Merck And Elsevier Exposed For Creating Fake Peer Review Journal

Thu, Dec 4th 2008 12:55pm

Filed Under:
competition, eu, patents, pharmaceuticals

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EU Catches On: Drug Companies Abuse Patent System To Block Competition

from the well,-duh dept

I'm long overdue on some promised posts concerning the patent system and the harm it does for the healthcare field, but it's going to have to wait a little while longer. In the meantime, it's good to see that more people (including those in a position to do something about it) are noticing this as well. While we often feel that the EU goes overboard in declaring monopolies or anti-competitive behavior, it's finally realizing the one area where monopolies really do tend to be a problem: patents. The European Commission has released a report detailing how pharmaceutical companies regularly abuse the patent process for anti-competitive purposes, rather than to promote and ensure progress. It's unlikely that much will come of this now, but it's good to see people starting to recognize that the patent system can often be more of a problem than a solution.

Legal Issues

Fri, Aug 8th 2008 12:38am

Filed Under:
economics, gridlock, michael heller, patents, pharmaceuticals

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Patent Gridlock Harming The Ability To Create Lifesaving Cures

from the patents-costing-lives dept

I've gotten way behind on my series of posts on intellectual property. I plan to pick it up again shortly. There's a big post I've been working on that I just haven't had the time to complete. However, one of the upcoming posts in the series is going to focus in on the question of pharmaceutical patents. While some claim that the pharma industry is an example where patents actually work effectively, there's plenty of evidence to suggest otherwise. I'll try to highlight much of that evidence, but it looks like Michael Heller is doing some of that already. Heller, the author of The Gridlock Economy, which we recently mentioned has penned a piece for Forbes, where he points out how the rise of patents in the pharma and biotech world is not leading to new cures. In fact, it's actively stifling them, by making it nearly impossible for certain types of research to be done. This is a point Nobel Prize winning economist Joseph Stiglitz has also been making for years.

Of course, some will point to some recent medical breakthroughs as evidence to the contrary, but as a New Yorker review of Heller's book points out, it's often much harder to see "foregone opportunities." But, the more you understand the economics of innovation and growth, the more you see how clearly pharma and biotech patents are stifling lifesaving advancements -- and that's not just a huge shame, it's incredibly destructive to human health, dignity and the wider economy.

Say That Again

Wed, Apr 23rd 2008 10:48am

Filed Under:
bill gates, open source, pharmaceuticals

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Bill Gates Claims Open Source Means Nobody Can Improve Software

from the say-what-now? dept

Wired is running an interesting article about Bill Gates' thoughts on the pharmaceutical industry, which he's increasingly focused on as he transitions out of Microsoft and into his foundation. He clearly understands the basic problem, though I think he has the wrong solution in brushing off the idea that "open sourcing" medicine is a huge opportunity. As for why... well, I'll be discussing that in a future post. Instead, for this post, I wanted to focus on a rather bizarre statement out of Gates (all the way at the end of the article) in discussing why he dislikes open source software. His complaint is that open source creates a license "so that nobody can ever improve the software." It's hard to figure out how to respond to that statement since it's the exact opposite of how open source software works. The exact point is that anyone can improve the software. It's proprietary software like Microsoft's that's limited such that only Microsoft is allowed to improve it. It's no secret that Gates isn't a fan of open source software, but it still seems odd that he would make a statement that is so obviously false, both in theory and in practice. Perhaps old FUD habits die hard, but one would hope that as he enters "retirement" he'll have a more open mind on such things.

Predictions

Wed, Oct 31st 2007 12:58pm

Filed Under:
business models, patents, pharmaceuticals

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Pharmaceutical Firms Finally Realizing They Need To Innovate Beyond Pills

from the squeezed-those-monopolies-dry dept

Last week we wrote about a proposed bill that would push pharmaceutical firms to turn their patents over to the public domain in exchange for prizes. As we noted in the post (and the ensuing discussion), there are some serious problems with the way the current patent system sets up incentives for the healthcare industry. It really focuses research dollars into pharmaceuticals, rather than other types of technology that would not only be cheaper to make and to use, but also much more effective in helping and saving lives. It's a fascinating area that I've been researching for a separate project, trying to help design better business models for the healthcare industry that will still allow for massive profits, but do so in a way that creates better incentives for actually keeping people healthy. There's been some interesting research in this area, and I plan to share some of my own results when they're ready (hopefully early next year).

