11 ms·

Without the guarantee of a patented marked up drug, would drug companies waste the same amount of money that they currently do on R&D? I'm of the opinion that w

Without the guarantee of a patented marked up drug, would drug companies waste the same amount of money that they currently do on R&D? I'm of the opinion that we would see a major slow down in drug innovation without patents. R&D is very wasteful and expensive. Patents prevent competition for a short period of time to help the business recoup losses from failed experiments and to deliver profits which serve as an incentive for more innovation.

koonsolo 10y ago
You are correct, for R&D that takes years, patents are stimulating innovation. For ideas that take a week to "invent", patents are probably stifling innovation instead of promoting it. Most software patents (if not all) fall into the 2nd category. That's why in Europe we don't have software patents, and rightly so. So it indeed depends on whether you are able to recover your R&D costs after going to market.
- ryandrake 10y ago
  Maybe tie the patent duration to some measure of how long the invention took to develop? An algorithm that took a day from napkin to filing for the patent? You get a day of protection. A drug that took 10 years to develop? You get 10 years. The difficulty there preventing companies from exaggerating about the time it took to develop. I suppose it's not too much to ask companies to show written evidence of the date that a specific invention process commenced.
wtetzner 10y ago
> Patents prevent competition for a short period of time to help the business recoup losses from failed experiments and to deliver profits which serve as an incentive for more innovation. Is 20 years a short period of time? It seems like we'd get most of the benefits with fewer drawbacks by just shortening the time patents are granted for.
- kortex 10y ago
  See my other comment. 20 years may be too long for some industries (software), but may not be long enough/ structured properly for R&D heavy industries like pharmaceuticals and biosciences. Biologics (all the -mab drugs, monoclonal antibodies, adalimumab Humira) are a treat because you have to share your methodology, but you do not have to share your cell culture line. Since the cell line itself needs to be approved, the me-too's have to go through ALL the trouble themselves.
- CuriouslyC 10y ago
  The problem is that there can be a significant amount of time between wanting to protect an idea and when you can effectively monetize that idea. It might take an inventor 10 years to work out the kinks in an invention and build a market for it to the point that they can really reap the rewards. I think anywhere between 10 and 20 years is a reasonable range. On the other hand, copyright terms are just bat-shit insane and needs to be scaled back tremendously.
dickbasedregex 10y ago
Why can't patents have a duration? If you're the first to come up with an idea, you get 5 years head start before competitors can use your patent for their own ends. If you never have the resources to materialize your idea or can't find a seat in the market, that's unfortunate but oh well. We can't keep allowing battery technology to be held back because Exxon bought up all the patents years ago. I don't believe patents, as they are, are doing very much toward their original goal. Right now, and perhaps this is my frustrated cynicism here, they just look like one more method for those with money to bully those without. Drugs fall into a problematic territory here. I don't know enough about big pharma to have an informed conversation but I feel like there are other options available to us. Pharma R&D is what is always, always, always trotted out as a defense for our absurd patent system. The whole world has to get shafted with a bad system because one industry can't figure out another way?
- marcoperaza 10y ago
  >Why can't patents have a duration? They do.
- kortex 10y ago
  A big part of the high price of drugs is that the pharmaceutical companies have essentially a mad dash to recoup the (m/b)illions of dollars spent on R&D and clinical trials. Patent process has to begin once the target is discovered (e.g. assayed). Now you have to do further assays (0.5-1y), non-clinical safety studies (0.5-2y), route scouting and scale up (a few months), several years of clinical trials, then scale up the process to manufacturing. You've just burned 5-8 years of your patent protection. You have 15 years or less to recoup the cost of not only this drug, but all others that failed to get through the pipeline (which can be as much as 5-to-1). Once it goes off patent, 80% of the sales of brand name can vanish [1]. Getting a generic approved is a fraction of the time and cost as getting the original through the pipeline. It's like P vs NP, since the FDA approval means publishing pretty much a how-to guide (synthesis route) and much of the safety data. You just have to demonstrate "our stuff is the same as the proven stuff". I've long been a proponent of "15 years from FDA approval" - this gives a reliable, predictable cushion, without having to predict clinical failure rates. More time can be spent on safety studies (NCSS) and less costly Phase I and II trials, ideally leading to safer and more effective drugs. There is still pressure to move quick, because as soon as the clinical trials start, other companies have access to the leads you are looking at, and can simulate the structure and look for similar leads. [1]https://www.forbes.com/2002/05/02/0502patents.html https://www.forbes.com/2002/05/02/0502patents.html
erikw 10y ago
I see this sentiment a lot- "yes patents are bad for individuals and from a macroeconomic perspective, but we need them so that Big Pharma can ultimately improve our quality of life." I wonder though, has anyone studied to see if that holds up? I suspect that our quality of life improvements come from infrastructure like access to safe drinking water, and general accessibility to medicines not protected by intellectual property monopolies.
- ethbro 10y ago
  > general accessibility to medicines not protected by intellectual property monopolies Could you provide some examples of these?
- aeorgnoieang 10y ago
  Yes, this has been studied. Pharmaceuticals are actually one of the few areas where patents and other IP protections do actually encourage innovation. For most areas tho the protections seem to be of (significantly) net negative utility.
cust0m 10y ago
A good part of R&D are not made with the companies money but with the taxpayers money, the company work on the 50% final part after the government took most of the risks.
frgtpsswrdlame 10y ago
We just need shorter patents. For example drug companies spend far more on marketing than they do on R&D and a substantial amount of the research that generates new drugs comes from government funded research (>50%). Also, it's been demonstrated that taxpayer funded research drives private R&D up. So if I was dictator, I'd make it illegal to advertise drugs on tv/radio/web, double the current government budget for drug development R&D and make medical patents expire much more quickly. (And maybe something to allow Americans to buy drugs from overseas markets? Not sure on that one yet)
- zebrafish 10y ago
  I'm a proponent of these ideas. Patent duration as a function of private capital spent? It would have to be immune to "profit-shifting" but maybe that could be a good alternative.
