5 ms·

Some interesting points on the nature of our pharmaceutical patent system... (and while the cohort in this study does seem a bit small, the conclusions appear t

Some interesting points on the nature of our pharmaceutical patent system... (and while the cohort in this study does seem a bit small, the conclusions appear to be fairly valid): > "Molnupiravir was invented at Drug Innovations at Emory (DRIVE), LLC, a not-for-profit biotechnology company wholly owned by Emory University, and is being developed by Merck & Co., Inc. in collaboration with Ridgeback Biotherapeutics." > "In fiscal year 2019, more than half of Emory's total $689.1 million in research funding came from the federal government, the university's largest sponsor." Clearly, this patent should be assigned to the federal government, not to Merck, and anyone who wants to manufacture and distribute it should be able to do so under an non-exclusive federal licensing program. The transfer of intellectual property created by the public funds to private entities is simply a criminal ripoff of the taxpayer. [edit] Wait, was this a three-week clinical phase III trial? Seems massively expedited relative to other phase III trials? > "Phase 3: Just 33% of drugs make it past Phase 2 and into Phase 3, which tests the potential treatment in the largest number of people. This phase measures both safety and effectiveness with many volunteers, sometimes thousands. Phase 3 trials last from one to four years." Trial began on Sept 2 2021 apparently? 1. https://www.clinicaltrialsarena.com/news/merck-ridgeback-molnupiravir-trial/ https://www.clinicaltrialsarena.com/news/merck-ridgeback-mol...

