7 ms·

The killer detail (in the article) is that 1/3 of the (small) development cost of 40 million were borne by the Dutch tax payer. How did that patent end up in a

by wjnc 8y ago

The killer detail (in the article) is that 1/3 of the (small) development cost of 40 million were borne by the Dutch tax payer. How did that patent end up in a big pharma portfolio? Who funds this and what kind of shit lawyers and economists draw up the funding schemes that give away full intellectual property, only with a (historic) backstop for individual preparation? We need risked based co-funding, co-profiting (irregardless of wether it's governments or, say, insurers investing), a backstop on prices via qualy-s, relatively short patents, no gaming of patents via arbitrarily small changes, governments creating generics, ... And now I wake up.

rocqua 8y ago
> relatively short patents, no gaming of patents via arbitrarily small changes This, so much. I'd add no gaming of orphan drug patents. It's through the patent system that pharmaceuticals get their pricing power. http://sourceonhealthcare.org/orphan-drug-act-fostering-innovation-or-abuse/ http://sourceonhealthcare.org/orphan-drug-act-fostering-inno...
yread 8y ago
That's also not a silver bullet see CF where foundation funded research and sold the IP to pharma company for 3.3B$ and the patients were then charged 300k a year for it. https://philanthropynewsdigest.org/news/cystic-fibrosis-foundation-receives-3.3-billion-royalty-pay-out https://philanthropynewsdigest.org/news/cystic-fibrosis-foun...
- zaroth 8y ago
  I think you have cause and effect reversed. They helped fund the development of the new CF drug by Vertex, which Vertex sells for $300k. Because of the success of the drug, they were able to resell their royalty rights to another investor for $3.3 billion. Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. In the process they have created therapies which did not previously exist, saving and improving people’s lives. You can debate the profit motive (as your link mentions) but the Foundation considers this a massive win for their ability to fight CF and make CF sufferers lives better.
  - wjnc 8y ago
    The important question is... why is it ethical for a foundation to deliver a product at $300k/yr where the cost are borne by other people? [1] In my world that price would never be paid, since about €100k/yr would max out the qaly. They would still have their medicine albeit at a perhaps $1 billion profit / return on risk. I'll bet my ethical balls here that none of the small contributors to a CF foundation expect a billion dollar windfall to come out if there contribution, regardless the merits that billion goes to afterwards. [1] Some economic reductionism here: if you know the cash flow, you can project the value and the other way around. So if someone offers you 3 billion and you know the effect of the medicine and the number of patients, you can infer the price of the medicine. This to establish the (moral) link between the selling of the IP and the price.
    - zaroth 8y ago
      The pharmaceutical company Vertex sells the drug for $300k. Because CF Foundation helped fund the development, they get royalties, just like universities sometimes do when they help develop a drug. This is great for CF because it’s mostly the insurance companies (and therefore healthy people) who are bearing the costs of the treatment. So the CF Foundation is “forcing donatations” from the healthy populace through increased insurance premiums to bankroll their continued investments in treatments and such. I don’t know if that makes it any more or less ethical, but certainly if it were mostly individual CF patients on the hook for the $300k (in aggregate that is — I’m not saying that never happens) then it would make less sense for the CF Foundation as a strategy.
      - JKCalhoun 8y ago
        > This is great for CF because it’s mostly the insurance companies (and therefore healthy people) who are bearing the costs of the treatment. Don't we all bear the cost of treatment in the form of higher insurance costs because insurance companies are paying exorbitant prices on drugs (among other things)?
        dodobirdlord 8y ago
lordnacho 8y ago
The pharma will likely also be employing people who were trained on the public bankroll. Not sure what's reasonable there though, it's not like society owns your output because you had your education paid for.
- benj111 8y ago
  I'm not sure if we are thinking of different things, but in the UK I believe Drs and Nurses have to stay with the NHS (or at least not work for the private sector) for a certain period of time, if they got bursaries. That seems reasonable? Society benefits from their output, in return for paying for their education.
xorcist 8y ago
> How did that patent end up in a big pharma portfolio? While it may sound strange put that way, most universities spend a lot of time thinking about how spin off profitable companies from their research. It's a huge deal and public spending on research is often motivated like this. Universities and R&D companies have a codependent relationship and this is generally regarded as a good thing. The morally dubious outcome of this is that a lot of research ends up locked away as intellectual property of some private entity, but it's not easy to question.
- username223 8y ago
  > Universities and R&D companies have a codependent relationship and this is generally regarded as a good thing. Is it? At best, I'd say it's seen as a "necessary evil," where "evil" is much more certain than "necessary."
  - tomcam 8y ago
    It stinks, I agree. What economic/social arrangement has done a better job in drug innovation?
    - tirrit 8y ago
      Has there ever been made an effort with any other approach/arrangement, in modern times? Any sources on this, anyone?
    - username223 8y ago
      Publicly-funded research universities, along with the March of Dimes, funded the polio vaccine, which has almost entirely eliminated the disease, and was not patented.
  - xorcist 8y ago
    I think so. Funding research is difficult as it is, and the potential to leverage that spending to create jobs and tax income is important. It certainly helps that it concerns an highly qualified academic workforce. Most universities tend to keep people employed just to expedite the process.
rayiner 8y ago
> The killer detail (in the article) is that 1/3 of the (small) development cost of 40 million were borne by the Dutch tax payer. How did that patent end up in a big pharma portfolio? It says so in the first few paragraphs: Novartis licensed (bought) the right to sell the drug in Europe. The patents remain with the hospital. The hospital that developed the drug is a public hospital associated with a public university. So the government paid for development, and (indirectly) to government is benefitting from the license fees paid by Novartis. That is co-profiting.
- eecc 8y ago
  The article reads as follows: “Novartis bought the rights to Lutathera with a $3.9-billion-euro takeover of French company AAA last year.” Where exactly does it say that the patents have remained with the hospital?
  - fouc 8y ago
    Buying the rights means licensing the rights of the patent, otherwise it would've said "Novartis bought the patent to Lutathera"
    - sonnyblarney 8y ago
      "Buying the rights means licensing the rights of the patent" I don't think journalistic language necessarily so accurate. I don't think we can say for sure what changed hands in the transaction, but it should not matter anyhow. If they bought everything, then the total lifetime value of the asset would hopefully have been baked into the price.
      - Vinnl 8y ago
        There's an interesting Dutch article from January about how the rights ended up with this company [1]. It doesn't say anything about patents, but it does say (my translation): > The producer (AAA, later bought by Novartis) gets exclusive rights to sell the drug, for ten years in the EU, and for seven in the US. The only exception is hospital pharmacies preparing the drug for their own patients. [1] https://nos.nl/artikel/2266712-hoe-nederlands-kankeronderzoek-novartis-aan-miljarden-gaat-helpen.html https://nos.nl/artikel/2266712-hoe-nederlands-kankeronderzoe...