  - danielweber 10y ago
    You are getting close to advocating for "cost plus" which sounds really good to outsiders who are concerned about "too much profit" but have stunted every industry into which they have been deployed, and end up driving prices as suppliers look for ways to increase how much they spend. (The more they spend, the more profit they can make.) Look at the aerospace industry.
    - zebrafish 10y ago
      I'm not concerned about too much profit. I'm just concerned about stifling competition for too long. Patents feel like crony capitalism in some industries. After posting I did consider the lone software engineer who comes up with a great idea, creates an app, and his app is then copied by Google who has much better marketing and distribution resources. If patent duration was a function of investment in R&D, this software developer would be SOL because he invested little into his "eureka" idea.
- Thriptic 10y ago
  The government does not pay for development, they pay for a portion of basic research across all research areas (and it's nowhere near 50% of all research funds or drug research funds). The entire NIH budget is about 32 billion. Large pharma companies spent around 50 billion on R&D in 2010: http://www.nature.com/nrd/journal/v9/n3/full/nrd3078.html http://www.nature.com/nrd/journal/v9/n3/full/nrd3078.html The incredibly expensive pharma and device development costs are shouldered by industry. The government does not have the risk tolerance or patience for development. Right now a significant portion of the patent lifetime is spent with the drug in clinical trials unable to be sold. Shortening the patent lifetime would increase prices until the drug went generic, not decrease them,as companies would have less time to get ROI. The industry is much more complicated than you are making it out to be, and trying to make it unprofitable would not help innovation.
clarkmoody 10y ago
R&D is ultra-expensive in-part because of government regulation. So the government is playing both sides of the ball: + Pile up mountains of red tape through the FDA + Provide patent protections for those with enough money to wade through the red tape + Give R&D grants to companies with taxpayer money to take up the slack in their budget So since R&D is so expensive, only large companies can afford it, which is just fine for them: it keeps out competitors.
- cust0m 10y ago
  Yeah, in the actual system the government plays with the large companies to make big money on top of every single aspect in life of people.
- zebrafish 10y ago
  I think some regulation is needed though. I can't look at a generic white pill and tell whether it's oxycodone or acetaminophen. Also, I don't want to take your acetaminophen if it hasn't been proven that whatever is in it won't cause other more serious issues or that I've at least been adequately informed of those side-effects on the front-end. R&D is also in-part expensive because of the success rate of drug trials and the expertise necessary to conduct the experiments. I'm mostly a free-market proponent, but when a corporations own interests collide with the larger market's interests by killing or otherwise removing a large portion of the productive population from the workforce, I believe there should be regulation.
  - monort 10y ago
    This problem can be solved with a voluntary certification, just don't buy pills, that are not certified by government or some organization you trust.
    - duskwuff 10y ago
      Do you really think that sick people are in a position to look up who certified the drug they're taking?
lkrubner 10y ago
> R&D is very wasteful and expensive. Therefore the government should pay for all of it. In the USA, since 1970, funding for science has declined. If we could merely get funding back to the trend line of 1930 to 1970, then the government would certainly be able to cover this kind of research. More so, it is completely incoherent for anyone to argue "We should leave this to the private sector because the private sector is more efficient than the government, but this process is wasteful and so we must grant a monopoly to whoever is willing to do this." Rather, as soon as someone says "We must grant a monopoly" they are also saying "the private sector market place has failed" and therefore they are also implicitly saying "The government should do this."
- zebrafish 10y ago
  I'm definitely not in favor of granting more than a temporary monopoly to recoup losses and provide profit incentives. I just don't believe that the government should be in the business of drug research. If they fund all of it, they get to decide which drugs will be researched. Let's assume that these decisions are somehow shielded from the influence of politicians. What becomes your KPI for what to research? Profit? - we already have a system set up for that. Number of lives saved? - How do you balance quality of life improvements against mortality?
  - lkrubner 10y ago
    If you took 20 minutes, you could easily look up the answer to your questions. We already have a system, and it works well, it only needs more money. SSRIs (serotonin reuptake inhibitors), Viagra, and countless other blockbuster drugs grew out of government funded research.
- ufo 10y ago
  And government grants already contribute for a lot of the R&D spending on drug research.
namlem 10y ago
Drugs are the only industry where this really matters. The government can just offer research subsidies to make up for the reduced patent protections, and everyone would still be better off. It's silly to keep our broken patent system just for the pharmaceutical industry.
gerbilly 10y ago
>Without the guarantee of a patented marked up drug, would drug companies waste the same amount of money that they currently do on R&D? Maybe new drug development shouldn't be done by for profit companies at all. Have the government fund research institutes instead.
danjoc 10y ago
>I'm of the opinion that we would see a major slow down in drug innovation without patents. My observation is we've seen a major slowdown already. $600 epi-pens, Turing Pharmaceuticals, my cousin's psoriasis medication that went from $10 a tube last year to $700 a tube this year. There's no innovation left. It's on to price gouging now. Pulling their patents might not solve their lack of ability to innovate, but it should be of some help with the price gouging.
sqeaky 10y ago
I had exactly this argument with someone. It broke down to me figuring out where most of the new medicines are developed and it was something like 98%+ of medicines are developed by universities with public funds. Of "new" medicines developed by actual pharmaceutical companies about half are just jamming two medicines that ought to be safe together into one. Combine that with how most of the that R&D budget is to get drugs certified by the FDA and not to invent new ones and I fail to see how patents help the situation. It might be that without patents pharma companies might feel compelled to innovate more to stay ahead of their competition, but that is pure conjecture.
- arcanus 10y ago
  > It broke down to me figuring out where most of the new medicines are developed and it was something like 98%+ of medicines are developed by universities with public funds. Do you have a reference for this?

