How Patents Harm Biotech Innovation

from the scaring-people-off dept

Patent defenders often claim that patents are necessary because top venture capitalists would never invest without patents. And yet, we keep pointing to examples of some of the best venture capitalists in the business who are quite skeptical of patents. For the most part, those have been limited to software patents, but Brad Feld seems to have jumped the hurdle to recognizing it's not just software patents that are the problem, and is digging into the research on how much patents have held back innovation in lots of other fields as well (Brad: if you want a list of more such research, let us know...). He's written up a post about some upcoming research concerning patents in the biotech field, where he explains how patents are hindering innovation in that field as well by scaring off research into certain areas:
Regularly, patent advocates tell me how important patents are for the biotech and life science industries. However, there apparently is academic research in the works that shows that patents actually slow down innovation in biotech. The specific example we discussed was that there is increasing evidence that when a professor or company gets a patent in the field of genetics research, other researchers simply stop doing work in that specific area. As a result, the number of researchers on a particular topic decreases, especially if the patent is broad. It's not hard to theorize that this results in less innovation around this area over time.
I can't wait to see the final results of that study, as it would fit in well with a few other studies that have found similar results.

Filed Under: biotech, brad feld, innovation, patents, vcs

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  1. icon
    Richard Corsale (profile), 7 Feb 2010 @ 3:45pm

    Re: Re: Re: Re:

    "There's still a tremendous value in being the first to the market."

    Ehhhhhhh not exactly in this case, I think the hook here is marketing. The first to market pays out of pocket for the drugs popularity. So if, a new Viagra competitor came out tomorrow, they would send in the reps to push samples, buy all of those ads with the fast taking guy who tells you that you're going to die if you take it.. etc.. The thing is, it takes relatively little time to knock off most drugs. So reallly as soon as they succeeded in establishing a market worth taking, the generics would just ship at that point. As we all know, they have major advantage over the brands. Most pharmacists automatically substitute. Sooo that wont work IMHO.

    The idea of insurance companies manufacturing, on the other hand.. Thats a great idea. Hmmm what if, manufacturers offered insurance or uhh prescription subscriptions? for the drugs in there portfolio. They could cut out the middleman and ship direct. If HIPAA permits, that could be a golden marketing opportunity (depending on the drug). That may not be enough, but it's a start. Yeah I'm sure there are other ways to monetize. Value added proposition, or through direct savings, as in the case of insurance companies manufacturing pharmacy.

    Then theres also option C, stop spending billions on marketing :) I remember a time when the prescription drug manufacturers didn't advertise on TV, let alone every second of every day.

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