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.

Filed Under: drug pricing, drugs, patents, pharmaceuticals, seizure


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  • icon
    Gary (profile), 18 Jul 2019 @ 8:25am

    Property

    What? The government can't just go around seizing property left and right!

    Good things Patents aren't property - they are limited licenses granted by the Feds that can and should be yanked if abused. You have no intrinsic "right" to exclusivity only a government backed and unnecessary monopoly.

    reply to this | link to this | view in chronology ]

  • icon
    Mason Wheeler (profile), 18 Jul 2019 @ 9:15am

    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.

    reply to this | link to this | view in chronology ]

  • identicon
    Bruce C., 18 Jul 2019 @ 10:18am

    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.

    reply to this | link to this | view in chronology ]

  • icon
    OldMugwump (profile), 18 Jul 2019 @ 11:20am

    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.

    reply to this | link to this | view in chronology ]

    • icon
      Gary (profile), 18 Jul 2019 @ 11:27am

      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.

      reply to this | link to this | view in chronology ]

      • icon
        OldMugwump (profile), 18 Jul 2019 @ 11:40am

        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.

        reply to this | link to this | view in chronology ]

      • identicon
        Rocky, 18 Jul 2019 @ 11:41am

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

        What do you mean by Europe? Europe consists of 51 different countries with their own different health-care insurance systems, some better some worse.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 19 Jul 2019 @ 6:40am

      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.

      reply to this | link to this | view in chronology ]

  • icon
    btr1701 (profile), 18 Jul 2019 @ 11:39am

    Designated Survivor

    This was part of the plot of an episode in the most recent season of DESIGNATED SURVIVOR.

    Kiefer Sutherland's president used the march-in rights to seize the patent on a cancer drug that was being sold for $20,000/pill. As soon as they did, the drug company was eagerly willing to discuss lowering the price.

    reply to this | link to this | view in chronology ]

    • identicon
      Annonymouse, 19 Jul 2019 @ 9:17am

      Re: Designated Survivor

      Too bad they did not go the extra step of putting the executives on death row as extortionist mass murderers .
      Now THAT is pure fantasy.

      reply to this | link to this | view in chronology ]

  • icon
    William Jackson (profile), 18 Jul 2019 @ 11:40am

    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.

    reply to this | link to this | view in chronology ]

    • icon
      Anonymous Anonymous Coward (profile), 18 Jul 2019 @ 12:16pm

      Re: Seizure vs invalidate

      That would be a good start, but it doesn't help when generic manufacturers are paid to NOT make the pills. Preventing the coercion of those generic makers would also need to be stopped. And that is probably not all that needs to happen.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 19 Jul 2019 @ 6:44am

      Re: Seizure vs invalidate

      Given the present political scene, I would expect that after seizing said patent(s) the government would continue gouging patients and probably would increase the price even further laying blame upon something that is incapable of self defense.

      reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 18 Jul 2019 @ 12:30pm

    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.

    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.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Jul 2019 @ 1:17pm

      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.

      reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    Ceci est ne pas mon nom en l'ecran pour l'instant., 18 Jul 2019 @ 1:23pm

    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.

    reply to this | link to this | view in chronology ]

    • icon
      Toom1275 (profile), 18 Jul 2019 @ 4:10pm

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

      you shamelessly promote corporatism. Rest of the time you attack any plans to regulate or tax as stifling innovation and encroaching corporate "Rights".
      [Asserts facts not in evidence]
      (as always)

      reply to this | link to this | view in chronology ]

      • icon
        Federico (profile), 21 Jul 2019 @ 2:28am

        Crying wolf

        As Krugman recently noted, when every single day under the sun people cry "socialist!" at any proposal which would benefit most people, people start thinking that socialism is good for them.

        Ideas from the pre-1914 socialist toolbox are then going to be reconsidered even on the NYT editorials.

        reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 18 Jul 2019 @ 6:21pm

      Re:

      Blue sucking the cocks off big pharma, wow, who could have possibly seen that coming?

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Jul 2019 @ 6:03pm

    It is any wonder people go to Canada to buy their meds

    One cousin, before he died 23 years ago from congestive heart failure used to drive up to Canada to get his meds. Even with the cost of gas, food, and lodging, it was way cheaper for him to go to Canada to buy his meds.

    reply to this | link to this | view in chronology ]

  • icon
    Chris ODonnell (profile), 18 Jul 2019 @ 6:39pm

    See Insulin...

    My wife's insulin is $400 a vial. It was $40 a vial 10 years ago. Nothing has changed, other than the price. She knows a few people that fly to Canada and stock up on 2 months of supply insulin then fly back home.

    reply to this | link to this | view in chronology ]

    • identicon
      Robert Beckman, 19 Jul 2019 @ 5:41am

      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.

      reply to this | link to this | view in chronology ]

  • identicon
    Glenn, 19 Jul 2019 @ 1:31am

    Let's not forget the invaluable support provided by the insurance industry.

    reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    icon
    Zachary Hurst (profile), 19 Jul 2019 @ 3:07am

    Hartford, CT

    The rice purity test is a purity test from rice university (no shit) that gives you a purity score with 0 being least pure and 100 being most pure.

    reply to this | link to this | view in chronology ]

  • icon
    David (profile), 19 Jul 2019 @ 6:28am

    Phony prices

    In most cases, the prices are inflated to get as much money as possible from the insurance companies. I frequently see my insurance company pay 20 to 30 percent of the billed price of a drug and not get any pushback from the pharmacy.

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 19 Jul 2019 @ 9:16am

    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.

    reply to this | link to this | view in chronology ]


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