koonsolo 10y ago

You are correct, for R&D that takes years, patents are stimulating innovation. For ideas that take a week to "invent", patents are probably stifling innovation instead of promoting it. Most software patents (if not all) fall into the 2nd category. That's why in Europe we don't have software patents, and rightly so. So it indeed depends on whether you are able to recover your R&D costs after going to market.

ryandrake 10y ago
Maybe tie the patent duration to some measure of how long the invention took to develop? An algorithm that took a day from napkin to filing for the patent? You get a day of protection. A drug that took 10 years to develop? You get 10 years. The difficulty there preventing companies from exaggerating about the time it took to develop. I suppose it's not too much to ask companies to show written evidence of the date that a specific invention process commenced.

wtetzner 10y ago

> Patents prevent competition for a short period of time to help the business recoup losses from failed experiments and to deliver profits which serve as an incentive for more innovation. Is 20 years a short period of time? It seems like we'd get most of the benefits with fewer drawbacks by just shortening the time patents are granted for.

kortex 10y ago
See my other comment. 20 years may be too long for some industries (software), but may not be long enough/ structured properly for R&D heavy industries like pharmaceuticals and biosciences. Biologics (all the -mab drugs, monoclonal antibodies, adalimumab Humira) are a treat because you have to share your methodology, but you do not have to share your cell culture line. Since the cell line itself needs to be approved, the me-too's have to go through ALL the trouble themselves.
CuriouslyC 10y ago
The problem is that there can be a significant amount of time between wanting to protect an idea and when you can effectively monetize that idea. It might take an inventor 10 years to work out the kinks in an invention and build a market for it to the point that they can really reap the rewards. I think anywhere between 10 and 20 years is a reasonable range. On the other hand, copyright terms are just bat-shit insane and needs to be scaled back tremendously.

