Drug Prices Are So Insane That The NY Times Is Recommending The US Gov't Just 'Seize The Patents'

from the seems-like-maybe-we-should-fix-the-patent-system dept

Drug prices are sky high. This is not news. A bunch of incredibly dumb policy decisions have been stacked up for decades and brought us to this place where drug prices — especially for life-saving drugs — would bankrupt most people. A huge part of the problem is our patent system and how we literally grant monopolies to companies over these drugs. Combine “life saving” with “monopoly” and, uh, you don’t have to have a PhD in economics to know what happens to the price. Add into that our fucked up and convoluted hospital and insurance healthcare system, in which prices are hidden from patients, and you have a recipe for the most insanely exploitative “marketplace” ever.

The NY Times has taken notice of this and its editorial board recently put forth some partial solutions that could be done right away to ease the burden. This includes having the federal government flat-out seize patents:

Consider seizing patents. Two statutes enable the federal government to override patents on F.D.A.-approved medications and produce them at cost. The first, known as Section 1498, works as a sort of eminent domain and allows the government to override any patent if the patent holder is compensated fairly. The provision was invoked frequently in the 1950s and ?60s to obtain crucial medications at a discount. Its use waned in later decades as the drug industry?s influence over government grew.

The second statute, known as march-in rights, allows the federal government to take similar action on any product invented with government money. The United States has never used this power for a prescription drug, but a growing number of policy experts and consumer advocates are pressing the federal government to use it now, for drugs like Truvada (the only drug approved to prevent infection with H.I.V.), which the government funded and holds some patents on. Patent overrides certainly won?t work for every medication, but they have been used successfully in the past to force the drug industry to the negotiating table. Mr. Trump could send a powerful signal to drug makers if he utilized them now.

Of course, the idea that the Trump administration is going to start seizing prescription drug patents is kind of laughable. And, man, the legal battles to watch over that would be quite impressive. But, to me, it shows just how bad things have gotten that a paper like the NY Times would casually toss out having the government seize private company patents to deal with the insanity of drug pricing.

Furthermore, while the Times is correct that this could be “done now,” it seems like yet another way of treating the symptoms not the disease. Fix the fucking patent system. Fix our broken healthcare system. Do those two things and you don’t have insane drug pricing any more. And, to be fair, at least the NY Times piece does acknowledge the idea that maybe we need to “blow up the patent system and start over” when it comes to pharmaceuticals. But it labels this idea as “fantastical.” It may be “fantastical” to those with limited imaginations and focused on living under today’s crappy, broken system. But if we want to deal with the real problems, that’s one area to start.

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Comments on “Drug Prices Are So Insane That The NY Times Is Recommending The US Gov't Just 'Seize The Patents'”

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Mason Wheeler (profile) says:

Back in the day, when we ran across someone whose business model was "your money or your life," we found the idea so thoroughly, viscerally offensive that we would put up wanted posters literally offering a reward to whoever killed this person.

Nowadays, we make billionaires out of them.

Society has changed a lot in the last couple centuries, but not all of it is for the better.

Bruce C. says:

Blowing up the patent system...

is fantastical.

In the same sense that a constitutional convention is a fantastical way to solve dilemmas between desirable social outcomes (say gun control) and current interpretations of the constitution.

You may go in with the intention of solving a critical problem, but what comes out after hearings, lobbying, compromises and campaign donations will look like Obamacare: way more complicated than it could have been and doesn’t really address the problem because of obstructions thrown up by those profiting from the current system.

OldMugwump (profile) says:

Price effect on patient/doctor choices, not just "transparency"

We could have perfect transparency, but that wouldn’t solve the problem.

Doctor: Treatment A costs $10 and has a 95.1% chance of saving your life. Treatment B costs $1,000,000 and has a 95.3% change of saving your life.

Either way, your insurance company will pay for it.

Patient: I’ll take Treatment B. 95.3% is higher than 95.1%.

Unless patients and doctors (whoever’s doing the deciding) bear the costs instead of 3rd parties, we’re never, ever going to fix this problem.

Gary (profile) says:

Re: Price effect on patient/doctor choices, not just "transparen

That is perhaps an argument against a 3rd party healthcare system. (Which obviously would be impossible to implement (See Europe, where such a system costs hundreds of dollars for office visits, giant co-pays, and impossible premiums.))

Hower not seeing what that has to do with the IP monopoly in the article, and how the patent-lock in allows drug manufacturers to jack up the prices on drugs with no fear of competition.

Drug prices which are only going up now that the patent holders see how well it’s working (for them) every time they do it.

