Biologic Drugs Likely To Get Separate 12-Year Monopoly Protection Beyond Patents

from the and-for-that,-we-all-suffer dept

A few weeks ago, we noted that some biotech firms were pushing hard to get a separate monopoly on biologic drugs, that went beyond patent protection, as if that wasn’t enough. While we had some thoughtful comments from some industry insiders, claiming that the issue could be more about liability. If that’s the case, then deal with the liability question, not the monopoly protections. Either way, Robert McClelland alerts us to the unfortunate news that our elected officials have caved in to what the big pharma companies wanted and agreed to a new plan that would give a twelve-year monopoly on these sorts of “biosimilars.” It’s still not clear why this is needed at all, other than to wipe out competition and make drugs much more expensive. The two congressional reps who pushed this through were Representatives Anna Eshoo and Joe Barton. This is no surprise from Barton, but Eshoo, who represents part of Silicon Valley should know better than to be increasing monopoly protections.

Oh wait… a quick look over at shows that (take a guess…) the single largest contributor to Eshoo’s election campaigns has been (yup) pharmaceutical companies. Oh, and they’ve already been the largest contributors to her 2010 re-election campaign. And people wonder why Larry Lessig’s Change Congress movement is getting attention. Even if she’s being totally sincere in her position, how else can you look on this without saying it smacks of corruption with bought-and-paid-for legislation that gives pharma companies an extra monopoly to gain significant monopoly rents at the expense of the public?

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Comments on “Biologic Drugs Likely To Get Separate 12-Year Monopoly Protection Beyond Patents”

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yozoo says:

Welcome to Washington

” caved in to what the big pharma companies wanted”

Silicon Valley people really seem to have some strange block when it comes to American Politics (its like you guys believe all that 10th grade civics garbage?). No one “caved in” here, these guys represented their constituents (those who get them elected by donating money) to the best of their ability.

Anonymous Coward says:

Re: Welcome to Washington

No one “caved in” here, these guys represented their constituents (those who get them elected by donating money) to the best of their ability.

Exactly. This is just capitalism at it’s finest at work in government. Of course the capitalist hating socialists aren’t going to like it. Well, cry me a river.

Reed (profile) says:

Re: Re: Welcome to Washington

“Of course the capitalist hating socialists”

Socialism is a form of government policy and capitalism is a form of economics policy. Neither are necessarily inclusive or exclusive of each other.

Capitalism at work in the government has been referred as fascism by many and rightly so considering money concentration in corporations lets them influence government bodies and results in their interests being served over the majority of people.

Of course nothing is this black and white and we are a mix of many different governmental philosophies. I know this is probably a big stretch for your brain, but one only has to look at how our government is run to realize we are not a strict republic, democracy, or even a socialist society.

Mike has pointed out, like many before him, that we are not even a strictly capitalistic either as we grant thing like government enforced monopolies that smack the face of the supposed “free” market.

A good question here is do we want those with the most money to have the most influence in our government? This is dangerous because a minority can get unfair representation as it is extremely hard to band together enough well intentioned Americans to lobby for change.

The hard facts in my research point to the US paying more than average and getting progressively worse health care as spending increases. The system is broken and no half-assed reform will change anything.

I fear that this debate will be continue to rely on outright lies and disinformation as things heat up. The most silly part of this is the rest of civilized world has figured this out. We stand alone, trying to find a happy median between filling people’s pockets with money and giving good health care to all our citizens.

I would suggest there is no happy median for the working class. We needed nationalized health care decades ago and we are suffering to this day because of a minority of organizations that have the money to keep the status quo going despite seeing the results.

They have the money to spin the truth and are backed by many Americans beliefs that we have it the best in this country. This is just not supported by the facts, which I have noticed not a single person who is against reform citing. The facts speak for themselves and the best way to deal with them is simply to ignore them I guess.