dickbasedregex 10y ago

Why can't patents have a duration? If you're the first to come up with an idea, you get 5 years head start before competitors can use your patent for their own ends. If you never have the resources to materialize your idea or can't find a seat in the market, that's unfortunate but oh well. We can't keep allowing battery technology to be held back because Exxon bought up all the patents years ago. I don't believe patents, as they are, are doing very much toward their original goal. Right now, and perhaps this is my frustrated cynicism here, they just look like one more method for those with money to bully those without. Drugs fall into a problematic territory here. I don't know enough about big pharma to have an informed conversation but I feel like there are other options available to us. Pharma R&D is what is always, always, always trotted out as a defense for our absurd patent system. The whole world has to get shafted with a bad system because one industry can't figure out another way?

marcoperaza 10y ago
>Why can't patents have a duration? They do.
kortex 10y ago
A big part of the high price of drugs is that the pharmaceutical companies have essentially a mad dash to recoup the (m/b)illions of dollars spent on R&D and clinical trials. Patent process has to begin once the target is discovered (e.g. assayed). Now you have to do further assays (0.5-1y), non-clinical safety studies (0.5-2y), route scouting and scale up (a few months), several years of clinical trials, then scale up the process to manufacturing. You've just burned 5-8 years of your patent protection. You have 15 years or less to recoup the cost of not only this drug, but all others that failed to get through the pipeline (which can be as much as 5-to-1). Once it goes off patent, 80% of the sales of brand name can vanish [1]. Getting a generic approved is a fraction of the time and cost as getting the original through the pipeline. It's like P vs NP, since the FDA approval means publishing pretty much a how-to guide (synthesis route) and much of the safety data. You just have to demonstrate "our stuff is the same as the proven stuff". I've long been a proponent of "15 years from FDA approval" - this gives a reliable, predictable cushion, without having to predict clinical failure rates. More time can be spent on safety studies (NCSS) and less costly Phase I and II trials, ideally leading to safer and more effective drugs. There is still pressure to move quick, because as soon as the clinical trials start, other companies have access to the leads you are looking at, and can simulate the structure and look for similar leads. [1]https://www.forbes.com/2002/05/02/0502patents.html https://www.forbes.com/2002/05/02/0502patents.html

erikw 10y ago

I see this sentiment a lot- "yes patents are bad for individuals and from a macroeconomic perspective, but we need them so that Big Pharma can ultimately improve our quality of life." I wonder though, has anyone studied to see if that holds up? I suspect that our quality of life improvements come from infrastructure like access to safe drinking water, and general accessibility to medicines not protected by intellectual property monopolies.

ethbro 10y ago
> general accessibility to medicines not protected by intellectual property monopolies Could you provide some examples of these?
aeorgnoieang 10y ago
Yes, this has been studied. Pharmaceuticals are actually one of the few areas where patents and other IP protections do actually encourage innovation. For most areas tho the protections seem to be of (significantly) net negative utility.

cust0m 10y ago

A good part of R&D are not made with the companies money but with the taxpayers money, the company work on the 50% final part after the government took most of the risks.

frgtpsswrdlame 10y ago

We just need shorter patents. For example drug companies spend far more on marketing than they do on R&D and a substantial amount of the research that generates new drugs comes from government funded research (>50%). Also, it's been demonstrated that taxpayer funded research drives private R&D up. So if I was dictator, I'd make it illegal to advertise drugs on tv/radio/web, double the current government budget for drug development R&D and make medical patents expire much more quickly. (And maybe something to allow Americans to buy drugs from overseas markets? Not sure on that one yet)

zebrafish 10y ago
I'm a proponent of these ideas. Patent duration as a function of private capital spent? It would have to be immune to "profit-shifting" but maybe that could be a good alternative.
- danielweber 10y ago
  You are getting close to advocating for "cost plus" which sounds really good to outsiders who are concerned about "too much profit" but have stunted every industry into which they have been deployed, and end up driving prices as suppliers look for ways to increase how much they spend. (The more they spend, the more profit they can make.) Look at the aerospace industry.
  - zebrafish 10y ago
    I'm not concerned about too much profit. I'm just concerned about stifling competition for too long. Patents feel like crony capitalism in some industries. After posting I did consider the lone software engineer who comes up with a great idea, creates an app, and his app is then copied by Google who has much better marketing and distribution resources. If patent duration was a function of investment in R&D, this software developer would be SOL because he invested little into his "eureka" idea.
Thriptic 10y ago
The government does not pay for development, they pay for a portion of basic research across all research areas (and it's nowhere near 50% of all research funds or drug research funds). The entire NIH budget is about 32 billion. Large pharma companies spent around 50 billion on R&D in 2010: http://www.nature.com/nrd/journal/v9/n3/full/nrd3078.html http://www.nature.com/nrd/journal/v9/n3/full/nrd3078.html The incredibly expensive pharma and device development costs are shouldered by industry. The government does not have the risk tolerance or patience for development. Right now a significant portion of the patent lifetime is spent with the drug in clinical trials unable to be sold. Shortening the patent lifetime would increase prices until the drug went generic, not decrease them,as companies would have less time to get ROI. The industry is much more complicated than you are making it out to be, and trying to make it unprofitable would not help innovation.

