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About this weblog
Here we'll explore the nexus of legal rulings, Capitol Hill policy-making, technical standards development, and technological innovation that creates -- and will recreate -- the networked world as we know it. Among the topics we'll touch on: intellectual property conflicts, technical architecture and innovation, the evolution of copyright, private vs. public interests in Net policy-making, lobbying and the law, and more.

Disclaimer: the opinions expressed in this weblog are those of the authors and not of their respective institutions.

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In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline


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December 2, 2011

Will the Drugs IP World Ever Change?

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Posted by Alan Wexelblat

I promise I'll talk about drugs in a minute, but first I want to meta-introspect...

There are a lot of tabs I open in my Copyfight window. Most of them don't make it to posts because they're not well-enough developed for me to say something about, or because someone else is saying all I want to say about something. For example FOSSPatents has been dogging the Apple-Motorola patent suits story extensively. I confess I don't understand what Apple is up to here and nobody else seems to have anything clear to say about it.

As I mentioned the other day the grinding trench warfare in online music mostly bores and frustrates me. Look here, Ars Technica will tell you about yet another case in which the Cartel issued bogus takedown orders. This story could have been published any time since the DMCA became the law of the land and it would be essentially the same story. Props to Ars for continuing to cover it.

Then there are stories that never quite materialize, despite my hopes that they will. Earlier this year, news went out that some of the most popular (blockbuster big-selling) drugs were going to go off-patent this year. For much of the past two decades the drug industry has made huge profits off these blockbuster drugs - hundreds of billions - and patents have played a key role in protecting those profits. Patents prevent other companies from copying the drug and selling it cheaper or making a generic version. Drug companies have developed an elaborate rolling shell game of patenting in which they continue to protect their drugs by developing variants, improvements or new delivery mechanisms for the drug that can then be patented. A drug originally marketed (and patent-protected) as an injectable may then be re-patented and further protected in pill form or inhaler form.

The problem with this is that sometimes these medicines are essential, life-saving treatments and intellectual property ends up killing people. This is usually justified by the huge expenditures necessary to create and test a drug as well as shepherding it through the FDA approval process. The figures I've seen for that range from USD 800 million up to 2 billion dollars. Of course, I've also seen figures claiming that drug company spending on advertising and promotion dwarfs their spending on R&D, by up to 6:1. So I'm not wholly sympathetic to big drug companies crying poverty.

At around the same time the stories about drug patents ending hit there was an interesting item on my local PBS station, WBUR, about one-person drug companies. The idea here was that these companies - often a sole proprietorship of someone who had spent decades working at a larger pharma company - could provide a much cheaper way to get new drugs into the pipeline. You still need a big organization to run the large trial studies that the FDA requires, but the process of drug design, modeling, and small-scale testing can be done by renting lab space and equipment at about 1/10th the cost of a big company doing it.

Sadly, despite the promise of new ideas and cheaper ways to get things done, nothing much has materialized on this front. So the story sat in my unfinished file for months and probably would have been dumped if not for two related items that came through my news stream recently. The first is a nice little five-minute piece from PBS News Hour on the ways in which companies have dragged out the last bits of life from their patent-protected drugs and also the multi-billion dollar question: is the era of blockbusters over?

If it's true that drug companies can no longer depend on huge-selling drugs to prop up their profits then they may have no choice but to diversify and to farm out production steps to cheaper alternatives. 2011 didn't see any big changes, but I'm now wondering if 2012 may be the first year of an upheaval in the drug business such as we've seen this year in the publishing business.

And finally, I got a note from one of my favorite Congresscritters, Bernie Sanders on a proposal he's made in honor of World AIDS day: an alternative method for rewarding the work of drug developers, big or small.

At its heart a patent is a government-granted monopoly. It's a quid pro quo that's so fundamental it's even in the Constitution - you do these useful things and in return you get all these legal protections. But there's nothing to say we couldn't also have another quid pro quo, and that's what Sanders is proposing. Drug companies would forego their monopoly protection (which comes with no guarantee of income) in return for guaranteed income with no monopoly. Specifically, Sanders is proposing the government fund a $3 billion/year pool of prize money that would be outright awarded to innovators. Interestingly for us open-access types, Sanders is also proposing that at least 5% of that money be set aside for "any individual, business or nonprofit organization that openly shared information, data, materials or technology that contributed in a positive way to the development of new drugs."

In the current economic climate and political deathlock I doubt Sanders' proposal will go anywhere, but I am pleased to see at least some people thinking creatively about new ways to handle intellectual property in tricky circumstances.

And to my few readers who made it this far, thank you for suffering through with me. I'll try to make my posts more coherent as a general rule.

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