I am a college graduate and I make a decent living, but I cannot afford to spend a third of my salary to insure my family. It is pathetic that I choose between paying bills, putting food and the table, and medical insurance. It is a choice that no American should have to make, but yet the majority of my peers are in the same boat.

kirillian (profile) says:

Perhaps the AARP?

Maybe if someone pushed the AARP to do something, this could be overturned…as one of the single largest lobbying organizations, the AARP holds pretty big sway…

I’m thinking about all of those old people who come into the pharmacy and are pissed off because their insurance company denied their claims (yet again…) and Wal-Mart can’t carry generics anymore because of this increase to the patent period.

Sometimes, I wonder if these idiots were just born this stupid?!?!

YouAreWrong says:

Re: Perhaps the AARP?

actually, the AARP is in favor of the version of this bill that granted 7 years of protection (google aarp biosimilars)

it’s just that mike is incredibly misleading and/or doesn’t have a clue what he’s talking about (see my post below).

Josh - To common a name. This is me. (profile) says:

Re: Re:

Actually it’s not that “sweet”. My Grandmother is on Medicare and they are in a worse place perscription wise than people on different types of insurance. They keep taking money away from the plan and raising the cost that the seniors have to pay. For people on a fixed income, retirment payments or othewise, this is very bad news. This means that they now have to spend more of their money on medicine and docter visits than the month before. Meaning they have even less money to spend on things like food, transportation, and neccessities.

So yes, those over the age of 65, and those that help care for them, do care.

YouAreWrong says:

mike = clueless

hey genius… it only got approved by a house panel… which is basically the same thing that’s happened every year since at least 2005.

and you really have no idea what you’re talking about with the bill. pharma researches a drug, files the patent, starts trials, and 8-10 years later, they get FDA approval and their patent has been wasting away… now the drug can get on the market, and the patent expires 10ish years later. you’re spouting bullshit like they’re going to get another 12 years under this biologics bill on the same drug on top of the patent. there’s no way something that’s been around ~20 years is going to magically become protectable. as soon as you gather the requisite testing data, you would be able to petition for protection through a non-PTO agency. the issue the bill is trying to fix is that biologics are incredibly beneficial and still cost upwards of a billion to research… yet they’ll often not meet standards for patentability because they’re almost all technically “obvious” (any biochem grad student can write out all the permutations). but they have no way of knowing which ones actually work without doing the [incredibly expensive] trials. and since the finished/compiled data will be available 8-10 years after the patent has been filed, there’s only going to be 10-12ish years left on the patent anyways. so even if they did file as soon as they got the data, the time would usually coincide with the patent expiration. the whole point of the bill is to increase the probability of ROI on something that’s often not technically patentable and costs more money to develop than you’ll ever manage in your life. once again, you really have no idea what you’re talking about.

Enrico Suarve says:

Re: mike = clueless

OK so how have Pharmas managed to scratch a living so far? The way you tell it, it sounds like they would barely be able to manage to develop any drugs and should be begging for dimes, since all their charitable work developing costly drugs gets them nowhere as they only have them ripped off and see no profits

Except they seem to be doing quite well – a 380 billion dollar market last time I looked and a decent share of the global market


Anonymous Coward says:

Re: mike = clueless

I think I get an idea of what you are saying. However could you reply with a couple quick bullet points.

For instance…
time when patent is filed with old methods
time when product hits market
How much time the old products have patented

THEN rinse and repeat for the biologic drugs. It could just be me, but I’m fairly certain but the wall of text is a little off putting along with the hate filled title that will make most tech dirters move on.

This will allow us to clearly move forward to discuss ROI and reasonable profits.

