Patents Getting In The Way Of Saving Lives; Fabry Disease Sufferers Petition US Gov't To Step In

from the patent-problems dept

Whenever I read stories like this one, it just makes me wonder how people can defend patents in certain situations. Genzyme is a pharma firm that has a patent on a drug, Fabrazyme, which is used to treat Fabry disease, an enzyme deficiency that can create very serious problems in those who have it — including kidney failure and heart attacks. The problem? Genzyme apparently can’t produce the supply needed by patients. Now, in a true free market, when supply was less than demand, a competitor would step up production, but (oh wait!) there can’t be any competitor, because the patent means that Genzyme is currently the only one legally allowed to make the drug. Now a group of patients who have been forced to ration their dosage at one-third the usual amounts, leading to serious health problems and at least one death, has petitioned the government for the right to break the patent.

They’re not trying to completely strip Genzyme of the patent. They’re merely asking the government to let others produce the drug, and pay Genzyme a mandated 5% royalty. Now, I know the typical response from patent system supporters: without the patent, perhaps this drug wouldn’t even exist. The only problem with that is that it’s almost certainly not true. The actual research for Fabrazyme was actually done by the Mount Sinai School of Medicine financed by the National Institute of Health. Yes, you read that right. This drug was discovered with taxpayer money… but they were still able to get a patent and then license it to Genzyme.

Chances are this petition won’t be approved. These petitions are never approved. But it does highlight the ridiculousness of the current patent system potentially putting people at risk. It’s a travesty that federally funded research has been locked up under a patent and limited to only one producer, leading not only to very high prices for the drug, but also excessively limited supply that is putting people lives in danger, and may have already killed one person.

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Comments on “Patents Getting In The Way Of Saving Lives; Fabry Disease Sufferers Petition US Gov't To Step In”

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46 Comments
Hulser (profile) says:

Only Genzyme can produce the drug?

the patent means only Genzyme can produce the drug

Wouldn’t it be more accurate to say that because it holds the patent on this drug, only Genzyme can decide if other companies can produce the drug? I mean, patents don’t prevent a patent holder from contracting out the manufacture of its patented product. It’s just that in this case, Genzyme is choosing not to do this, right?

Mike Masnick (profile) says:

Re: Only Genzyme can produce the drug?

Wouldn’t it be more accurate to say that because it holds the patent on this drug, only Genzyme can decide if other companies can produce the drug? I mean, patents don’t prevent a patent holder from contracting out the manufacture of its patented product. It’s just that in this case, Genzyme is choosing not to do this, right?

You’re correct. Fixing the post.

Hugh Mann (profile) says:

Re: Re: Only Genzyme can produce the drug?

Well, is the assertion that there are companies ready to manufacture the drug in sufficient quantities, and Gensymze is refusing to license to them?

And is a 5% royalty customary in pharmaceutical patent licensing deals?

Regardless of good intentions, I get very nervous when the government is called on to sieze or otherwise control private rights or property. Should we also put salary caps on the doctors who will then administer the drug to the patients?

HM

eclecticdave (profile) says:

Mount Sinai School of Medicine […] were still able to get a patent and then license it to Genzyme.

I admit I don’t know that much about patent licensing – but isn’t it common practice to only give out an exclusive license in return for assurances that the licensee will be able to meet demand? If they’re failing to do so, couldn’t Mount Sinai withdraw their exclusivity and license out to other companies to make up the shortfall?

Anonymous Coward says:

One of the NYT articles notes that there is one other manufacturer of another drug for the treatment of this disease, and that some time ago the FDA allowed it to be dispensed in advance of formal approval. The article goes on to note that some patients have switched over to the other treatment.

The NYT article also notes that these are particularly rare genetic diseases, with the one involved here having about 1,000 people who have been receiving the drug from the patent holder.

The petition requests the USG to exercise “march in” rights, but one does have to wonder if this would make the slightest difference if the petition was granted. Are 1,000 patients a sufficiently large market for a company to decide in favor of almost immediate market entry?

Steve R. (profile) says:

Re: Re: Re: Aren't we Forgetting Something?

Why would it be prohibitively expensive to license? Genzyme could set whatever licensing schedule they want. In fact, if they are unable to produce a “life-saving” drug and even have a minimal sense of social consciousness they could set the license fee at $0.00. Good public relations.

Of course, the drug could be very expensive to produce. So even if the license fee were $0.0, other drug companies may still not offer to produce it.

