to work better than other anti-depressants for many people, but after a media panic stunt that associated the drug with seizures, doctors were afraid to prescribe it. It was later found that the drug was also effective in helping people stop smoking. The Welbutrin name was tainted that its company rebadged it under a different name: Zyban. It was then proven that Welbutrin had no real danger for most people, and the seizure side effects associated with it only really affected people who already had seizure problems, and even then had less risk than alternative treatments.

    Then Welbutrin (busparin) went generic and the profit motive for finding and proving new uses for the drug ended. Sales went to generics manufacturers.

    Meanwhile, studies where already showing that welbutrin worked for many people as an aphrodisiac and could help them rebound from problems involving low libido, among other things. Unfortunately, not only was such a drug considered too racy (this was before Viagra), but since the drug maker would have to spend millions in clinical trials proving its efficacy, it made no sense to do so because there was little patent protection still available on the drug.

    How many other drugs have known uses, but can't be formally proven because the costs are prohibitive? It's obvious that patent protection DOES create a strong profit motive for finding new uses for new drugs, but it does nothing for drugs we already have and know a lot about - drugs we know are fairly safe, and which have promising new uses.

    A non-patent system, where new drugs are discovered and new uses are developed by non-profit 'open source' volunteers wouldn't have the money to do extensive formal clinical trials, which take years and can deliver huge disappointments. How far would Linux or any other FOSS project go in a software world where every program had to prove itself flawless over a long and expensive qualification testing period? Software is wholly unregulated, and anyone can dump out junk and sell it. Drugs aren't like that at all.

    The only system that works at all is the huge profit potentials offered by patents, and it has serious shortcomings. As long as the FDA restricts new developments very conservatively, and as long as people can sue drug companies and win huge damages for any risk involved in taking a drug, we simply won't have full access to the drugs we already have.

    Apple's Billion Dollar Patent Bluster []
  • Re:Exaggeration (Score:3, Interesting)

    by RexRhino ( 769423 ) on Thursday December 21, 2006 @04:32PM (#17329140)
    So, the solution to the problem is to create a non-transparent process, run by a small elite, under the idea that being not directly democraticly accountable to the people would make them better decision makers?

    Just because old Al Greenspan was a benevolent dictator with the Fed, doesn't mean that unacountable insulated oversight boards are inherently better than a transparent democratic process. It just means that we were damn lucky to have had someone like Greenspan all those years.

    Any system that relies on having an extremly talented and knowledgeable elite at its head is a flawed system - it is a non solution. Once again it is an "appeal to god" (or other divinity)... There is nothing inherent in the structure or the form of the system you are talking about that would make it a better system - you just envision having some great genius or geniuses at it's head that will make things work well. Well, ANYTHING can work well if you have benevolent genius dictators running them - but that isn't something you can garantee. You must evaluate a system assuming a corupt and selfish idiot is going to be in charge. A good system should be able to function well, even with corrupt selfish idiots running it.

"Never give in. Never give in. Never. Never. Never." -- Winston Churchill