11 ms·

Patents that kill

61 points by graeham 12y ago

richardwigley 12y ago
"A clinical trial for patients with metastatic prostate cancer lasts only three years compared to an 18-year-long trial for those suffering from a milder, localised prostate cancer. Since a typical patent is in force for 20 years, firms only have two years of effective patent length left to commercialise a new drug against localised prostate cancer. The data paint a bleak picture. The economists find that pharmaceutical companies conduct 30 times more clinical trials for recurrent cancer drugs than for preventive drugs"
- maxxxxx 12y ago
  How do you conduct a trial for a preventive drug? Just wondering.
  - hga 12y ago
    Your control group during the trial gets placebos, and you compare how many contracted the thing you're trying to prevent in two groups. In some ways simpler than the control group getting the best current treatment, in which case you have to compare the efficacy in both groups.
  - arjie 12y ago
    Presumably you would have to do a longitudinal study (could be an RCT or cohort or something else). If I think about it, it seems like studying how long a vaccine is effective for is a similar problem.
  - richardwigley 12y ago
    (While we wait for expert views) I would say it was no different from any other medical trial (you would have two populations, one getting a treatment and one not getting it, and you would observe them and see if there was a statistically difference) - With a preventative drug you would be looking for people getting cancer - this is a rare event (and so need more people under observation) and would take many years before you had a marked difference in the two populations. Compare this with late stage cancer trial where you are monitoring people dying - this is going to, unfortunately for the people under observation, give you a much quicker 'outcome'.
  - TheLoneWolfling 12y ago
    Give a bunch of people the drug and a bunch of people a placebo, wait a long time (decade+), see if there is a statistically-significant decrease in the thing that it is trying to prevent.
    - maxxxxx 12y ago
      It seems quite difficult to set this up. Who wants to take an experimental drug for decades? And if it's a rare disease you need a lot of people.
  - chris_va 12y ago
    Vaccine trials are essentially this. You give some percentage of the population the vaccine, and you compare their survival rates to the rest of the population.
- danielweber 12y ago
  30 times more clinical trials for recurrent cancer drugs than for preventive drugs How do the economists know that it's for economic reasons? Maybe it's a lot easier to theorize and conduct trials for one class of drugs versus the other.
  - carbocation 12y ago
    On a logistical level, it's much easier to start a 3-year trial than a 30-year trial. Tracking people for 30 years is more challenging. Giving an experimental drug to healthy people for 30 years is challenging and ethically more delicate. But perhaps from the view of the scientists, motivating yourself to perform a trial that won't yield results for 30 years is quite an effort.
dalek2point3 12y ago
here is the original paper in case anyone's interested: http://www.nber.org/papers/w19430 http://www.nber.org/papers/w19430 And here is the abstract: Patents award innovators a fixed period of market exclusivity, e.g., 20 years in the United States. Yet, since in many industries firms file patents at the time of discovery (“invention”) rather than first sale (“commercialization”), effective patent terms vary: inventions that commercialize at the time of invention receive a full patent term, whereas inventions that have a long time lag between invention and commercialization receive substantially reduced - or in extreme cases, zero - effective patent terms. We present a simple model formalizing how this variation may distort research and development (R&D). We then explore this distortion empirically in the context of cancer R&D, where clinical trials are shorter - and hence, effective patent terms longer - for drugs targeting late-stage cancer patients, relative to drugs targeting early-stage cancer patients or cancer prevention. Using a newly constructed data set on cancer clinical trial investments, we provide several sources of evidence consistent with fixed patent terms distorting cancer R&D. Back-of-the-envelope calculations suggest that the number of life-years at stake is large. We discuss three specific policy levers that could eliminate this distortion - patent design, targeted R&D subsidies, and surrogate (non-mortality) clinical trial endpoints - and provide empirical evidence that surrogate endpoints can be effective in practice.
tbrownaw 12y ago
Why is (well, should. Literal "is" is reasonably clear) drug exclusivity handled separately from drug approval? Since the one is needed to make up for the costs imposed by the other, shouldn't they be handled as a unit under the same agency?
arikrak 12y ago
In general, regular capitalism is best for progress, since government-funded operations don't have the same incentive to succeed, to avoid waste, etc. However, for something like developing drugs, it may be worthwhile to have more government involvement. The article mentions how drug companies can focus on their profits to the detriment of society. One might even wonder if the Hepatitis C cure was priced so that not everyone could afford it, so the disease wouldn't be eliminated...
- danielweber 12y ago