DrZZ says:

more details

There’s a lot more details that were left out. First, the patent is not owned by Genzyme, it is owned by Mt. Sinai and licensed to Genzyme. I couldn’t find details of that agreement, but it is not likely that Genzyme is getting it for free. What is indisputable is that Mt. Sinai persued the patent and made the decision to enter into an exclusive license with Genzyme. If the patent is the villain here, the blame falls exclusively to Mt. Sinai. Is the patent the villian? I think to conclude that you would need to argue that 1) the existence of the patent made no difference to Genzyme’s decision to fund all the clinical trials needed for FDA approval and 2) without the patent there would be multiple companies willing to not only to fight for a piece of a tiny market, but they would have had the capacity to increase production when a competitor falters. I think both are unlikely. As someone else mentioned, it is also extremely unlikely that the march-in request would have any effect at all. The shortages are caused by manufacturing problems in a Genzyme plant (viral contamination). They hope to resume full production by the end of the year. I find it hard to believe that someone would want to invest the large pile of money needed to get acceptable manufacture of the biological agent up and running in that time frame, let alone get all the regulatory approvals. If you think the regulatory approvals are a waste, then why not just let Genzyme ship the virally contaminated product?

Anonymous Coward says:

Re: more details

“without the patent there would be multiple companies willing to not only to fight for a piece of a tiny market, but they would have had the capacity to increase production when a competitor falters.”

Then no one should have a problem if the govt temporarily suspends the patent being that it won’t make a difference anyways.

Heck, if this were true then why doesn’t the patent holder temporarily suspend the patent until he can finally produce at full capacity and restore the lost products, under the condition that anyone who produces the drug will later be subject to the patent and either be forbidden to produce it or have to pay royalties.

DrZZ says:

Re: Re: more details

Well, since the patent does exist, any statement about what would have happened if the patent didn’t exist has to be at least some guesswork. It’s not hard, however, to see why a company would want exclusivity. A good chunk of the costs are fixed; you have to come up with a manufacturing method and you need to prove that the method can produce consistent, safe product. In this case, you also had to fund all the clinical trials necessary for FDA approval. None of these steps are guarenteed success and there is a very small patient population to absorb these costs. If the patient population needs to be shared, it makes the risks that much greater. Did all this add up to a situation where Genzyme decided that if they didn’t get exclusivity, they would not make a deal? I don’t know for sure, but I would not be at all surprised. Did any other company express interest and did they demand exclusivity? Or did Mt. Sinai take the offer that gave them the most money? I would be very interested to find out.

Anonymous Coward says:

Re: Re: Re: more details

“It’s not hard, however, to see why a company would want exclusivity.”

Any company wants a monopoly, but that hardly constitutes evidence that a monopoly does anyone but the monopolist any good.

“Did all this add up to a situation where Genzyme decided that if they didn’t get exclusivity, they would not make a deal?”

The relevant question is would the drug be produced without patents, whether by Genzyme or otherwise. and, beyond speculation and unsubstantiated guesswork, I see no evidence to suggest that it wouldn’t or that patents do anything to promote the progress. For instance, see

http://levine.sscnet.ucla.edu/general/intellectual/against.htm

There is tons of evidence to suggest that people will find other ways to fund it. Patents make it difficult by locking non patent holders out after taking away their incentive for finding ways to find research.

Also, pharma usually refuses independent auditors to audit their costs and independent studies, presented on techdirt before, have shown that the costs are much lower than what pharma claims.

They want a monopoly but they don’t want to justify their monopoly. I think such unregulated monopolies are unacceptable. If they want a monopoly that distorts the free market then it aught to be regulated, I want independent auditors to ensure that the patents are justified. But you will refuse because you know the costs are unjustified.

and not to mention that the most risk was taken by tax payers, only later after public research has taken the most of the risk of figuring out that the drug shows promise did the pharma perhaps decide to fund anything.

