4 ms·

We'd probably have better and cheaper drugs without the patent system. If more companies can make and sell the same drug, more companies can also fund research.

by jaekwon 14y ago

We'd probably have better and cheaper drugs without the patent system. If more companies can make and sell the same drug, more companies can also fund research. Patents should be categorically banned.

pinaceae 14y ago
no. the upfront costs for pharma development are prohibitive. the chances of a new molecule making it through clinical trials is really small. the economic crisis has put a lot of emphasis on efficacy for inclusion on various formulary schemes, be it private ones like in the US or state-run ones like in EU. now you need an approved product that is also not only marginally better than existing stuff. just takes away some nasty side effect? no reimbursement for you, pharma-economics trumps this. so, you have run ups of 10 years to line up a single new drug. scientists, the whole approval chain, supply chain, etc. then you get approval and your drug is good enough to be reimbursed, hooray. as the FDA process is public, your generic competitors have been watching - now that you have proven everything, they can flood the market and can undercut you significantly as they do not need to recuperate the initial investment of 10 years. you have this happen once or twice and then say fuck it. let's play the lottery, better ROI. the whole patent system was invented for a reason. it makes perfect sense for pharma. abolish it there and drug development will only happen through government programs.
- loup-vaillant 14y ago
  We have problem A, which is alleviated by crutch B. Therefore, do not remove the crutch. No. If there is a problem with the FDA approval system, let's fix that. Unless it's even more hopeless than reforming (or abolishing) the patent system? > the whole patent system was invented for a reason. Yes, but it doesn't matter in the slightest. What matters is what the patent system actually does, and the consequences of removing it. Speaking of which: > abolish it there and drug development will only happen through government programs. Probably. However, it may not be so bad if we fix problem A, namely the FDA. Also see "Against Intellectual Monopoly"[1], which talks about the pharmaceutical industry in its 9th chapter. [1] http://www.dklevine.com/general/intellectual/againstfinal.htm http://www.dklevine.com/general/intellectual/againstfinal.ht...
  - pinaceae 14y ago
    I don't get your point. The FDA approval system is not the problem. It is scientific and one of the toughest approval processes worldwide. It has improved dramatically in the last 15 years. Speeding up the process would be dangerous as it is about human health and side effects take time to surface. You want to be really sure before you approve a new molecule. Contergan showed what can go wrong. And the FDA process being public is a good thing too. Transparency is important. Just like openly documented patent claims.
    - loup-vaillant 14y ago
      Okay, if we can't help it, let's have an expensive approval procedure. I'm willing to accept this cost is a necessary evil. That doesn't mean however that patents are the only solution. There are other forms of government interventions. We could make a Manhattan project dedicated at lengthening healthy life expectancy, for instance (who wouldn't like to live a few more healthy decades?). Or we could grant more money to private parties making promising claims. Or we could grant prizes for achieving particular goals (like finding a cure or a vaccine for such and such disease). > Transparency is important. Just like openly documented patent claims. The document is a good thing. The monopoly that goes with it is another matter. Promising a monopoly over inventions speed inventors up, but granting one such monopoly slows everyone else down. Plus the costs induced by the patent approval system, and litigations. I doubt this is a good trade-off.
  - rayiner 14y ago
    > We have problem A, which is alleviated by crutch B. It's not a crutch. It's "we have textbook market failure A, which is alleviated by textbook government intervention B; we can remove the intervention, but we have to substitute one of the other textbook interventions suitable for addressing market failures." > If there is a problem with the FDA approval system, let's fix that. First, the FDA approval system is a major but not the biggest cost in getting a new drug to market. Making it dramatically cheaper wouldn't eliminate the underlying problem. Second, the FDA process is thorough and therefore expensive for good reason. The drug market is problematic because its exceedingly difficult to trace a condition to a particular drug, and because conditions sometimes show up years after treatment with a particular drug. And the cost of letting a bad drug through is astronomical. A popular drug like Vioxx might be