OrvalWintermute 5y ago
We would need to examine the research proposals, and the data rights included in them, and if any other institutions providing matching funds, that resulted in this drug. Having said that, I broadly concur that we need to examine to what extent the federal government, and all of us taxpayers, should own outright some, or all as a % of the IP.
dbcooper 5y ago
Why do people here always want to reduce the equity and income of pharma and biotech scientists?
- mhb 5y ago
  It must be because they have extensively modeled the optimal societal benefit of reducing the financial incentive to these entities.
jrockway 5y ago
I don't think investing money necessarily transfers the ownership of things bought with that money to the investor. The government could put in their contract "we get all your drugs that you invent" if they wanted that. But this would be like startup VCs getting 100% of your company, or your bank getting the appreciation on your house when you sell it, etc. They could ask for those things, and you could say no... and most people do say no. The government wants to focus research into particular areas, not compete with the pharmaceutical companies. (At least the money isn't for making a new advertising platform, which is probably something a VC would fund in a heartbeat. Drug discovery is too risky for them.) You may disagree with that, but that's their intent. If you want the government to be discovering drugs and testing them, definitely tell your elected representatives that that's what you want, and the system can change. (Or get rich from an advertising platform and do it yourself! ;)
- avianlyric 5y ago
  Even the VCs get a better deal here, they end up with equity. If followed that model, then the taxpayer would own at least 50% of the patents generated (via shares the corporate entity that owned the patents). Under the current model the taxpayer gets nothing, which hardly seems reasonable given the amount of capital they provide.
  - BobbyJo 5y ago
    Don't we already own a portion of what gets created though? If Merck makes a boatload of money off of this, the taxpayers will indeed be taking a cut.
    - ipaddr 5y ago
      No we decided that corporate taxes should be low so the company can reinvest. The shareholders benefit.
    - callmeal 5y ago
      >If Merck makes a boatload of money off of this, the taxpayers will indeed be taking a cut. Merck's effective tax rate was 15% in 2019 and 20% in 2020[0] They make boatloads of money by underpaying their taxes [1]: In 2004 Merck disclosed that it might owe the U.S. Internal Revenue Service (IRS) some $2 billion after the agency notified the company that it was disallowing deductions Merck had taken since 1993 relating to a partnership set up in 2003 as a vehicle for obtaining financing for the acquisition of Medco. In 2006 the Wall Street Journal reported that Merck had set up a subsidiary in Bermuda that, in partnership with a British bank, was given title to the patents for the company’s blockbuster cholesterol drugs Zocor and Mevacor, thus saving Merck an estimated $1.5 billion in federal taxes over ten years. Shortly thereafter, Merck disclosed that it was embroiled in four separate tax disputes in the United States and Canada with total potential liabilities of more than $5 billion. In 2007 the IRS announced that Merck had agreed to pay $2.3 billion to settle its federal tax disputes. They also make additional boatloads of money overcharging Medicare/Medicaid: In 2008 Merck agreed to pay the federal government more than $650 million to settle charges that the company routinely overbilled Medicaid and other government programs and made illegal payments to healthcare professionals to induce them to prescribe its products. In December 2011 the Massachusetts attorney general announced that Merck would pay $24 million as its part of a $47 million settlement reached with 13 drugmakers to resolve allegations that they overcharged the state’s Medicaid program. In 2012 the Louisiana attorney general announced that Merck and four other companies would pay a total of $25.2 million to resolve allegations that they overcharged the state’s Medicaid program. [0] https://www.stock-analysis-on.net/NYSE/Company/Merck-Co-Inc/Analysis/Income-Taxes https://www.stock-analysis-on.net/NYSE/Company/Merck-Co-Inc/... [1] https://www.corp-research.org/merck https://www.corp-research.org/merck
inglor_cz 5y ago
Regarding your edit: there isn't any shortage of covid-exposed people right now. Often, trials lag because not enough participants fulfilling the criteria can be recruited. This is especially pronounced in rarer diseases. Plus, you will know outcomes of covid pretty quickly. Compared to diseases such as Alzheimer or multiple sclerosis, covid develops fast.
rich_sasha 5y ago
> Clearly, this patent should be assigned to the federal government, not to Merck How about a proportional slice? That would seem fair. IP and products can have fractional ownership.
- mhb 5y ago
  What does "fair" have to do with anything? Are you suggesting that your proposal maximizes the amount of health-improving interventions that society will receive in the future? Do you have any reason to conclude that what you're suggesting will be even a slight improvement?
  - loeg 5y ago
    As a taxpayer / healthcare consumer who is not employed in pharma -- yeah, it would be nice if we (the US) did a little less subsidizing of drug development for the rest of the world. Proportional ownership of sponsored drugs seems like a nicely aligned incentive. What am I missing?
    - mhb 5y ago
      I don't know how the pharma industry decides what to pursue, but it is at least plausible that part of the incentive for what they do depends on being able to price discriminate in sales to other countries. Before suggesting we tear down Chesterton's fence, it seems reasonable that you should have more justification than just that it seems fair to you.
      - loeg 5y ago
        I don't understand your concern -- how does proportional ownership eliminate pharma's ability to price discriminate? I just think the US government should receive some prorated portion of profits from drugs they subsidized development of, which can be reinvested into further development.
        mhb 5y ago
sjg007 5y ago
You can thank Bob Dole for that wrt patents from Federal research funds.
- mywittyname 5y ago
  TIL. I'm slowly learning that, when the government has a choice between and obvious, smart way of operating, and a clearly dumb way. They choose the dumb way because some chucklefucks in Congress made it illegal to operate the smart way.
  - sjg007 5y ago
    Not sure it's dumb... it's just the way... Academic institutions should be able to patent basic research. One would argue that the govt gets a 30% tax cut.. now maybe that's excluded since mosts schools are nonprofit but idk.
allturtles 5y ago
This is a consequence of the Bayh-Dole Act (https://en.wikipedia.org/wiki/Bayh%E2%80%93Dole_Act https://en.wikipedia.org/wiki/Bayh%E2%80%93Dole_Act).
ashtonkem 5y ago
The phase III trial was cut short at the recommendation of the independent monitoring board. Apparently the effect was so strong they recommended seeking Emergency Use Authorization earlier, rather than waiting for the trial to finish, presumably so that they could save more people’s lives who might get sick and die waiting for trials to finish.
parineum 5y ago
> Clearly, this patent should be assigned to the federal government, not to Merck Would Merck have done the research if they didn't get to own the patent?
- photochemsyn 5y ago
  Merck didn't do the research, Emory did the research. Now, maybe you're thinking, would Merck finance the clinical trial of like 1000 people if they didn't get exclusive licensing right to the Emory-owned patent? Well, perhaps in a non-exclusive licensing situation, other pharma outfits, or a consortion, or how about the federal government? would pay for the clinical trials. I'd guess this situation - competitive manufacturing - would result in a massive drop in the price of the drug for people who needed it.
  - parineum 5y ago
    > or how about the federal government This is the answer I was fishing for. If you want the government to own the patents, they should do the work. If they outsource some of the work in exchange for the patents, perhaps the work that they are outsourcing is specialized and difficult for them to achieve.
    - labawi 5y ago
      Say you owned the patent, the research was solid, high likelihood it would work, but needed a 1000 patient phase 3 trial and whatever, that you can't and don't know how to do. Would you "outsource"¹ the work for price of an exclusive right to make the drug? Would you ask for something in return? Remember, it is we - the people - that have the right and resources, and in our name our representatives distribute them to researchers and make the deals with salesmen. ¹ more like sell the businness * Personally not from US, wanted to show the framing. In any case, most research is an international effort, so maybe I shouldn't completely exclude myself.
disgruntledphd2 5y ago
The trial was stopped early because the results were overwhelmingly positive, and thus it was considered unethical to leave the placebo group untreated.