by wjnc 8y ago

rocqua 8y ago

> relatively short patents, no gaming of patents via arbitrarily small changes This, so much. I'd add no gaming of orphan drug patents. It's through the patent system that pharmaceuticals get their pricing power. http://sourceonhealthcare.org/orphan-drug-act-fostering-innovation-or-abuse/ http://sourceonhealthcare.org/orphan-drug-act-fostering-inno...

yread 8y ago

That's also not a silver bullet see CF where foundation funded research and sold the IP to pharma company for 3.3B$ and the patients were then charged 300k a year for it. https://philanthropynewsdigest.org/news/cystic-fibrosis-foundation-receives-3.3-billion-royalty-pay-out https://philanthropynewsdigest.org/news/cystic-fibrosis-foun...

zaroth 8y ago
I think you have cause and effect reversed. They helped fund the development of the new CF drug by Vertex, which Vertex sells for $300k. Because of the success of the drug, they were able to resell their royalty rights to another investor for $3.3 billion. Funds which they will use to drive massive amounts of additional R&D to make even better treatments at lower costs. In the process they have created therapies which did not previously exist, saving and improving people’s lives. You can debate the profit motive (as your link mentions) but the Foundation considers this a massive win for their ability to fight CF and make CF sufferers lives better.
- wjnc 8y ago
  The important question is... why is it ethical for a foundation to deliver a product at $300k/yr where the cost are borne by other people? [1] In my world that price would never be paid, since about €100k/yr would max out the qaly. They would still have their medicine albeit at a perhaps $1 billion profit / return on risk. I'll bet my ethical balls here that none of the small contributors to a CF foundation expect a billion dollar windfall to come out if there contribution, regardless the merits that billion goes to afterwards. [1] Some economic reductionism here: if you know the cash flow, you can project the value and the other way around. So if someone offers you 3 billion and you know the effect of the medicine and the number of patients, you can infer the price of the medicine. This to establish the (moral) link between the selling of the IP and the price.
  - zaroth 8y ago
    The pharmaceutical company Vertex sells the drug for $300k. Because CF Foundation helped fund the development, they get royalties, just like universities sometimes do when they help develop a drug. This is great for CF because it’s mostly the insurance companies (and therefore healthy people) who are bearing the costs of the treatment. So the CF Foundation is “forcing donatations” from the healthy populace through increased insurance premiums to bankroll their continued investments in treatments and such. I don’t know if that makes it any more or less ethical, but certainly if it were mostly individual CF patients on the hook for the $300k (in aggregate that is — I’m not saying that never happens) then it would make less sense for the CF Foundation as a strategy.
    - JKCalhoun 8y ago
      > This is great for CF because it’s mostly the insurance companies (and therefore healthy people) who are bearing the costs of the treatment. Don't we all bear the cost of treatment in the form of higher insurance costs because insurance companies are paying exorbitant prices on drugs (among other things)?
      - dodobirdlord 8y ago