used by 50 million people worldwide. David Graham, and FDA scientist, estimated that Vioxx caused 90-140k preventable heart attacks, and estimated 25-55k preventable deaths from those heart attacks. What's the cost of this damage? How much would you have to be paid to have a heart attack? Remember the target demographic of Vioxx, middle aged men with decent jobs that provide health insurance to be able to afford an expensive medication, is one of the most expensive demographics in terms of lost income from premature death. Between premature deaths and heart attacks, the actual cost of the Vioxx mistake could be $50-$100 billion in the US. Merck had spectacular lawyers and ended up settling for a fraction of that, but that's the nature of class-action settlements--the tortfeasor only ever pays pennies on each dollar of damage their products cause. The public bears the rest of those costs.
- deleted 14y ago
  [deleted]
rayiner 14y ago
Think of this in more precise economic terms. Say it takes $X to develop an invention that produces $Y of social benefit. If the invention is cheaply and easily copyable, people won't invest the $X unless they can recoup at least $X + some profit out of the $Y of social benefit. It's a classic free-rider problem. It's the economic reason why we have government-funded defense instead of private defense.
- jaekwon 14y ago
  You're assuming that there exists some finite $X to develop some invention, as if you simply pour enough money into a problem, a solution will be found. This is faulty logic. There is no direct correlation between money spent to develop, and outcome of desired invention/solution. Name one disease that needs to be treated/cured, and how much more money needs to be spent on R&D to find the solution. Nobody can do that. Ergo, your math does not apply. When you let free-riding happen, (e.g. ban patents and allow copying of inventions, not to be confused with copying of brand), you let grass-roots innovation happen. More people get to understand the problem domain, more cheaply than any monopoly can manage.
InclinedPlane 14y ago
This is borne out of a massive incorrect assessment of the pharmaceutical industry. It takes a tremendous amount of money to bring a drug to market, billions. More if you count all of the drugs that are tried but fail to meet expectations (of efficacy or safety). If you don't allow drug makers a window of time in which to make back their R&D costs through high profit margins then you simply will not see as many new drugs developed.
- jkn 14y ago
  That's a rather one sided view of the problem. Just because patents presently allow the pharmaceutical industry to fund R&D costs (estimates of which might be inflated[1]) does not mean they are the only way. If the cost of patents outweigh this one benefit, we should get rid of them. First, not all research is done by the pharmaceutical industry. In the US, they account for about 36% of research spending[2], behind the government (38%, federal plus state plus local). Note that total funding by the industry (not limited to pharma but including biotech and medical devices) represented 58% in 2007 but the role of patents in those industries is a different debate. The remaining 4% are from foundations and charities. Next, considering that pharmaceutical companies spend far more on marketing than research and development (typically 25% vs 15% of revenues respectively)[3] and considering that a large part of their revenues comes from public healthcare anyway, one can wonder how hard it would be to replace their R&D spendings with public funds, and get the money back thanks to cheaper drugs,since generics are typically 20% of the brand price. (BTW I wonder what part of these 15% of revenues spent on R&D is for important research and what part is spent on looking for the next Botox) Also patents could be replaced with public funding in ways that minimize the impact on the industry, for example by granting prizes for the discovery of important drugs. [1] http://news.ycombinator.com/item?id=4591766 http://news.ycombinator.com/item?id=4591766 [2] http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3118092/ http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3118092/ [3] http://www.plosmedicine.org/article/info:doi/10.1371/journal.pmed.0050001?imageURI=info:doi/10.1371/journal.pmed.0050001.t001 http://www.plosmedicine.org/article/info:doi/10.1371/journal...
  - rayiner 14y ago
    I don't think InclinedPlane was arguing that there aren't other ways to do drug research. Patents are just one solution to the free rider problem, and pretty much every free rider problem lends itself to the same small set of solutions: propertization, regulation, or subsidization. We address the free rider problem in drug development by giving temporary property rights in drug formulas, but we could just as easily regulate the industry and guarantee a rate of return or publicly fund development.

