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Eli Lilly Enlists Congress In Fight Against Canada For Refusing Patent On Useless Drug

from the war-on-all-fronts dept

Eli Lilly bet its entire business model on patents years back, rather than on creating useful products that people want to buy. Lately it’s been having trouble getting new patents, and is reacting extremely poorly to the fact that its last-gasp efforts to get new patents aren’t working. As we’ve noted, a few years back, Canada rejected some patent applications for some Eli Lilly drug after the Canadian patent board “determined that the drug had failed to deliver the benefits the firm promised when obtaining the patent.” In other words, after realizing that the drug is not useful, Canada rejected the patent.

And Eli Lilly flipped out.

Eli Lilly has sued Canada for $500 million claiming “lost profits.” How is this possible, you ask? Well, it’s those corporate sovereignty provisions that are finding their way into various trade agreements lately. They’re usually called “investor state dispute settlement” (ISDS) provisions, because supporters know that such a phrase will bore most people to death and they won’t realize what’s happening. Eli Lilly is arguing that Canada’s decision to check to see if a drug is actually useful somehow violates its international agreements. And thus that a sovereign decision by Canada not to patent drugs of questionable benefit is not just a violation of trade, but stomping on Eli Lilly’s expected profits.

Lilly is now raising the stakes. Not only has it asked the USTR to put Canada back on the wacky “Special 301 list” of “naughty countries” that don’t bow before American corporate demands, but it’s convinced 32 members of Congress to out themselves as corporate shills for Eli Lilly by demanding that the USTR follow through on this request.

Eli Lilly seems to have no shame about this, happily admitting that it’s behind this effort to have the US punish Canada for daring to judge whether or not a drug is useful. As he told the Wall Street Journal:

“We’ve been unsuccessful in bringing about change by other means,” said Lilly chief executive John Lechleiter. “It’s an issue right at our back door. And unfortunately, we’re afraid it can lead to other countries attempting to undermine intellectual property.”

No, not “undermine intellectual property.” It’s about actually making sure, before giving you a decades-long monopoly right, that your drug is actually useful. Of course, if the USTR actually follows through and puts Canada on the Special 301 list, it will just cement what a complete joke the Special 301 list really is. For years, the USTR — at the behest of Hollywood — put Canada on the Special 301 list. Each year Canadian officials would specifically state that they “don’t recognize” the process of the Special 301 list as being legitimate (because it’s not) and then proceed to do nothing. Eventually, though, with a new government in place, Canada did change its copyright laws, and was “downgraded” on the Special 301 list. Upgrading them back up to a “pirate” nation will just highlight why Canada (and every other country) should totally ignore the nearly entirely arbitrariness of the list.

Meanwhile, shame on those 32 members of Congress for supporting such a blatant attempt by a company to interfere in the sovereignty of Canada and its crazy idea that drugs should actually be useful to deserve patent protection.

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Companies: eli lilly

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Comments on “Eli Lilly Enlists Congress In Fight Against Canada For Refusing Patent On Useless Drug”

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55 Comments
Anonymous Coward says:

Patented items must be useful?

That’s the first I’ve heard of this – I thought patents were granted based on other measurements, but whether they’re useful or not seems like it has never been one of them.

It’s kind of a dangerous assumption too – just because a drug has no useful benefits today doesn’t mean it might not in the future?

Anonymous Coward says:

Re: Patented items must be useful?

“It’s kind of a dangerous assumption too – just because a drug has no useful benefits today doesn’t mean it might not in the future?”

That’s not how the drug approval process works. You don’t get to just throw stuff against the wall to see what sticks: you actually have to have (independently-verified and independently-verifiable) proof that the drug does what its maker says it does. (And a lot more of course, like “not killing most of the patients in the process”.)