OrvalWintermute 5y ago

We would need to examine the research proposals, and the data rights included in them, and if any other institutions providing matching funds, that resulted in this drug. Having said that, I broadly concur that we need to examine to what extent the federal government, and all of us taxpayers, should own outright some, or all as a % of the IP.

dbcooper 5y ago

Why do people here always want to reduce the equity and income of pharma and biotech scientists?

mhb 5y ago
It must be because they have extensively modeled the optimal societal benefit of reducing the financial incentive to these entities.

jrockway 5y ago

I don't think investing money necessarily transfers the ownership of things bought with that money to the investor. The government could put in their contract "we get all your drugs that you invent" if they wanted that. But this would be like startup VCs getting 100% of your company, or your bank getting the appreciation on your house when you sell it, etc. They could ask for those things, and you could say no... and most people do say no. The government wants to focus research into particular areas, not compete with the pharmaceutical companies. (At least the money isn't for making a new advertising platform, which is probably something a VC would fund in a heartbeat. Drug discovery is too risky for them.) You may disagree with that, but that's their intent. If you want the government to be discovering drugs and testing them, definitely tell your elected representatives that that's what you want, and the system can change. (Or get rich from an advertising platform and do it yourself! ;)

avianlyric 5y ago
Even the VCs get a better deal here, they end up with equity. If followed that model, then the taxpayer would own at least 50% of the patents generated (via shares the corporate entity that owned the patents). Under the current model the taxpayer gets nothing, which hardly seems reasonable given the amount of capital they provide.
- BobbyJo 5y ago
  Don't we already own a portion of what gets created though? If Merck makes a boatload of money off of this, the taxpayers will indeed be taking a cut.
  - ipaddr 5y ago
    No we decided that corporate taxes should be low so the company can reinvest. The shareholders benefit.
  - callmeal 5y ago
    >If Merck makes a boatload of money off of this, the taxpayers will indeed be taking a cut. Merck's effective tax rate was 15% in 2019 and 20% in 2020[0] They make boatloads of money by underpaying their taxes [1]: In 2004 Merck disclosed that it might owe the U.S. Internal Revenue Service (IRS) some $2 billion after the agency notified the company that it was disallowing deductions Merck had taken since 1993 relating to a partnership set up in 2003 as a vehicle for obtaining financing for the acquisition of Medco. In 2006 the Wall Street Journal reported that Merck had set up a subsidiary in Bermuda that, in partnership with a British bank, was given title to the patents for the company’s blockbuster cholesterol drugs Zocor and Mevacor, thus saving Merck an estimated $1.5 billion in federal taxes over ten years. Shortly thereafter, Merck disclosed that it was embroiled in four separate tax disputes in the United States and Canada with total potential liabilities of more than $5 billion. In 2007 the IRS announced that Merck had agreed to pay $2.3 billion to settle its federal tax disputes. They also make additional boatloads of money overcharging Medicare/Medicaid: In 2008 Merck agreed to pay the federal government more than $650 million to settle charges that the company routinely overbilled Medicaid and other government programs and made illegal payments to healthcare professionals to induce them to prescribe its products. In December 2011 the Massachusetts attorney general announced that Merck would pay $24 million as its part of a $47 million settlement reached with 13 drugmakers to resolve allegations that they overcharged the state’s Medicaid program. In 2012 the Louisiana attorney general announced that Merck and four other companies would pay a total of $25.2 million to resolve allegations that they overcharged the state’s Medicaid program. [0] https://www.stock-analysis-on.net/NYSE/Company/Merck-Co-Inc/Analysis/Income-Taxes https://www.stock-analysis-on.net/NYSE/Company/Merck-Co-Inc/... [1] https://www.corp-research.org/merck https://www.corp-research.org/merck

inglor_cz 5y ago

Regarding your edit: there isn't any shortage of covid-exposed people right now. Often, trials lag because not enough participants fulfilling the criteria can be recruited. This is especially pronounced in rarer diseases. Plus, you will know outcomes of covid pretty quickly. Compared to diseases such as Alzheimer or multiple sclerosis, covid develops fast.