by jaekwon 14y ago

pinaceae 14y ago

no. the upfront costs for pharma development are prohibitive. the chances of a new molecule making it through clinical trials is really small. the economic crisis has put a lot of emphasis on efficacy for inclusion on various formulary schemes, be it private ones like in the US or state-run ones like in EU. now you need an approved product that is also not only marginally better than existing stuff. just takes away some nasty side effect? no reimbursement for you, pharma-economics trumps this. so, you have run ups of 10 years to line up a single new drug. scientists, the whole approval chain, supply chain, etc. then you get approval and your drug is good enough to be reimbursed, hooray. as the FDA process is public, your generic competitors have been watching - now that you have proven everything, they can flood the market and can undercut you significantly as they do not need to recuperate the initial investment of 10 years. you have this happen once or twice and then say fuck it. let's play the lottery, better ROI. the whole patent system was invented for a reason. it makes perfect sense for pharma. abolish it there and drug development will only happen through government programs.

loup-vaillant 14y ago
We have problem A, which is alleviated by crutch B. Therefore, do not remove the crutch. No. If there is a problem with the FDA approval system, let's fix that. Unless it's even more hopeless than reforming (or abolishing) the patent system? > the whole patent system was invented for a reason. Yes, but it doesn't matter in the slightest. What matters is what the patent system actually does, and the consequences of removing it. Speaking of which: > abolish it there and drug development will only happen through government programs. Probably. However, it may not be so bad if we fix problem A, namely the FDA. Also see "Against Intellectual Monopoly"[1], which talks about the pharmaceutical industry in its 9th chapter. [1] http://www.dklevine.com/general/intellectual/againstfinal.htm http://www.dklevine.com/general/intellectual/againstfinal.ht...
- pinaceae 14y ago
  I don't get your point. The FDA approval system is not the problem. It is scientific and one of the toughest approval processes worldwide. It has improved dramatically in the last 15 years. Speeding up the process would be dangerous as it is about human health and side effects take time to surface. You want to be really sure before you approve a new molecule. Contergan showed what can go wrong. And the FDA process being public is a good thing too. Transparency is important. Just like openly documented patent claims.
  - loup-vaillant 14y ago
    Okay, if we can't help it, let's have an expensive approval procedure. I'm willing to accept this cost is a necessary evil. That doesn't mean however that patents are the only solution. There are other forms of government interventions. We could make a Manhattan project dedicated at lengthening healthy life expectancy, for instance (who wouldn't like to live a few more healthy decades?). Or we could grant more money to private parties making promising claims. Or we could grant prizes for achieving particular goals (like finding a cure or a vaccine for such and such disease). > Transparency is important. Just like openly documented patent claims. The document is a good thing. The monopoly that goes with it is another matter. Promising a monopoly over inventions speed inventors up, but granting one such monopoly slows everyone else down. Plus the costs induced by the patent approval system, and litigations. I doubt this is a good trade-off.
- rayiner 14y ago
  > We have problem A, which is alleviated by crutch B. It's not a crutch. It's "we have textbook market failure A, which is alleviated by textbook government intervention B; we can remove the intervention, but we have to substitute one of the other textbook interventions suitable for addressing market failures." > If there is a problem with the FDA approval system, let's fix that. First, the FDA approval system is a major but not the biggest cost in getting a new drug to market. Making it dramatically cheaper wouldn't eliminate the underlying problem. Second, the FDA process is thorough and therefore expensive for good reason. The drug market is problematic because its exceedingly difficult to trace a condition to a particular drug, and because conditions sometimes show up years after treatment with a particular drug. And the cost of letting a bad drug through is astronomical. A popular drug like Vioxx might be used by 50 million people worldwide. David Graham, and FDA scientist, estimated that Vioxx caused 90-140k preventable heart attacks, and estimated 25-55k preventable deaths from those heart attacks. What's the cost of this damage? How much would you have to be paid to have a heart attack? Remember the target demographic of Vioxx, middle aged men with decent jobs that provide health insurance to be able to afford an expensive medication, is one of the most expensive demographics in terms of lost income from premature death. Between premature deaths and heart attacks, the actual cost of the Vioxx mistake could be $50-$100 billion in the US. Merck had spectacular lawyers and ended up settling for a fraction of that, but that's the nature of class-action settlements--the tortfeasor only ever pays pennies on each dollar of damage their products cause. The public bears the rest of those costs.
deleted 14y ago
[deleted]