If we accept your hypothesis, then ANYTHING that could be administered to a human being by any means should be granted a patent because at some point in the future it might be shown to have a positive effect against some disease or condition. That way lies madness: it would permit, for example, one to patent a particular placebo because — maybe — in 2079, it could be shown to accidentally mitigate the effects of Masnick’s Syndrome (which I just made up).

The problem here is that Lilly botched the science. If they’d actually made the case in the lab/clinic/etc., then the Canadians would have done what they always do. But they (Lilly) didn’t.

Anonymous Coward says:

Re: Re: Patented items must be useful?

Masnick’s Syndrome is the compulsiveness to negatively comment with baseless facts against Mike Masnick. Those affected will comment on multiple articles either with an anonymous or an unregistered name. Some of the more extreme cases get to the point where the comments against Masnick appear even on articles that were written by a different author. There is no cure for these cases and the only solution has been for the Techdirt community to hit the report button when encountering these individuals.

Anonymous Coward says:

Re: Re: Patented items must be useful?

I thought patenting a drug is more about patenting the process of creating the drug… not patenting its purpose or usage.

I could be completely wrong.

But let’s not mix things up here – the FDA is where you take a drug for testing to verify that it does what it says. These are two completely different processes.

For an above comment – patenting a drug today that isn’t useful until 2079 is fine, as the patent will have become useless for the original patent holder, wouldn’t it?

Anonymous Coward says:

Re: Re: Re: Patented items must be useful?

The FDA does no testing for approvals, they merely go over the data submitted by the company when they submit a New Drug Application. All the testing is the responsibility, and financial burden, of the submitting company, which is why Eli Lilly went apeshit when they were told no. Because all they care about is profit, not if someone will actually benefit from their product.

http://www.fda.gov/drugs/developmentapprovalprocess/howdrugsaredevelopedandapproved/

Anonymous Coward says:

Re: Patented items must be useful?

While I presume you are being facetious, you should note that the second requirement for a patent is that the invention(s) are useful.

“Utility patents may be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or compositions of matters, or any new useful improvement thereof.”

If an item that does not work is challenged in court, which has happened in the past, and the plaintiff wins, then the patent is rendered unenforceable.

Anonymous Coward says:

Re: Re: Re: Patented items must be useful?

The majority of patents never make it to market, at least not by the patent holder, and are thus bad patents. It’s called patent phising. You throw a huge net of patents out there and something is likely to infringe. This either deters competitors from creating competing products or it allows incumbents and patent trolls to find something to sue anyone that does innovate.

Anonymous Coward says:

Re: Re: Patented items must be useful?

Getting a patent on an ‘unworkable device’ should be disallowed because it enables someone to get a broad patent on something that may cover something that may work and if someone else does go through the trouble of getting it to work the patent holder will then sue the innovator. Again, this does one of two things, it deters competing innovators from innovating or it allows patent holders to steal from those that do innovate by suing them.

Then IP proponents will want it both ways, when the patent does expire if someone does later come up with a specific working model of the previously patented general idea they will want to get a patent on that specific implementation.

You end up with the situation that we have now where patent trolls and industry have large patent portfolios of unused patents sitting around either being used for patent cross licensing leverage or for suing anyone that does innovate or for deterring competing innovations.

Sitting around and coming up with broad ideas is not deserving of a patent. Implementing them should be a minimum requirement. We need a use it or lose it clause to stop this patent phishing nonsense (or the use it or lose it language needs to be made stronger).

Yes, you’re absolutely right in saying that useless patents do exist. But the point is that they shouldn’t.

Anonymous Coward says:

Re: Re: Patented items must be useful?

This guy is alleging that these inventions do not work. I looked at a couple of these, and they seem as though they should work, but perhaps I am not understanding the allegedly unworkable portion.

Having a patent on an invention that does not work is all well and fine, but if the invention truly does not work, that is one way for a defendant to win a law suit.

Anonymous Coward says:

Re: Patented items must be useful?