  1. The drug industry not creating a drug doesn't stop a charity from developing it. (Bill Gates once wanted a drug developed that didn't have enough of a market, so his foundation paid out of pocket for it.) It's not "to the detriment of society" for them to pursue their own ends, and more than it is "to the detriment of society" that I'm typing away on HN instead of being outside picking up trash. 2. Conspiracy theories about keeping diseases around are misfounded. a) The drug in only effective in EDIT 97% of people. b) The patent will eventually expire. c) The price for the drug is cheaper than the lifetime cost of treatment, making it a win-win scenario. (Plus the eventual expiration of the patent will make this very cheap in the long term.)
  - carbocation 12y ago
    Nitpick: the sofosbuvir trials show ~97% effectiveness, not 80%.
  - dnautics 12y ago
    1) For example, the polio vaccines, which were developed and even whose distribution by the private non-profit that is now (the somewhat corrupt) March of Dimes. Incidentally, the polio vaccines weren't patented, either.
  - arikrak 12y ago
    97% is pretty high, but I agree that it's not too likely that's the drug company's plans. Note that the government grants the drug company a monopoly to sell their drug, so it makes sense to place some limitations on pricing, or at least negotiate like other government do.
danielweber 12y ago
This is arguing for longer patents for drugs, since the 20-year-long patent causes the industry to only look for drugs where you can get through development and trials quickly enough that they enough years left on the patent to make revenue.
michaelq 12y ago
The simplest solution would be to significantly shorten the patent duration for pharmaceuticals, and start it the day a drug gets FDA approval. This would uncouple two things that should have never been coupled in the first place: development time and window of exclusivity in the market.
- xaa 12y ago
  Companies would (justifiably) still want provisional patent protection for the very long period between the idea's conception and FDA approval, to reduce the risk on their huge investment. Thus, wouldn't this idea exacerbate the already rampant abuse of provisional patents? Or if long provisional patents weren't allowed, then companies probably would avoid products with long FDA approval times, which is the very problem you're trying to solve.
  - skybrian 12y ago
    Early-phase development would be better funded through a different mechanism. (For example, prizes for key achievements.)
    - xaa 12y ago
      It already is, because the way many drugs are developed is that the NIH funds the basic research behind it, and early-stage in-vitro trials and maybe some mouse trials. Usually it is only when the drug is ready for clinical trials that pharma steps in (doing 20% of the work and claiming 100% of the profit).
  - michaelq 12y ago
    I imagine the costs of trials, and who paid them, are well documented. In the event of a dispute about which company discovered which drug, could a company not point to its investment in research or funding of a specific trial as evidence of its discovery, rather than trying to spam system with provisional patent applications? (By the way, there's no such thing as a "provisional patent" http://en.wikipedia.org/wiki/Provisional_patent#cite_note-1 http://en.wikipedia.org/wiki/Provisional_patent#cite_note-1)
dnautics 12y ago
It keeps annoying me that nearly everyone (including Richard Posner [0] and notch [1]) says that 'medicine makes for the best case for patents'. I'm not convinced that patents are necessary for pharmaceuticals, and I'm trying to prove that's the case [2]. [0] http://www.theatlantic.com/business/archive/2012/07/why-there-are-too-many-patents-in-america/259725/ http://www.theatlantic.com/business/archive/2012/07/why-ther... [1] http://notch.tumblr.com/post/27751395263/on-patents http://notch.tumblr.com/post/27751395263/on-patents [2] http://indysci.org/projectmarilyn http://indysci.org/projectmarilyn
- pessimizer 12y ago
  I don't know if you're familiar with Dean Baker: "Patent monopolies are one mechanism to provide an incentive for innovation, however they are a tremendously inefficient mechanism." http://www.cepr.net/index.php/blogs/beat-the-press/health-care-costs-dont-blame-the-free-market http://www.cepr.net/index.php/blogs/beat-the-press/health-ca... http://www.cepr.net/index.php/Publications/Reports/financing-drug-research-what-are-the-issues http://www.cepr.net/index.php/Publications/Reports/financing...
  - dnautics 12y ago
    thank you for those links. Incidentally Drew Curtis also outlines the dichotomy in policy pressures really well. http://www.ted.com/talks/drew_curtis_how_i_beat_a_patent_troll http://www.ted.com/talks/drew_curtis_how_i_beat_a_patent_tro... I'm surprised that the first link of yours doesn't show the fact that Pharma companies make upwards of 10-16% margin which is high for the healthcare sector, versus Generics companies which make ~5%, in line with "companies in general"; and insurance companies which pre-ACA were making negative-~2% margins. It's hard not to believe that the ACA was just a bailout for insurance companies, in exchange for mild vilification.
    - pessimizer 12y ago
      >I'm surprised that the first link of yours doesn't show the fact https://encrypted.google.com/search?hl=en&q=medical%20patent%20site%3Acepr.net https://encrypted.google.com/search?hl=en&q=medical%20patent... Dean Baker has written a lot on patents in medicine, and in other fields as well. It would probably be interesting for you.
technotony 12y ago
The solution to this is regulatory exclusivity. The big cost is going through the FDA process, companies could simply be granted a 15 year exclusivity once they've passed that bar. The FDA already has a process setup for granting this.
- deleted 12y ago
  [deleted]

