Patents Not Enough Of A Monopoly, According To Biotech Firms

from the say-what? dept

Apparently, a bunch of big biotech firms feel that the patent monopolies they already have over certain drugs aren't enough, and they are demanding Congress enact laws that also stamp out any competition from similar drugs (known, back here in the real world, as competitors). You would think that after centuries of understanding how bad monopolies are for the market that the gov't wouldn't kowtow and simply hand over such things -- but it is. Of course, the biotech firms already have patents, so it's questionable why they also need an additional gov't granted monopoly period to block out "biosimilar" drugs, other than the fact that they don't like competition.

They claim, of course, that they need this exclusivity to recoup their costs in developing the drug. However, the deeper you look at the details, the less true that really is in practice. Much of the really core biotech work is done under gov't grants anyway, and often at research institutes. These private firms pick up the trail later in the game in a lot of cases -- but still get full patent rights. The actual cost of developing these things has been massively overstated, often lumping in marketing costs to R&D. It is true that clinical trials are crazy expensive and a huge burden on biotech and pharma companies, but that's a separate issue. There are numerous proposals about ways to take the clinical trial burden expense away from pharma. Lumping those mandatory gov't induced expenses into basic R&D is misleading. Furthermore, even in the face of competition, time and time and time again, we've seen that the original provider still commands a large and noticeable premium, from which it can easily recoup its costs. This is nothing more than blatant monopoly rents with a Congress too clueless about basic economics to resist.
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Filed Under: biotech, competition, drugs, exclusivity, monopolies, patents, pharma

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  1. icon
    Mike Masnick (profile), 24 Jul 2009 @ 12:35pm

    Re: This is a bit misleading

    Thanks for the long and detailed comment. I think it provides some great additional info, but I want to take issue with one thing you said:

    This is a pretty egregious misrepresentation. Clinical trials aren't just some trivial bureaucratic speed bump on the way to market.

    I believe you're actually misreading what I wrote as well. I did not say that clinical trials weren't *important*. I agree that they're critically important. I'm just saying they're a gov't mandate and they put that mandate on the companies itself. That's a bad way to do it. I'm suggesting that there are better ways to handle clinical trials that are both safer and more efficient.

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