Health Canada reviews all drugs before allowing them to be marketed, we’re talking about drugs here, things that can save you but also make you sick/kill you or just plainly do nothing special that other things in our canadian pharmacopoeia already do (they refused some companies version of extended release Tramadol, as we already have one Zytram XL, they refused the one that’s in the US). And canadian health authorities really dislike tramadol due to its dangerous seizure inducing effects. So they approved Codeine Contins instead when it comes to medium strength extended release painkillers.

Sorry if that bore you guys, but as a generic meds chemist (aka the Evil Ones who use expired patents to save lives and not put all their money on new medication that doesnt need to exist because one of our patents for a drug with the exact same profile expired), this is straight up in my field.

Pragmatic says:

Re: Patented items must be useful?

http://en.wikipedia.org/wiki/Thalidomide

So they use it for leprosy and cancer now.

So, when mothers-to-be are not informed that it can cause birth defects, they take it and end up with kids with limbs missing, etc.

So yeah, it may turn out to be useful for something later, but that’s not a good enough excuse to unleash it on the public today. Make sure it’s useful for SOMETHING before it is unleashed on the public.

And for the love of God, get all patents off of drugs and medical procedures! It’s morally repugnant to hold people over a barrel for necessary treatment because some profiteer wants to make a fortune off suffering. The research is already done in universities on our dime, so I fail to see why patents are necessary except to protect profits. They do little, if anything, for research.

Anonymous Coward says:

apart from anything else, this shows how the USA does whatever it feels like just to get something for it or an industry. in other words, the Bully part of the USA is still well alive and kicking!!
the hard thing to comprehend is why politicians go down the road of getting themselves a worse name than they already had, by doing something as absolutely stupid as helping a company sue a country. what is going to happen if this behavior carries on? have a planet full of bankrupt countries with an enormous number of exceedingly wealthy companies that are destroying the whole world!!

zip says:

Re: Re:

It seems to me more more a case of the authorities wanting to strip a drug of its certification as an approved medicine, and in order to do that, the weapon of choice was to attack the patent.

Maybe if the drug company had applied for the patent as a (expensive) industrial solvent, etc. (the route taken by more than one quack “remedy”) and sold it that way, they could have dodged that bullet.

Mason Wheeler (profile) says:

Re: Re: Re:

The authorities trying to make the drug no longer be an approved medicine? Where do you get that from?

What it says in the complaint is that competitors attacked the patent on grounds that it is “not useful” so that they could turn around and sell it themselves, which (if true, and I’m not accepting this whole thing uncritically) is about the most disingenuous thing ever.

Pragmatic says:

Re: Re: Re: Re:

If they have failed to identify the competitor, they’re probably lying OR insinuating that Canada is a competitor. Assume they’re telling the truth; if Canadian generic medicine manufacturers start selling a version of this stuff with the same active ingredients, they’ve got a case.

If not, we know what the truth is. After all, competitors trying to undermine your credibility have something similar to sell, don’t they?

zip says:

unique-molecule patent

While I’m certainly against the kind of stupid baloney-sandwich-with mustard-type patents that have flooded the patent office in recent years, it seems like a new drug, being a unique synthesized substance with a defined molecular structure, should be at least worthy of patent consideration on that basis alone.

And even something like “bath-salts”-type designer drugs shouldn’t need a high *usefulness* threshold to deserve patent protection since –unlike most patents these days– they are at least tangible creations that took a certain amount of time and effort to create … even if their (currently known) usefulness to society is essentially a negative value.

Anonymous Coward says:

Re: unique-molecule patent

“it seems like a new drug, being a unique synthesized substance with a defined molecular structure, should be at least worthy of patent consideration on that basis alone.”

Based on WHAT, exactly? What legal basis do you have for suggesting this?

You could synthesize any of a kazillion substances — we do it on our computers all day every day and sometimes even in the wet lab (when something looks promising) — but nearly all of them are useless. And some of them are poisons. If we could patent these merely because they’re unique, then our lab alone could drown the patent office in applications. And there are many, many labs doing exactly the same thing.

