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, 10 Mar 2011 @ 8:11am

    Re: Re: Drug Costs

    You hit it. Mike has deluded pretty much everyone into looking only at "marginal costs", which never admitting that the marginal costs on anything are often the very narrow end of the wedge.

    Most drugs are actually fairly simple to make once you know how. The actual production of a single dose isn't specifically that expensive. However, knowing what combinations work, knowing the methods to combine the ingredients, how to filter them, how to purify them, how to get them into the right state, how to control their release into the bloodstream... all of those incredibly expensive things have to be paid for. Then there are the legal ramifications, the liability created in putting the drug on the market at all. The risks must be covered somehow.

    By narrowly focusing only on selected parts of the process, Mike has been able to create a sort of cult like following where people ignore the bigger picture and focus on a single point in any given process. Inside those narrow confines, he is often right, but taken in the larger picture, he is incredibly wrong.

    I have never once seen Mike explain how the development of medicine would be speeded up by eliminating patents. He only focuses on the apparent harm done to people who are trying to glom onto someone else's discovery and re-package for profit (calling it innovation, natch!).

    It's a techdirt fairy tale, retold daily.

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