YouAreWrong says:

Re: Re: mike = clueless

the way the current (moronic) drug cycle works is that the pharma starts initial research and files a handful of patents.
* patents will start being granted in 3-5 years.
* the drug will undergo further research and clinicals and will get FDA approval 8-10 years later.
* the failures get thrown out and the FDA allows the drug that actually worked to enter the market… but only 10-12 years are left on the patent.

some side effects:
* overpatenting is huge. you have to file multiple claims/patents on variations that tend to work in a specific manner, but not to a level tolerated by the FDA. a ton of money is wasted on lawyers fees (it costs $8-20k for a patent attorney… these guys charge so much because they go through engineering and then law school, and in pharma, you need at least a masters; most have a PhD).
* clinicals are rushed. the clock starts years before trials are finished, and even 6 months during the patent term is huge ROI lost (which subsidizes the failed clinicals). the most obvious result of rushed clinicals is more error (human and statistical).
* certain classes of drugs are always going to fail the obviousness standard because any pharma geek can write out all the permutations and tell you generally what the class of drugs will do, but he won’t know what is good enough to be approved by the FDA. congress can’t just edit the patent act for pharma inventions because that would be a violation of TRIPs.

with this new system
* clinicals are still rushed because you have to beat your competitors, but you can take your time as long as you’re ahead of your competitor. the result is slightly better data.
* less wasted money on patent attorneys, because you can’t file until your data is in, and now you’re only filing on things you know actually work.
* the standard of eligibility for getting protection is different. you need the actual clinical data, but you can get protection on things that are legally “obvious”. since most of the drugs in the biologics class are technically obvious, and the expensive part is the actual research, there’s substantially less incentive for anyone to develop them. if i tell you that the cost to get this product to market is going to be a billion dollars, and you have nothing that prevents a competitor from manufacturing and selling the exact same thing, you’re not going to spend that money on R&D.
* protection is granted sui generis (specific IP rights typically granted under the commerce clause instead of the IP clause) instead of through the patent act, so it’s not seen as a violation of TRIPs.

overall, the end date of protection works out to be just about the same as it is currently with patents.

Joe (profile) says:

Re: mike = clueless

You are clueless. I’ve worked on marketing for biologic pharmaceuticals. One has been on the market for the last 10 years, and still has a patent extending to 2017, that is just shy of 20 years of exclusivity for their drug before a generic can kick off.

Trust me with what they charge they have more than made their money back as well as paid for all the errors they made in the trial stages. Right now they could release a generic and overall that drug and all failed trials would still prove profitable…very profitable.

YouAreWrong says:

Re: Re: mike = clueless

what drug is this “one”… because it’s certainly not the norm…

The average time for the FDA to approve new drugs declined to 1.1 years in the 2005-07 period, but longer average clinical phase time means combined clinical and approval time continues to hover around eight years, according to Tufts CSDD.

Anonymous Coward says:

Drug patents are just BS. I have high blood pressure and I’m currently unemployed without health insurance. The only pills I have found that worked for me without side effects (Azor) are patented until 2016 by a Japanese pharm company. So no generics until after 2016 and they currently cost almost $500 for 30 pills. Fortunately I have a good cardio doctor that gives me free samples every month otherwise I would just have to not take them.

Ryan says:

Re: Drug Patents

You say these companies should not be issued monopolistic patents, then you say they need to be under strict control to avoid gouging. The latter is pointless(and harmful) if the government doesn’t grant them extended monopolies.

So no, they shouldn’t be under any control, but they don’t need to be controlled if we limit their IP rights. Of course, this is the complete opposite of what politicians enjoy doing, which is to reward lobbying by granting ever more stringent patents/copyrights and then embrace populism by ranting against those very companies when their asinine laws predictably lead to problems.

Reed (profile) says:

Profits before people

The interesting thing to consider about biological drugs, particularly the ones produced from Pharm Animals (Pharmaceutical Animals) is that they cost much less to develop and once developed they cost next to nothing to produce.

These drugs could finally save possibly billions of people at prices even the third world can afford.

All the more reason to create new monopolies so we can once again put the profits of an extreme minority (who took the research and ideas of culture around them) and put the before the people at large.

We wonder why health care is so expensive, it really is a factor of allowing profits to go unchecked and putting a handful of people’s interests above the world populations needs.