(“What did you patent?” “Two sticks and a rubberband.” “What does it do?” “Nothing…well, nothing yet. But one day it might produce cold fusion.”)

For a drug to be patentable, it has to actually work. I don’t think that’s an excessively onerous requirement.

Anonymous Coward says:

Re: Re: unique-molecule patent

I agree. Otherwise drug companies would try to get as many patents on every substance possible without doing any R&D and this will do one of two things

A: When someone else who did all the hard work independently finds a use for one of those substances some patent troll or drug company with a large patent portfolio of every substance imaginable will swoop in and sue them for infringement and take their profits

or

B: Competitors will be afraid to do R&D on anything since someone somewhere has a patent on it and will sue if they do find a use for it and market it. This will keep competition low for incumbent players and will deter innovation.

Drug companies will also like to have it both ways. They would like to get a patent on a substance for one use and when that patent expires they would like to get a patent on the same substance for another use (IIRC they have done it before or at least tried). So if they had it their way they would first get a general patent on every substance possible and later get another patent on the same substances for any specific use they can find.

Anonymous Coward says:

My Congressman is on There

I wrote to him with my concerns about TPP (including the secrecy in the negotiations and the truly anti-competitive nature of the deal) and all I got back was 3 pages of spiel that DIDN’T ADDRESS THIS. Instead it was all how trade is good and that we need to lower trade restrictions on this part of the world, etc etc.

That One Guy (profile) says:

Re: My Congressman is on There

So in other words you basically just got a pat on the head, told ‘The grown-ups are talking, go back to your toys, there’s nothing here for you’, and shoo’d off.

Always nice when a politician is that open in their contempt for the intelligence of the people who voted them into office, it’s a moment of honestly that’s more often than not quite rare when dealing with that lot.

teka (profile) says:

Re: re: Eli Lilly tantrum

Basically, Eli Lilly is claiming that failing to approve a new drug’s patent equals stealing all the money that they were going to make with it.

How do they decide that monetary amount?
Well, someone thought up a number and then they added all the Zeroes that could be fit on the page.

In other words, they think they deserve to make a bajillion dollars and if you dare challenge them about the drug ‘not working and being unprotected’ or ‘failing in testing’ you are responsible for covering the “profit” that you “stole from them”.

Anonymous Coward says:

Re: Re:

Which is called evergreening.

Much of this has been covered here in the past. If I remember correctly Canada requires that you give the real ingredients, so when the patent ends generics can be made. Eli Lilly tried to BS the patent board with fake ingredients. When tested, they showed up as fake ingredients that didn’t do what it was claimed. Only one ingredient was the actual active and effective part of the drug, the rest were all fake fillers to make it look like a new drug had been made.

Anonymous Coward says:

Re: Re:

Probably making an extended release version of X drug. Laughable. And I don’t laugh because I’m a chemist at a generics company. Big Pharma (which I don’t find generics companies to be, even if 3/4 of medication served is generics here if not more) hates Canada because medical patents are made to expire very fast. Apotex and Pharmascience are 2 good examples of (non-us company owned) Canadian generic companies that just make what’s tried and true and does not “innovate” only to extend patents or because a patent for a drug is about to be over so they have the whole R&D chemical engineer working their asses off to make a new molecule that does exactly nothing much different from another medication in the same family of molecules.

We have good laughs at lunch time about Big Pharma over here, especially whenever they make a “new” drug that’s just drug X made extended-release.

Rex (profile) says:

like the US does

Us old coots began to recognize that the trend of using IP law and inventions instead of actually making something that worked became the strategy that many (most?) US companies did back in the 1970s.

Seems like them ‘ferrners’ caught on and are now using the tools intended to protect US companies from competition are beating US companies at their own game.

Where TF do you think ISDS came from? The US government invented it when the ‘ferners’ started thumbing their nose at US patents.

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