61 points by graeham 12y ago

"A clinical trial for patients with metastatic prostate cancer lasts only three years compared to an 18-year-long trial for those suffering from a milder, localised prostate cancer. Since a typical patent is in force for 20 years, firms only have two years of effective patent length left to commercialise a new drug against localised prostate cancer. The data paint a bleak picture. The economists find that pharmaceutical companies conduct 30 times more clinical trials for recurrent cancer drugs than for preventive drugs"

maxxxxx 12y ago
How do you conduct a trial for a preventive drug? Just wondering.
- hga 12y ago
  Your control group during the trial gets placebos, and you compare how many contracted the thing you're trying to prevent in two groups. In some ways simpler than the control group getting the best current treatment, in which case you have to compare the efficacy in both groups.
- arjie 12y ago
  Presumably you would have to do a longitudinal study (could be an RCT or cohort or something else). If I think about it, it seems like studying how long a vaccine is effective for is a similar problem.
- richardwigley 12y ago
  (While we wait for expert views) I would say it was no different from any other medical trial (you would have two populations, one getting a treatment and one not getting it, and you would observe them and see if there was a statistically difference) - With a preventative drug you would be looking for people getting cancer - this is a rare event (and so need more people under observation) and would take many years before you had a marked difference in the two populations. Compare this with late stage cancer trial where you are monitoring people dying - this is going to, unfortunately for the people under observation, give you a much quicker 'outcome'.
- TheLoneWolfling 12y ago
  Give a bunch of people the drug and a bunch of people a placebo, wait a long time (decade+), see if there is a statistically-significant decrease in the thing that it is trying to prevent.
  - maxxxxx 12y ago
    It seems quite difficult to set this up. Who wants to take an experimental drug for decades? And if it's a rare disease you need a lot of people.
- chris_va 12y ago
  Vaccine trials are essentially this. You give some percentage of the population the vaccine, and you compare their survival rates to the rest of the population.
danielweber 12y ago
30 times more clinical trials for recurrent cancer drugs than for preventive drugs How do the economists know that it's for economic reasons? Maybe it's a lot easier to theorize and conduct trials for one class of drugs versus the other.
- carbocation 12y ago
  On a logistical level, it's much easier to start a 3-year trial than a 30-year trial. Tracking people for 30 years is more challenging. Giving an experimental drug to healthy people for 30 years is challenging and ethically more delicate. But perhaps from the view of the scientists, motivating yourself to perform a trial that won't yield results for 30 years is quite an effort.

