Drug Firms Freaking Out Over Expiring Patents

from the live-by-the-patent... dept

Glyn Moody points us to a discussion about how the big pharma firms are freaking out because their key patents are expiring, and they've failed to develop any new patentable drugs in a while. This is leading the usual patent supporters to worry and fret. Of course, the whole thing is backwards. As Moody points out, expiring patents should be a cause for celebration, not dismay. It means the public is getting access to all sorts of important medicines at much more reasonable prices. That's good news.

The real issue here is that for years patents massively distorted the healthcare market. It hasn't been about keeping people healthy at all. It's been about finding patentable drugs to extract monopoly rents (often at the expense of actually keeping people healthy). Perhaps, if we can get past this silly and short-sighted focus on patentable medicine as being the key component of healthcare, we can start seeing smarter companies develop smarter business models that actually align interests: firms that recognize there's tremendous value in actually keeping people healthy, rather than trying to sell them a tiny pill.

If you start looking at the economic research behind healthcare, you begin to realize that the economic incentives around healthcare are totally screwed up. The reports have shown that keeping people healthy for longer contributes billions, if not trillions to the economy. If firms can't figure out how to profit from keeping people healthy, they're not paying attention. But that's never been the focus of our healthcare policy, and it's a shame. If today's drug companies are felled by their overreliance on patents, perhaps we can finally move on to rethinking healthcare towards making people healthy and improving the economy at the same time... rather than the current structure that appears to do neither of those things all too often.

Filed Under: business models, drugs, health care, healthcare, patents, pharma


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  1. identicon
    Anonymous Coward, 11 Mar 2011 @ 10:15am

    When you start to assume drug companies mean health care, that is dangerous thinking. Not to slam drug companies, but they only play a part in the whole thing, even if it is a big part.

    Drug costs consume about 15% of all healthcare dollars spent in the US. You can't fix the system by changing a small part.

    Health care in the US is pretty good, you may not like how we pay for it, you may not like limited access, but I wouldn't trade our health care system for any other countries setup.

    Drug companies success at drug discovery has pretty much sucked recently, this has been the trend for quite a while, and now the patent chickens are coming home to roost. I am not sure why there has been a lack of success and if anyone tells you they know why, they are lying. Maybe the easy drugs have been discovered, maybe we now have the technology in place that identifies drugs that will harm a certain group of people and those projects get killed now when in the past, they were allowed on the market, who knows.

    I will say this though, health care is rationed. In the US, we do that with money. In some countries, they do it with time. We have to have a conversation on what exactly we want our system to provide. The majority of health care dollars is spent in the last years (or weeks and months) of life. Is this appropriate?

    Should we spend millions on someone with a rare genetic disease, millions that could care for many "healthy" people? Should we tell the family that sorry, grandpa has to die because this expensive procedure will only give him an additional year of life? Should we tell that young couple that their premature baby won't make it because the costs are too great?

    Ask any doctor and they will tell you that fit, non smoking people greatly reduces health care costs. Know what the greatest cost to our health care system is today? ESRD. End Stage Renal Disease. Dialysis. Get rid of fat people and most of that goes away. We are going in the other direction, what does that mean?

    So you have to decide what you want out of our system. Drugs produced by pharmaceutical companies have saved more lives than any doctor out there ever will, but drugs are only part of the equation.

    We have to decide what we want and how it is delivered.

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