Bradley Stewart (profile) says:

Maybe Big Pharma Should Work On a Treatment For

Tin Ear. Its clear to me its the leading malady among Drug Company Executives and many of our elected Legislators. Hey folks since you don’t get what we are trying to do it is bring down the cost of medical care not raise all the prices. I know how badly that you all want vanity licence plates that read. IF I CAN’T TAKE IT WITH ME I’M NOT GOING. Let me give you a flash. Your all going and you can’t take it with you. How about giving us a break. Especially since the American Taxpayer pays for a hell of a lot of the research that you do and give you generous tax breaks for all your annoying advertising. Oh and just one more thing. Pay the highest prices in the Universe for what you produce if we can afford it.

Ryan says:

Re: Re:

They support everything but the public option because the proposals generally limit consumer choice by mandating insurance to cover whatever the government decides upon(which of course will become influenced by politically advantageous groups and the health care special interest groups themselves to make us pay for stuff we don’t need) and will lead to greater inefficiencies in the system, meaning the companies get larger profit margins. The public option is no better because it will ultimately lead to a complete government takeover of insurance, which is why these companies don’t like it. That, of course, leads to even larger inefficiencies, forced rationing, and an overall greater burden on society.

Yet, for some reason many of us want this proposal to go through. Apparently there are no alternative possibilities for reform–people just look at Canada or somewhere and say, “Hey, I wouldn’t have to pay for services at the point-of-care! Awesome!” and ignore the many hidden costs, bad incentives, and loss of individual discretion that it entails. One of the ways that we could actually reduce costs and increase competition would be to reduce the extent of monopolies established pharmaceutical companies are granted, which is precisely the opposite of what this proposal does. Truly astonishing…

Thornintheside (profile) says:

Business as usual with politicians

Isn’t this how the American political system works? Big firms hire lobbyists and these lobbyists attempt to manipulate laws through whatever means posslble. Typically this would involve large sums of money being donated to politicians to further their political careers. Said politicians then get directions from their puppet masters who fund them, and pass laws that are sympathetic to their interests. Then use pork barrel spending and “wink wink” deals to get these laws passed. Isn’t this how it works?

Anonymous Coward says:

There would be no biologic drugs without lots of investment and research provided by pharmaceutical companies. Patents often expire before a company is ready to commercialize and bring a product to market. The issue is fairness and incentive to invest in new products. After all we do live in a capitalistic society where innovation and inventive creativity is valued. People are human beings, incentives matter….

Mike Masnick (profile) says:

Re: Re:

There would be no biologic drugs without lots of investment and research provided by pharmaceutical companies.

Perhaps. I can see arguments going the other way as well, but let’s grant your premise.

Patents often expire before a company is ready to commercialize and bring a product to market.

I’ve yet to see a drug where that has happened, though I don’t follow the space as closely as some others. Can you point me to a drug whose patent has expired before commercialization was possible?

The issue is fairness and incentive to invest in new products. After all we do live in a capitalistic society where innovation and inventive creativity is valued. People are human beings, incentives matter….

A capitalist free market doesn’t include gov’t granted monopolies. You are correct that incentives matter. No one has said otherwise. But pretty much all of economic history has shown that artificial gov’t granted monopolies in markets actually hurt incentives, limit competition and innovation and slow down progress.

You are correct that incentives matter, but you seem to be saying that monopolies are the incentive. They’re not. Selling a product to the market is the incentive, and that exists even without excess monopoly protection.

Lawrence D'Oliveiro says:

Re: Biologics

There would be no biologic drugs without lots of investment and research provided by pharmaceutical companies.

No private company invented biologics. They are the outcome of Government-funded research. Should perhaps the whole idea of biologics be patented, and every company that comes up with a biologic drug be forced to pay a licence fee to all of us, the taxpayers who paid for that research? That’s the logical consequence of what you’re advocating.

CrushU says:


Ok, let’s assume for a minute I buy the claims that we need a monopoly for these drugs so that people will actually research and develop them… (I’m not convinced, but it’s irrelevant to my point)

So, they need to have a patent/protection to keep someone else from selling their drug. I can easily believe that given the acceptance of the first argument.