rich_sasha 5y ago

> Clearly, this patent should be assigned to the federal government, not to Merck How about a proportional slice? That would seem fair. IP and products can have fractional ownership.

mhb 5y ago
What does "fair" have to do with anything? Are you suggesting that your proposal maximizes the amount of health-improving interventions that society will receive in the future? Do you have any reason to conclude that what you're suggesting will be even a slight improvement?
- loeg 5y ago
  As a taxpayer / healthcare consumer who is not employed in pharma -- yeah, it would be nice if we (the US) did a little less subsidizing of drug development for the rest of the world. Proportional ownership of sponsored drugs seems like a nicely aligned incentive. What am I missing?
  - mhb 5y ago
    I don't know how the pharma industry decides what to pursue, but it is at least plausible that part of the incentive for what they do depends on being able to price discriminate in sales to other countries. Before suggesting we tear down Chesterton's fence, it seems reasonable that you should have more justification than just that it seems fair to you.
    - loeg 5y ago
      I don't understand your concern -- how does proportional ownership eliminate pharma's ability to price discriminate? I just think the US government should receive some prorated portion of profits from drugs they subsidized development of, which can be reinvested into further development.
      - mhb 5y ago

sjg007 5y ago

You can thank Bob Dole for that wrt patents from Federal research funds.

mywittyname 5y ago
TIL. I'm slowly learning that, when the government has a choice between and obvious, smart way of operating, and a clearly dumb way. They choose the dumb way because some chucklefucks in Congress made it illegal to operate the smart way.
- sjg007 5y ago
  Not sure it's dumb... it's just the way... Academic institutions should be able to patent basic research. One would argue that the govt gets a 30% tax cut.. now maybe that's excluded since mosts schools are nonprofit but idk.

allturtles 5y ago

This is a consequence of the Bayh-Dole Act (https://en.wikipedia.org/wiki/Bayh%E2%80%93Dole_Act https://en.wikipedia.org/wiki/Bayh%E2%80%93Dole_Act).

ashtonkem 5y ago

The phase III trial was cut short at the recommendation of the independent monitoring board. Apparently the effect was so strong they recommended seeking Emergency Use Authorization earlier, rather than waiting for the trial to finish, presumably so that they could save more people’s lives who might get sick and die waiting for trials to finish.

parineum 5y ago

> Clearly, this patent should be assigned to the federal government, not to Merck Would Merck have done the research if they didn't get to own the patent?

photochemsyn 5y ago
Merck didn't do the research, Emory did the research. Now, maybe you're thinking, would Merck finance the clinical trial of like 1000 people if they didn't get exclusive licensing right to the Emory-owned patent? Well, perhaps in a non-exclusive licensing situation, other pharma outfits, or a consortion, or how about the federal government? would pay for the clinical trials. I'd guess this situation - competitive manufacturing - would result in a massive drop in the price of the drug for people who needed it.
- parineum 5y ago
  > or how about the federal government This is the answer I was fishing for. If you want the government to own the patents, they should do the work. If they outsource some of the work in exchange for the patents, perhaps the work that they are outsourcing is specialized and difficult for them to achieve.
  - labawi 5y ago
    Say you owned the patent, the research was solid, high likelihood it would work, but needed a 1000 patient phase 3 trial and whatever, that you can't and don't know how to do. Would you "outsource"¹ the work for price of an exclusive right to make the drug? Would you ask for something in return? Remember, it is we - the people - that have the right and resources, and in our name our representatives distribute them to researchers and make the deals with salesmen. ¹ more like sell the businness * Personally not from US, wanted to show the framing. In any case, most research is an international effort, so maybe I shouldn't completely exclude myself.

disgruntledphd2 5y ago

The trial was stopped early because the results were overwhelmingly positive, and thus it was considered unethical to leave the placebo group untreated.