dalek2point3 12y ago

here is the original paper in case anyone's interested: http://www.nber.org/papers/w19430 http://www.nber.org/papers/w19430 And here is the abstract: Patents award innovators a fixed period of market exclusivity, e.g., 20 years in the United States. Yet, since in many industries firms file patents at the time of discovery (“invention”) rather than first sale (“commercialization”), effective patent terms vary: inventions that commercialize at the time of invention receive a full patent term, whereas inventions that have a long time lag between invention and commercialization receive substantially reduced - or in extreme cases, zero - effective patent terms. We present a simple model formalizing how this variation may distort research and development (R&D). We then explore this distortion empirically in the context of cancer R&D, where clinical trials are shorter - and hence, effective patent terms longer - for drugs targeting late-stage cancer patients, relative to drugs targeting early-stage cancer patients or cancer prevention. Using a newly constructed data set on cancer clinical trial investments, we provide several sources of evidence consistent with fixed patent terms distorting cancer R&D. Back-of-the-envelope calculations suggest that the number of life-years at stake is large. We discuss three specific policy levers that could eliminate this distortion - patent design, targeted R&D subsidies, and surrogate (non-mortality) clinical trial endpoints - and provide empirical evidence that surrogate endpoints can be effective in practice.

tbrownaw 12y ago

Why is (well, should. Literal "is" is reasonably clear) drug exclusivity handled separately from drug approval? Since the one is needed to make up for the costs imposed by the other, shouldn't they be handled as a unit under the same agency?

arikrak 12y ago

In general, regular capitalism is best for progress, since government-funded operations don't have the same incentive to succeed, to avoid waste, etc. However, for something like developing drugs, it may be worthwhile to have more government involvement. The article mentions how drug companies can focus on their profits to the detriment of society. One might even wonder if the Hepatitis C cure was priced so that not everyone could afford it, so the disease wouldn't be eliminated...

danielweber 12y ago
1. The drug industry not creating a drug doesn't stop a charity from developing it. (Bill Gates once wanted a drug developed that didn't have enough of a market, so his foundation paid out of pocket for it.) It's not "to the detriment of society" for them to pursue their own ends, and more than it is "to the detriment of society" that I'm typing away on HN instead of being outside picking up trash. 2. Conspiracy theories about keeping diseases around are misfounded. a) The drug in only effective in EDIT 97% of people. b) The patent will eventually expire. c) The price for the drug is cheaper than the lifetime cost of treatment, making it a win-win scenario. (Plus the eventual expiration of the patent will make this very cheap in the long term.)
- carbocation 12y ago
  Nitpick: the sofosbuvir trials show ~97% effectiveness, not 80%.
- dnautics 12y ago
  1) For example, the polio vaccines, which were developed and even whose distribution by the private non-profit that is now (the somewhat corrupt) March of Dimes. Incidentally, the polio vaccines weren't patented, either.
- arikrak 12y ago
  97% is pretty high, but I agree that it's not too likely that's the drug company's plans. Note that the government grants the drug company a monopoly to sell their drug, so it makes sense to place some limitations on pricing, or at least negotiate like other government do.

danielweber 12y ago

This is arguing for longer patents for drugs, since the 20-year-long patent causes the industry to only look for drugs where you can get through development and trials quickly enough that they enough years left on the patent to make revenue.