What I fail to be convinced on, is why it needs to be Twelve Years. Any drug that is twelve years old and still selling won’t lose its market anyway. (Viagra isn’t likely to lose its market to competitors, simply because of brand name recognition.) I would think that five years should be enough. (Though the previously-AARP-mentioned seven years would be alright, too.) If you can’t manage to get market after five years, you won’t ever. And I do mean after the drug is approved and ready to go, then you have that five-year period of no copies.

Ronald J Riley (profile) says:

How is this any different then TechDIRT?

There is no question that some politicians are for sale. But how is their conduct any different than any business who carries water for their clients?

Take TechDIRT as an example. TechDIRT is incredibly hostile to inventors and the patent system. I have been suspicious for a long time that TechDIRT was acting on behalf of certain anti-inventor business interests.

It is an incredible coincidence that TechDIRT has business relationships with HP, Sun(Cisco), Microsoft and Intel. All of whom are Piracy Coalition members, actually FOUNDING members.

American Express is also a client, the plot thickens.

I am looking forward to Mike Masnick’s explanation for this incredible revelation.

Ronald J. Riley,

Speaking only on my own behalf.
President – – RJR at
Executive Director – – RJR at
Senior Fellow –
President – Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 – (202) 318-1595 – 9 am to 8 pm EST.

Mike Masnick (profile) says:

Re: How is this any different then TechDIRT?

Take TechDIRT as an example. TechDIRT is incredibly hostile to inventors and the patent system. I have been suspicious for a long time that TechDIRT was acting on behalf of certain anti-inventor business interests.

You have not hidden any suspicions. In fact you’ve outright accused me of shilling in the past. Yet you are wrong, and I explained this to you.

My position on patent reform is clear: I don’t think patent reform as presented is a good idea. I’m not sure why you keep insisting that my position is in line with the companies you mention, because it is not. In fact, I’ve quite clearly attacked their position on patents.

It is an incredible coincidence that TechDIRT has business relationships with HP, Sun(Cisco), Microsoft and Intel. All of whom are Piracy Coalition members, actually FOUNDING members.

American Express is also a client, the plot thickens.

I am looking forward to Mike Masnick’s explanation for this incredible revelation.

There’s no plot. Our relationships with all of those companies are clearly disclosed and explained: they used the Insight Community to hold discussions on the site, all of which are clearly stated.

Those discussions have nothing to do with what we write on Techdirt and never have. We are meticulous in disclosing what we do with each client. The folks we work with have nothing to do with the patenting side of the business. In fact, the only time I’ve spoken to any of those companies on anything related to patents was when Microsoft invited me (and a bunch of other bloggers/journalists) to hear about how wonderful their patent program was… and in response, I trashed them:

You’re looking for conspiracy theories where none exist. All of those companies hired the Insight Community — and most of the people we worked with at those companies have nothing at all to do with patents.

Conspiracy theories are fun, but when you have no evidence other than an overly paranoid mind, they go up in smoke pretty damn fast.

staff1 (profile) says:

a shilling we will go

“…but Eshoo, who represents part of Silicon Valley should know better than to be increasing monopoly protections.”

What nerve! Why cant they just get their monopolies the old fashioned way by bribing public officials like your friends at Microfoft, Intel, Cisco, etc who are trying to ram through Congress what they like to call “patent reform” which translated means run the innovative small firms out of business so we can carve up the markets for ourselves and keep selling the same old boring antiquated products. How much do they pay you to write this rot?

Patent reform is a fraud on America…
Please see for a different/opposing view on patent reform.

mhenriday (profile) says:

Wasn't it the great Leonardo who said,

when accused by patriotic Italians of working for the French King, who had invaded the peninsula, that «I work for the man who pays me» ? This may be a misattribution, but the period would certainly do as the collective motto of the majority of members of the US Congress. Too bad that apart from venality, they don’t share Leonardo’s other talents….


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