clarkmoody 10y ago

R&D is ultra-expensive in-part because of government regulation. So the government is playing both sides of the ball: + Pile up mountains of red tape through the FDA + Provide patent protections for those with enough money to wade through the red tape + Give R&D grants to companies with taxpayer money to take up the slack in their budget So since R&D is so expensive, only large companies can afford it, which is just fine for them: it keeps out competitors.

cust0m 10y ago
Yeah, in the actual system the government plays with the large companies to make big money on top of every single aspect in life of people.
zebrafish 10y ago
I think some regulation is needed though. I can't look at a generic white pill and tell whether it's oxycodone or acetaminophen. Also, I don't want to take your acetaminophen if it hasn't been proven that whatever is in it won't cause other more serious issues or that I've at least been adequately informed of those side-effects on the front-end. R&D is also in-part expensive because of the success rate of drug trials and the expertise necessary to conduct the experiments. I'm mostly a free-market proponent, but when a corporations own interests collide with the larger market's interests by killing or otherwise removing a large portion of the productive population from the workforce, I believe there should be regulation.
- monort 10y ago
  This problem can be solved with a voluntary certification, just don't buy pills, that are not certified by government or some organization you trust.
  - duskwuff 10y ago
    Do you really think that sick people are in a position to look up who certified the drug they're taking?

lkrubner 10y ago

> R&D is very wasteful and expensive. Therefore the government should pay for all of it. In the USA, since 1970, funding for science has declined. If we could merely get funding back to the trend line of 1930 to 1970, then the government would certainly be able to cover this kind of research. More so, it is completely incoherent for anyone to argue "We should leave this to the private sector because the private sector is more efficient than the government, but this process is wasteful and so we must grant a monopoly to whoever is willing to do this." Rather, as soon as someone says "We must grant a monopoly" they are also saying "the private sector market place has failed" and therefore they are also implicitly saying "The government should do this."

zebrafish 10y ago
I'm definitely not in favor of granting more than a temporary monopoly to recoup losses and provide profit incentives. I just don't believe that the government should be in the business of drug research. If they fund all of it, they get to decide which drugs will be researched. Let's assume that these decisions are somehow shielded from the influence of politicians. What becomes your KPI for what to research? Profit? - we already have a system set up for that. Number of lives saved? - How do you balance quality of life improvements against mortality?
- lkrubner 10y ago
  If you took 20 minutes, you could easily look up the answer to your questions. We already have a system, and it works well, it only needs more money. SSRIs (serotonin reuptake inhibitors), Viagra, and countless other blockbuster drugs grew out of government funded research.
ufo 10y ago
And government grants already contribute for a lot of the R&D spending on drug research.

namlem 10y ago

Drugs are the only industry where this really matters. The government can just offer research subsidies to make up for the reduced patent protections, and everyone would still be better off. It's silly to keep our broken patent system just for the pharmaceutical industry.

gerbilly 10y ago

>Without the guarantee of a patented marked up drug, would drug companies waste the same amount of money that they currently do on R&D? Maybe new drug development shouldn't be done by for profit companies at all. Have the government fund research institutes instead.

danjoc 10y ago

>I'm of the opinion that we would see a major slow down in drug innovation without patents. My observation is we've seen a major slowdown already. $600 epi-pens, Turing Pharmaceuticals, my cousin's psoriasis medication that went from $10 a tube last year to $700 a tube this year. There's no innovation left. It's on to price gouging now. Pulling their patents might not solve their lack of ability to innovate, but it should be of some help with the price gouging.

sqeaky 10y ago

I had exactly this argument with someone. It broke down to me figuring out where most of the new medicines are developed and it was something like 98%+ of medicines are developed by universities with public funds. Of "new" medicines developed by actual pharmaceutical companies about half are just jamming two medicines that ought to be safe together into one. Combine that with how most of the that R&D budget is to get drugs certified by the FDA and not to invent new ones and I fail to see how patents help the situation. It might be that without patents pharma companies might feel compelled to innovate more to stay ahead of their competition, but that is pure conjecture.

arcanus 10y ago
> It broke down to me figuring out where most of the new medicines are developed and it was something like 98%+ of medicines are developed by universities with public funds. Do you have a reference for this?