michaelq 12y ago

The simplest solution would be to significantly shorten the patent duration for pharmaceuticals, and start it the day a drug gets FDA approval. This would uncouple two things that should have never been coupled in the first place: development time and window of exclusivity in the market.

xaa 12y ago
Companies would (justifiably) still want provisional patent protection for the very long period between the idea's conception and FDA approval, to reduce the risk on their huge investment. Thus, wouldn't this idea exacerbate the already rampant abuse of provisional patents? Or if long provisional patents weren't allowed, then companies probably would avoid products with long FDA approval times, which is the very problem you're trying to solve.
- skybrian 12y ago
  Early-phase development would be better funded through a different mechanism. (For example, prizes for key achievements.)
  - xaa 12y ago
    It already is, because the way many drugs are developed is that the NIH funds the basic research behind it, and early-stage in-vitro trials and maybe some mouse trials. Usually it is only when the drug is ready for clinical trials that pharma steps in (doing 20% of the work and claiming 100% of the profit).
- michaelq 12y ago
  I imagine the costs of trials, and who paid them, are well documented. In the event of a dispute about which company discovered which drug, could a company not point to its investment in research or funding of a specific trial as evidence of its discovery, rather than trying to spam system with provisional patent applications? (By the way, there's no such thing as a "provisional patent" http://en.wikipedia.org/wiki/Provisional_patent#cite_note-1 http://en.wikipedia.org/wiki/Provisional_patent#cite_note-1)

dnautics 12y ago

It keeps annoying me that nearly everyone (including Richard Posner [0] and notch [1]) says that 'medicine makes for the best case for patents'. I'm not convinced that patents are necessary for pharmaceuticals, and I'm trying to prove that's the case [2]. [0] http://www.theatlantic.com/business/archive/2012/07/why-there-are-too-many-patents-in-america/259725/ http://www.theatlantic.com/business/archive/2012/07/why-ther... [1] http://notch.tumblr.com/post/27751395263/on-patents http://notch.tumblr.com/post/27751395263/on-patents [2] http://indysci.org/projectmarilyn http://indysci.org/projectmarilyn

pessimizer 12y ago
I don't know if you're familiar with Dean Baker: "Patent monopolies are one mechanism to provide an incentive for innovation, however they are a tremendously inefficient mechanism." http://www.cepr.net/index.php/blogs/beat-the-press/health-care-costs-dont-blame-the-free-market http://www.cepr.net/index.php/blogs/beat-the-press/health-ca... http://www.cepr.net/index.php/Publications/Reports/financing-drug-research-what-are-the-issues http://www.cepr.net/index.php/Publications/Reports/financing...
- dnautics 12y ago
  thank you for those links. Incidentally Drew Curtis also outlines the dichotomy in policy pressures really well. http://www.ted.com/talks/drew_curtis_how_i_beat_a_patent_troll http://www.ted.com/talks/drew_curtis_how_i_beat_a_patent_tro... I'm surprised that the first link of yours doesn't show the fact that Pharma companies make upwards of 10-16% margin which is high for the healthcare sector, versus Generics companies which make ~5%, in line with "companies in general"; and insurance companies which pre-ACA were making negative-~2% margins. It's hard not to believe that the ACA was just a bailout for insurance companies, in exchange for mild vilification.
  - pessimizer 12y ago
    >I'm surprised that the first link of yours doesn't show the fact https://encrypted.google.com/search?hl=en&q=medical%20patent%20site%3Acepr.net https://encrypted.google.com/search?hl=en&q=medical%20patent... Dean Baker has written a lot on patents in medicine, and in other fields as well. It would probably be interesting for you.

technotony 12y ago

The solution to this is regulatory exclusivity. The big cost is going through the FDA process, companies could simply be granted a 15 year exclusivity once they've passed that bar. The FDA already has a process setup for granting this.

deleted 12y ago
[deleted]