DrZZ says:

Re: Re: Re:2 more details

You’ve made a lot of general statements that are debatable, but I’m interested in looking at the specifics of this particular case before trying to draw more general conclusions. First let’s be clear about the government funded research in this case; it was not patented by Genzyme, it was patented by Mt. Sinai. Mt. Sinai didn’t have to patent it, but they did. They could have simply published it and let whoever could make use of it, do so. They didn’t do that and that was their decision, not Genzyme’s or pharma in general. Second, Mt. Sinai decided to enter into an exclusive licensing agreement with Genzyme. Genzyme may or may not have made exclusivity a condition for their agreement, but surely they have the right to decide how they run their own business and Mt. Sinai was the one who utimately decided who to license and under what conditions. If there were other companies that were interested and were shut out, it was Mt. Sinai’s decision, not Genzyme’s. Could Mt. Sinai have done better? Well, you could say that they shouldn’t have been in the position to make a decision because they shouldn’t have patented in the first place. Given the patent, what else could they have done. There’s almost no information on the choices they had. If no other company was interested or everyone was demanding exclusivity, what was their best choice? You claim that there are lots of alternative methods of funding further development and, in general, there are, but in this particular situation, what were the alternatives and how well would they have worked? Again, if there is blame to hand out for not taking advantage of alternatives, it falls on Mt. Sinai, not Genzyme. There are real serious issues in trying to translate basic science not only into useful medicines, but affordable medicines. I think that if progress is to be made, it is vital that facts need to be straight and attention needs to be paid to specific details. Deciding ahead of time who the heros and villians are doesn’t lead to any progress.

Anonymous Coward says:

Re: Re: Re:3 more details

“it was not patented by Genzyme, it was patented by Mt. Sinai.”

Irrelevant, I’m not arguing this point that you keep mentioning for no good reason.

“but surely they have the right to decide how they run their own business”

and that’s fine, but they don’t have a right to a government granted monopoly. The government should only grant these monopolies to the extent that they promote the progress.

“If there were other companies that were interested and were shut out, it was Mt. Sinai’s decision, not Genzyme’s.”

This isn’t what I’m arguing. But the government is being petitioned here and, regardless of who owns the patent, the government has the authority to free the market by temporarily revoking the patent.

“but in this particular situation, what were the alternatives and how well would they have worked?”

The government funded most of the more risky R&D, the early R&D, and I see no reason to believe that alternatives would not have worked.

“Again, if there is blame to hand out for not taking advantage of alternatives, it falls on Mt. Sinai, not Genzyme.”

It falls on the government, for not fostering a free market that first encourages alternatives before granting a patent after the alternatives fail.

“Deciding ahead of time who the heros and villians are doesn’t lead to any progress.”

I’m not deciding ahead of time, I’m looking at the evidence and deciding based on the evidence. and I’m not trying to decide who the hero and villains are, I’m trying to discuss the best government policy for encouraging progress.

Anonymous Coward says:

Re: Re: Re: more details

“Did any other company express interest and did they demand exclusivity?”

I think companies know that if they don’t have a patent there is no use in funding R&D because whoever does have a patent will likely sue for infringement.

I think we need a system that first gives people, companies, and organizations the opportunity to conduct and fund R&D, and figure out ways to fund that R&D (be it by donations of those affected by a disease the drug seeks to cure or by the collaborative donations to a specific researching organization of various corporations that wish to sell the drug) without patents. Then, if no one accepts, the govt can allow exclusivity. But I know the outcome, and you know it too, that most promising looking drugs will find funding without patents and so you will disagree with granting such an opportunity because you want your monopoly rents.

Patents should only be granted after the free market, without patents, has spent some time looking for a cure to something and couldn’t find it. To grant to whoever asks for it first takes away much of the free market incentive that the rest of the free market has to conduct R&D.

After all, Google invested 1 billion on Youtube without exclusivity to video websites. People find ways to invest into things without exclusivity, they always have, and you know it. Patents aren’t needed, even in pharma, and you know this (the evidence shows it and you have absolutely zero evidence to support your position beyond mere speculation) which is why you would never even agree to try to give an opportunity to private researchers to conduct R&D without patents before granting patents if no one takes the offer.

Anonymous Coward says:

Re: ...

I am a Fabry patient & have been getting the drug for several years. Genzyme has been stalling for months & I really do not think they will resume full production by the end of the year. In the mean time I think if other companies are willing to help with this nightmare that has happened to the Fabry community they should let them no matter what the loss is to the profits. We need the drug & that is really all that matters. I just wish someone with political power would see this & step in & help us.

DrZZ says:

Re: ...

DrZZ has some very good points, but towards the end of the year is way too long and not even a guarantee. The court should allow a break of the patent and Genzyme board members should fire management for not understanding the basic principles of S&D.

