More People Recognizing Patents Might Not Help In Healthcare
from the keep-on-thinking dept
Whenever a debate over the patent system comes up, inevitably, someone brings up the pharmaceutical industry as an example of where the patent system both works and is necessary. Without it, the refrain goes, no one would be willing to spend the billions of dollars on drug development needed to bring out vital drugs. So, it goes in theory, however. Reality doesn’t always match that. David Levine’s book Against Intellectual Monopoly has a great chapter (warning: pdf file) on why the argument for patents in the pharmaceutical industry isn’t nearly as strong as people make it out to be. It completely destroys the idea that without pharma patents there can be no pharmaceutical industry, by pointing to other countries that had no patent protection over pharmaceuticals until recently — but still had absolutely thriving pharma industries. In other words, patents aren’t needed for a pharmaceutical industry.
However, if the patent system does recognize pharmaceuticals, are those patents really beneficial? Again, Levine’s book hacks away at that notion, pointing out that, as with any government-granted monopoly, rather than creating real incentives for innovation, the patent system has created a situation where rent seeking occurs. The pharmaceutical companies recognize the huge bonus that is given to them in long-term monopoly protection, and seek to play certain games to protect it. That often means less actual innovation, and plenty of attempts to basically recreate what’s already been done and get monopoly protection on it. That leads to plenty of “me too” drugs that are just slightly different than what’s on the market, and plenty of minor modifications (Claritin to Clarinex) that are then patentable. If you’re a pharma company, this makes plenty of sense. The actual investment in discovery is low. The chances that it will make it through FDA-required testing is much higher, and the monopoly rents are there for the taking. Combined with the fact that pharmas are allowed to advertise directly to customers to create a notion of perceived (rather than real) benefit to the new versions of the drugs, and the end result is billions in money that could have gone towards research new and important ways to make us healthier (not necessarily involving drugs), that instead goes into seeking another artificial and unnecessary monopoly from which profits can be squeezed.
With all that as background, it was interesting to see a post on Slashdot this morning claiming that a new report from the GAO claims that patents are preventing the development of new drugs. The actual report (warning: pdf) isn’t quite as strong in its wording. Rather, it notes that there is a worrying trend in fewer new and innovative drugs being created, and also sees evidence that pharmaceutical companies are playing games to expand monopoly protections. It does note that many are concerned that patents are the cause of this, though it’s clear that there are many factors playing into it. The report isn’t conclusive about patents — but it is very good to see that the storyline that patents are necessary for the creation of new drugs is finally being met with some skepticism in high places.