lordnacho 8y ago

The pharma will likely also be employing people who were trained on the public bankroll. Not sure what's reasonable there though, it's not like society owns your output because you had your education paid for.

benj111 8y ago
I'm not sure if we are thinking of different things, but in the UK I believe Drs and Nurses have to stay with the NHS (or at least not work for the private sector) for a certain period of time, if they got bursaries. That seems reasonable? Society benefits from their output, in return for paying for their education.

xorcist 8y ago

> How did that patent end up in a big pharma portfolio? While it may sound strange put that way, most universities spend a lot of time thinking about how spin off profitable companies from their research. It's a huge deal and public spending on research is often motivated like this. Universities and R&D companies have a codependent relationship and this is generally regarded as a good thing. The morally dubious outcome of this is that a lot of research ends up locked away as intellectual property of some private entity, but it's not easy to question.

username223 8y ago
> Universities and R&D companies have a codependent relationship and this is generally regarded as a good thing. Is it? At best, I'd say it's seen as a "necessary evil," where "evil" is much more certain than "necessary."
- tomcam 8y ago
  It stinks, I agree. What economic/social arrangement has done a better job in drug innovation?
  - tirrit 8y ago
    Has there ever been made an effort with any other approach/arrangement, in modern times? Any sources on this, anyone?
  - username223 8y ago
    Publicly-funded research universities, along with the March of Dimes, funded the polio vaccine, which has almost entirely eliminated the disease, and was not patented.
- xorcist 8y ago
  I think so. Funding research is difficult as it is, and the potential to leverage that spending to create jobs and tax income is important. It certainly helps that it concerns an highly qualified academic workforce. Most universities tend to keep people employed just to expedite the process.

rayiner 8y ago

> The killer detail (in the article) is that 1/3 of the (small) development cost of 40 million were borne by the Dutch tax payer. How did that patent end up in a big pharma portfolio? It says so in the first few paragraphs: Novartis licensed (bought) the right to sell the drug in Europe. The patents remain with the hospital. The hospital that developed the drug is a public hospital associated with a public university. So the government paid for development, and (indirectly) to government is benefitting from the license fees paid by Novartis. That is co-profiting.

eecc 8y ago
The article reads as follows: “Novartis bought the rights to Lutathera with a $3.9-billion-euro takeover of French company AAA last year.” Where exactly does it say that the patents have remained with the hospital?
- fouc 8y ago
  Buying the rights means licensing the rights of the patent, otherwise it would've said "Novartis bought the patent to Lutathera"
  - sonnyblarney 8y ago
    "Buying the rights means licensing the rights of the patent" I don't think journalistic language necessarily so accurate. I don't think we can say for sure what changed hands in the transaction, but it should not matter anyhow. If they bought everything, then the total lifetime value of the asset would hopefully have been baked into the price.
    - Vinnl 8y ago
      There's an interesting Dutch article from January about how the rights ended up with this company [1]. It doesn't say anything about patents, but it does say (my translation): > The producer (AAA, later bought by Novartis) gets exclusive rights to sell the drug, for ten years in the EU, and for seven in the US. The only exception is hospital pharmacies preparing the drug for their own patients. [1] https://nos.nl/artikel/2266712-hoe-nederlands-kankeronderzoek-novartis-aan-miljarden-gaat-helpen.html https://nos.nl/artikel/2266712-hoe-nederlands-kankeronderzoe...