The key, as always, is to recognize the real market that the business is in. For too long, pharmaceutical firms have believed they're in the pill making business -- rather than the "saving lives" business (even if they use the "saving lives" claim to get an emotional response when trying to push for legislation in their favor). The good news, though, is that it appears that some pharma firms are finally recognizing this. As Against Monopoly points out, the Economist notes that pharmaceutical firms are finally starting to experiment with new business models that go "beyond the pill." They're changing how they market and sell pills as well as starting to look into other areas of healthcare as well, from biotech to medical devices. The other interesting thing is that they're starting to look at interesting ways to drastically reduce the costs and time of clinical trials using technology. While this won't change their reliance on patents, it is a step in the right direction. With that diversification underway, it will hopefully be easier to show them additional new business models that can help them become more innovative, creating new opportunities to profit, without having to rely on artificial scarcity.

Surprises

Fri, Oct 26th 2007 6:14pm

Filed Under:
congress, patents, pharmaceuticals, prizes

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Bill Proposed To Make All Pharma Patents Public Domain

from the well,-that-would-shake-things-up... dept

We've written a lot about pharmaceutical patents, since pharma is often area that's a sticking point for fans of the patent system. There are a number of reasons why patents in the pharmaceutical industry don't make sense, despite protests from many. Studies have shown that patents are actually holding back the development of new drugs, making research more difficult and skewing research efforts away from what's most important for helping keep people healthy, to what's patentable. Nobel Prize winning economist, Joseph Stiglitz, for years has been talking about how patents harm medical innovations. One of his proposed solutions is to set up a bounty system for important cures -- and it appears that at least someone in Congress thinks this is a decent idea. Against Monopoly points us to the news that Senator Bernie Sanders has proposed a law in Congress that would set aside $80 billion a year to give to pharmaceutical companies in exchange for putting their patents in the public domain, in order to create competition for developing the drugs.

First of all, there's almost no chance that this proposed bill goes anywhere, so any discussion over the pros and cons isn't likely to make much of a difference. There are some interesting ideas set forth by the bill, but in the long run, it's not a very good idea and would likely fail for a number of easily predicted reasons. What I do like about it is the idea of encouraging competition within the drug space, so that the pills may be more affordable to a wider audience. Competition tends to be a good thing, and it can also create more incentives for real innovation.

Unfortunately, just about everything else about this bill would likely cause problems. It's not entirely clear how this bill gets funded. $80 billion is pretty significant chunk of change. If the plan actually worked, and created new, more affordable drugs that saved many more lives, you could make a compelling argument that the net benefit to the economy would far outweigh the $80 billion (see Murphy and Topel's research for support on that). However, it's still not going to be easy to get people to buy into it. More importantly, it's not entirely clear how you'd allocate this money fairly. Any system like this where the gov't is giving away money is going to be gamed by the pharma companies in one way or another. It'll be so lucrative that it will be nearly impossible not to have the system gamed -- especially when it's going to involve a bunch of bureaucrats trying to determine the value of a specific drug. Finally, the bill seems to be entirely focused on pharmaceuticals -- which is part of the problem today. With so much healthcare policy focused on pharma, people forget that new technologies may start to make pharmaceuticals obsolete. Then we're left with an $80 billion subsidy for an industry that should be going away. I'm all for the economic incentives that come from innovation prizes, but building a huge mis-targeted gov't bureaucracy around them seems risky. Really, it seems to just be replacing one system of gov't subsidies with a different one, and that hardly seems likely to fix the problems currently facing the healthcare space.

Legal Issues

Tue, Aug 7th 2007 6:34pm

Filed Under:
patents, pharmaceuticals

Companies:
novartis