rayiner 14y ago

Think of this in more precise economic terms. Say it takes $X to develop an invention that produces $Y of social benefit. If the invention is cheaply and easily copyable, people won't invest the $X unless they can recoup at least $X + some profit out of the $Y of social benefit. It's a classic free-rider problem. It's the economic reason why we have government-funded defense instead of private defense.

jaekwon 14y ago
You're assuming that there exists some finite $X to develop some invention, as if you simply pour enough money into a problem, a solution will be found. This is faulty logic. There is no direct correlation between money spent to develop, and outcome of desired invention/solution. Name one disease that needs to be treated/cured, and how much more money needs to be spent on R&D to find the solution. Nobody can do that. Ergo, your math does not apply. When you let free-riding happen, (e.g. ban patents and allow copying of inventions, not to be confused with copying of brand), you let grass-roots innovation happen. More people get to understand the problem domain, more cheaply than any monopoly can manage.

InclinedPlane 14y ago

This is borne out of a massive incorrect assessment of the pharmaceutical industry. It takes a tremendous amount of money to bring a drug to market, billions. More if you count all of the drugs that are tried but fail to meet expectations (of efficacy or safety). If you don't allow drug makers a window of time in which to make back their R&D costs through high profit margins then you simply will not see as many new drugs developed.

jkn 14y ago
That's a rather one sided view of the problem. Just because patents presently allow the pharmaceutical industry to fund R&D costs (estimates of which might be inflated[1]) does not mean they are the only way. If the cost of patents outweigh this one benefit, we should get rid of them. First, not all research is done by the pharmaceutical industry. In the US, they account for about 36% of research spending[2], behind the government (38%, federal plus state plus local). Note that total funding by the industry (not limited to pharma but including biotech and medical devices) represented 58% in 2007 but the role of patents in those industries is a different debate. The remaining 4% are from foundations and charities. Next, considering that pharmaceutical companies spend far more on marketing than research and development (typically 25% vs 15% of revenues respectively)[3] and considering that a large part of their revenues comes from public healthcare anyway, one can wonder how hard it would be to replace their R&D spendings with public funds, and get the money back thanks to cheaper drugs,since generics are typically 20% of the brand price. (BTW I wonder what part of these 15% of revenues spent on R&D is for important research and what part is spent on looking for the next Botox) Also patents could be replaced with public funding in ways that minimize the impact on the industry, for example by granting prizes for the discovery of important drugs. [1] http://news.ycombinator.com/item?id=4591766 http://news.ycombinator.com/item?id=4591766 [2] http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3118092/ http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3118092/ [3] http://www.plosmedicine.org/article/info:doi/10.1371/journal.pmed.0050001?imageURI=info:doi/10.1371/journal.pmed.0050001.t001 http://www.plosmedicine.org/article/info:doi/10.1371/journal...
- rayiner 14y ago
  I don't think InclinedPlane was arguing that there aren't other ways to do drug research. Patents are just one solution to the free rider problem, and pretty much every free rider problem lends itself to the same small set of solutions: propertization, regulation, or subsidization. We address the free rider problem in drug development by giving temporary property rights in drug formulas, but we could just as easily regulate the industry and guarantee a rate of return or publicly fund development.