I’m not sure how much incompetence figures into Genzyme’s production problems, but I know manufacturing biologicals is extremely tricky. You have hundreds or thousands of gallons of living cells in conditions that huge numbers of infectious agents love. Everything has to be kept healthy and you don’t always have the assays to diagnose what’s wrong, or even know that something is wrong. This situation is made even worse by the tiny market. All the pressure is to lower the cost, which certainly doesn’t make adding procedures and tests easy. It also gives me a chuckle. Mike is usually quite vocal in arguing that ideas are vastly overrated in looking at innovation, execution matters much, much more. Here is a case that illustrates exactly that, the patent in question is not for a drug; it is for an idea for a drug. The real hard part, the execution, is getting a reliable and economical process to manufacture the drug. But that work wasn’t funded by the government, which goes against the claim Mike wants to make here that the governemnt funded a drug, so in THIS case, the patent is everything.

Lawrence D'Oliveiro says:

Re: Re: What The Patent Is On

DrZZ claimed:

The real hard part, the execution, is getting a reliable and economical process to manufacture the drug. But that work wasn’t funded by the government…

And it’s not the part covered by the patent in question. The patent is for the drug, not for the manufacturing process. There seems to be no patent specifically covering the manufacturing process for this drug. Given that, as you point out yourself, the patent doesn’t actually cover the hard work anyway, why be mangy about licensing it?

DrZZ says:

Re: Re: Re: What The Patent Is On

Given that, as you point out yourself, the patent doesn’t actually cover the hard work anyway, why be mangy about licensing it?

As a general principle, I agree. But I don’t see any evidence in this case that anybody is being mangy about the patent. Who has been turned down for a license? There seems to be a lot of people assuming that a bunch of companies are clamoring to jump in to manufacture this drug, but have been turned away by Genzyme. I don’t see any evidence that any part of that assumption is true.

Rez (profile) says:

This will bite them hard

People are willing to kill for food when they are starving, imagine what they will do when they might die. Now I’m not advocating violence, but people do what they must do to survive. Could anyone be surprised really if one of these poor victims decides to set up an illegal manufacturing ring and arm themselves to protect it?

We need politicians who don’t have “SOLD” on their name tag after they visit big businesses like these. Too much is owned by too few for this to end without innocent people getting hurt.

DrZZ says:

I’m not sure why many people posting think Genzyme has the sole say in who gets to license the patent. They aren’t the owners. Even if they give up their exclusive license, they wouldn’t have any power to grant a license to anyone else. From one of many SEC flings.

In addition, a portion of our proprietary position is based upon patents that we have licensed from others either through collaboration or traditional license agreements. These licenses generally are worldwide, exclusive, for a fixed duration and require us to use reasonable or diligent efforts to develop and commercialize the relevant product and to pay on-going royalties on product sales. Our licensed patents that we consider important to our business include the following:


Fabrazyme is protected by U.S. Patent No. 5,356,804, which is licensed from Mount Sinai School of Medicine of the City of New York and expires on September 27, 2015.

Gene Cavanaugh (profile) says:

Genzyme

Totally agree, Michael! I became a patent attorney to help the system and to help others, this abuse of the patent system does neither.
The patent system should never allow taxpayer money to help private companies get a patent.
The patent system should mandate licensing, especially in drugs (no monopolies!)
All IP, patents, trademarks, and copyrights, should have “use it or lose it” provisions (trademarks does, though it is not enforced effectively enough).
All IP should be for a “reasonable time”, and copyright, as the most extreme case of such abuse, certainly is NOT for a “reasonable time”!

The dude says:

really?!

You all think that someone can just pick up the manufacturing of the drug just like that? do you think it is a simple thing to make this drug. well you have no clue!
it is’n’t mixing sugar and water and making a pill… this is a biological that required years of testing and if it was so easy… wouldn’t genzyme be able to reproduce it in any other plant they own… and they own may.
bunch of ignorants.. do your research before you talk… genzyme cares about the patients, they care about the person who died… they care about many others as they offer the drugs they make free of charge to many. Unbelievable you are!

Anonymous Coward says:

No meaningful discussion of this matter can take place without at least a copy of why the NIH decided as it did.

The NIH’s analysis of the situation can be found at:

http://freepdfhosting.com/d30ee703c3.pdf

It’s analysis of the background associated with this matter addressed each of the reasons why it believed the exercise of “march-in” rights would at this time prove to be a fruitless endeavor.

To understand a situation such as this highlights why it is very important to understand both sides of an issue.

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