Part 2 continues along with a new viewpoint from Warren Kaplan on the benefits and drawbacks of medical patents, as well as a brief discussion about the bewildering practice of gene patents. Although Part 2 can be considered a standalone story, readers may also want to first peruse Part 1 which provides an introductory discussion to medical patents along with E. Richard Gold’s viewpoint on this hopefully interesting and occasionally complex topic.
Warren Kaplan’s Viewpoint: The Evidence on Whether Patents Impede Medical Innovation Is Ambiguous
The complicated debate about whether or not patents impede “downstream” medical care and “upstream” medical innovation is ultimately about access to such care and innovation, which are at opposite ends of a “chain” of biomedicine.
Access to Medical Care
Clinical research is costly, lengthy, and high-risk. Pharmaceutical companies apply for patents on new drugs to gain market exclusivity for a limited period. The aim of this exclusivity is to generate revenue from sales and recoup the substantial cost of drug development by collecting fees (“royalties”) from users of the patented technology. Pharmaceutical companies also fund their research from these fees. Patented pharmaceuticals cost more than identical medicines that are off-patent. Access to medicines is inhibited by high prices. Patents are a factor in inhibiting access to pharmaceutical treatment, particularly in low- and middle-income countries [8],[20]–[22].
For medical devices, large manufacturers continue to benefit from price increases on patent-protected devices. As with pharmaceuticals, iterative improvements in performance and safety of existing devices are typically patented. These patents can, in principle, create barriers to market entry for new competitors. Nonetheless, the literature on the impact of patents on access to medical devices is slim compared to that for pharmaceuticals.
The impact of gene patents on genetic testing has garnered much recent press and academic interest [23]–[26], including a lawsuit by the American Civil Liberties Union against Myriad Genetics charging that patents on two human genes associated with breast and ovarian cancer stifle research that could lead to cures [27]. The lawsuit argues that the patents on these genes are unconstitutional and invalid. But in fact, there is little in the way of consistent evidence to suggest that gene patents inhibit patient access to diagnostic tests, at least in the United States [24]. Even so, when Mildred Cho and colleagues interviewed 132 directors of clinical genetic testing laboratories, 53% of respondents reported that patents or licenses had impeded their ability to develop and provide genetic tests [28].
Patents are a critical factor affecting access to medical care, but they are not the only factor. Other factors influencing medical care include demand for a product and market size (e.g., a large market and high demand for a product might lead to considerable revenue for the company even at a lower price),
Access to Innovation
The proliferation of patents may block biomedical R&D because researchers are unable to obtain the many different permissions required (e.g., permission may be required to use patented reagents, to try a patented method, and/or use a patented device) [28]. This situation has been called the “anticommons” problem [29]—R&D is inhibited by the presence of many intellectual property owners’ exclusive and possibly conflicting rights over devices and methods needed to perform R&D on biomedical products.
However, there is little empirical evidence that an anticommons problem is impeding innovation. For example, the French Community Innovation Survey found that 14% of R&D collaborating firms had to abandon or delay their innovation projects because of difficulties in their partnerships (“cooperation failures”), and the survey explored reasons for such failures. Intellectual property rights were not a cause of cooperation failure—in fact, the authors found that “industries where firms are able to better appropriate their research results (through patents, models and secrecy) present lower rates of ‘cooperation failures’” [30].
In their analysis of how patents affect medical innovation in Australia, Dianne Nicol and Jane Nielsen concluded that “in general the Australian industry seems to be avoiding an anticommons situation, but the potential still exists for its emergence” [31]. In the US and Japan, there is also very little evidence of an anticommons problem preventing innovation [32]. John Walsh and colleagues surveyed 507 academic biomedical researchers, asking them about the impact of patents on access to the knowledge and material inputs that are used in subsequent research [33]. The authors concluded that “access to knowledge inputs is largely unaffected by patents.” A survey of 70 attorneys, scientists, and managers in the biomedical research industry did not find evidence of the anticommons problem [34].
In contrast, Stephen Meurer has shown that the anticommons problem prevented a group of about 100 academic biologists from building a worldwide human mutations database [35]. The biologists tried to trade their data for corporate support of the database. Although they received an offer of US$2.3 million, a deadlock occurred because most members of the group could not afford the information costs needed to reach a decision—a prediction of the anticommons.
Access to materials and/or data—such as cell lines, reagents, genetically modified animals, and unpublished information—can be restricted if these are owned by other researchers. In a survey of agricultural biologists [36], and based on my own experience in biotechnology, delayed or blocked access to such materials results from having to negotiate material transfer agreements (the University of California, Berkeley defines a material transfer agreement as “a contract that governs the transfer of tangible research materials between two organizations, when the recipient intends to use it for his or her own research purposes” [37]). Restrictions on access do not appear to depend on whether the material is itself patented [38]. Typically, no issued patents exist on such materials covered by these material transfer agreements. But it is the possibility of future patent protection and the desire on the part of the supplier to manage this uncertainty that slows down or even eliminates such transfers of technology.
Conclusion
What are we to make of all this? The actual evidence on whether patents impede innovation or inventiveness in biomedicine is, in a word, ambiguous. Yet firms clearly tend to avoid research projects for which there are many existing patents [39]. Both the process of determining which potentially relevant patents are important to a research project and the negotiations for access to them can delay, but less often kills, innovation. In industry and universities, researchers adopt strategies of “licensing, inventing around patents, going offshore, the development and use of public databases and research tools, court challenges and … using the technology without a license (i.e. infringement) to achieve their particular goals” [39].
This raises the question, What are these various “design around” actions manifestations of, if not actual patent blockages or threats of the same? We act as if the anticommons block to innovation is real. Perception is reality. Patents, or perhaps only the fear of their enforcement, inhibit biomedical innovation. If we knew how strong the inhibition really was, we would be having a different debate.
Part 3
Part 3 of this series will be published in the next few days.
Material adapted by CFisher from:
Gold ER, Kaplan W, Orbinski J, Harland-Logan S, N-Marandi S, (2010). Are Patents Impeding Medical Care and Innovation?. PLoS Med 7(1): e1000208. doi:10.1371/journal.pmed.1000208
References
Please see the original open access article for the extensive reference list. Numbered references in this current article match the references in the original article.
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