OldMugwump (profile) says:

Re: Re: Price effect on patient/doctor choices, not just "transp

A 3rd party system where the 3rd party that’s paying ALSO decides on treatments (as per the British NHS) is completely compatible what I described.

The problem is that party A decides on treatment, and party B gets to pay for it. That’s what’s unworkable.

If we do move to a universal healthcare system in the US (not what I advocate, but it would be no worse that the current mess), ultimately the Feds will decide who gets what treatment.

There is no other practical solution.

Anonymous Coward says:

Re: Price effect on patient/doctor choices, not just "trans

"Either way, your insurance company will pay for it."

I find this difficult to believe. Given the credible accusation that insurance companies pay their employees a bonus for rejecting claims, one might expect more of the same from these folk. Pre existing conditions is just another of many excuses for them to shirk their obligations.

William Jackson (profile) says:

Seizure vs invalidate

As patents are government granted monopolies, if a company or person abuses that monopoly, the government should be within its rights to invalidate that said patent and thereby placing it in the public domain. The government shouldn’t seize the patent, which keeps the monopoly alive with potential repeat abuse. Although, if federal funds were used, an argument for seizure over simply invalidating and placing into the public domain could make sense.

ECA (profile) says:


Go out and when a Drug goes Generic, THE DRUG STAYS GENERIC..
NOT compounded, with another drug, and the CR is NEW..
Like Adding Peanut butter to a banana, and have a new fruit.

Also DEMAND a fixed system.. the first few ears they get to Charge whatever, and after that, PROVE ITS WORTH, or it goes for what WE SET as a price..

There is a interesting thing about the idea of communism, and restricting prices on MAJOR things in this nation..
The real problem with this, is that its almost REQUIRED, because of how the corps are acting.

Anonymous Coward says:

Re: Protect

Go out and when a Drug goes Generic, THE DRUG STAYS GENERIC..
NOT compounded, with another drug, and the CR is NEW..
Like Adding Peanut butter to a banana, and have a new fruit.

It’s funny how, when two dirt-cheap generic drugs are combined in a single capsule, the price increases by 50x over the price of buying the two drugs separately. Doctors should not be writing such prescriptions, and when they do annyway, pharmacists should be allowed to substitute the two drugs separately, giving the patient and insurance company a huge cost savings.

Ceci est ne pas mon nom en l'ecran pour l'instant. says:

Focusing your "Socialism Lite" on one tiny area won't help.

This is only "somebody outta do something", your stream of consciousness when needed a piece for the key 9:30 slot and didn’t want to get tangled in any controversy. It’s using a magic marker to try and refresh your very faded "Champion of the poor" poster to hide the fact that you’re born rich Ivy League elitist. You won’t even spring for a professional sign painter, but expect the poor to make up your reputation for free. (Quite literally! You used to advertise Techdirt as crowd-sourced solutions, and your moribund "Step 2" has "??????" as your only contribution to finding solutions.)

Doesn’t fool anyone after you shamelessly promote corporatism. Rest of the time you attack any plans to regulate or tax as stifling innovation and encroaching corporate "Rights".

Patents are in the US Constitution and law of nearly every country. You’ve attacked copyright and patents for 20 years now without result. A PhD as you claim to be should have sense to stop (19 years ago).

You could at very least write a list of bullet-pointed principles. How can we know whether to follow without knowing where you stand and where you wish to take society? — From this empty whining which typifies your 20-year history: you simply don’t wish your actual goals known.

The only reason you go on, Masnick, is you’re an academic with nothing better to do, and the only way you go on is have inherited money: you don’t work nor even try to attract a large audience.

Robert Beckman (profile) says:

Re: See Insulin...

Insulin prices are largely driven by bad regulations (at least since 2010), so yes, things have changed.

What happened is that Congress passed a law about how to regulate biologics (including insulin), and during the Obama administration the FDA stated in rule making that any insulin application outstanding on the effective date of 1/1/2020 would be summarily denied, and the applicant would have to start over.

So the 3 current worldwide manufacturers all know that their competition has been locked out by the government for a decade, and raised prices accordingly.

Are they scum? You bet. Were they directly aided by the government, likely for improper reasons? I sure think so, even if the actual reason was FDA laziness. I hope at least someone got paid off – I’d rather it was greed than sloth, and the world needs more Ferrari’s.

Ninja (profile) says:

It’s a goddamn temporary monopoly granted by the government because the Constitution itself allows it. But once it’s both not achieving its goal of promoting progress (people dying because they can’t afford is hardly progress socially speaking) then it should be revoked. Simple as that.

Some dudes here thing progress means only scientific and economic development. A truly developed country cares for its people. The US clearly lacks in this human front.

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