Unpatentable Drugs and the Standards of Patentability, by Ben Roin (Harvard Law), is older than most articles I blog about (published in 2009), though too young to be a classic. But in rereading it for an article I'm working on, I decided it is worth a quick post, especially for those who missed it when it first came out. Roin's basic claim is simple but important: "the standards by which drugs are deemed unpatentable under the novelty and nonobviousness requirements bear little relationship to the social value of those drugs or the need for a patent to motivate their development."
Roin argues that the patentability requirements reward the invention of drugs, not their development. But just because the public has access to a chemical structure in a novelty-defeating publication does not mean that the public can benefit from that drug. Due to the "hair-trigger approach" to novelty, some disclosures may be sufficient to defeat novelty but insufficient to secure a patent (e.g., they do not satisfy the disclosure or utility requirements), so "a new drug can become unpatentable before anyone ever has a chance to patent it." (This is less true for method-of-use patents, although these are often considered weaker than patents on the molecule itself, as I mentioned last week.) Similarly, the nonobviousness requirement has the "perverse effect" that "the more likely it appears that a new drug will be successful, the less likely it is to be patentable." As Roin notes, "the patent system is largely incapable of distinguishing unimportant me-too drugs from drugs of significant medicinal value, and there is little reason to trust that the drugs deemed 'obvious' under current law would not provide great benefit to society." (Perhaps these drugs would be patentable under a cost-benefit or "inducement standard" approach to nonobviousness?)
Roin interviewed a number of pharmaceutical industry executives, who confirm that pharmaceutical companies rigorously examine the patentability of drug candidates before investing in clinical trials. Only in unusual cases (such as for some orphan drugs) will a drug be developed without strong patent protection. And the public has little record of the unpatentable drugs that are screened out of development—or the corresponding welfare losses. But, Roin argues, simply changing patent law to make these drugs patentable "might open the door to abusive patenting strategies."
One solution would be more government-sponsored clinical trials on promising but unpatentable drugs, but Roin argues that we are unlikely to see the "dramatic overhaul of the current system for financing pharmaceutical R&D" that would be necessary for this approach. Roin also notes that the "potential value [of unpatentable drugs] is often known only to the pharmaceutical companies that chose not to develop them." (Perhaps pharmaceutical companies should receive some reward for disclosing this information?) And he cites the government's lack of success in promoting finasteride to prevent prostate cancer after a National Cancer Institute study found a 25% reduction in prostate cancer in men over 55. He argues that "[p]ublicly funded research of this sort is often slow to influence physician practices," and that "[w]hile a pharmaceutical company would likely have greater success in promoting finasteride, none of them have an incentive to fund studies that would resolve lingering questions about the drug's safety." (Perhaps the government should invest more resources in the science of communicating health information?)
Roin concludes that the best solution is to extend the FDA-administered regulatory exclusivity period before generic competition is allowed for new drugs (currently up to 5 years plus the approval time for the generic). While the optimal exclusivity period is difficult to calculate, Roin argues that it is probably longer than the current period "because pharmaceutical companies continue to screen drugs with weak patent protection out of their pipelines." He suggests that the best system would allow the FDA to tailor exclusivity to the varying R&D costs for different drugs, so that longer and more expensive clinical trials would receive more protection—unlike in the patent system, where "the longer a drug is in development, the shorter its effective patent life becomes, even though the need for protection is likely greater." (Note that the patent term extensions allowed under Hatch-Waxman only partially address this problem.) The FDA could also withhold the exclusivity period unless there is evidence that a drug is better than older drugs (not just better than a placebo), discouraging the development of me-too drugs.
Chemist Gaythia Weis made a thoughtful comment on this post in Google+, which I'll respond to here for those who aren't on G+. You can read her full comment at the link, but in short, she argues for more analysis of the public-health implications of pharmaceutical patenting. She notes that the public pays for a substantial portion of basic research on new drugs and also often picks up the bill on the other end (through Medicare, etc.). And she argues that this government-industry hybrid system does not serve the public, and that we rarely see the truly innovative discoveries from small companies. "Rather than locking up more drugs under patents and related protections, perhaps we should open up the process to these smaller companies, as well as foster continuing innovation by larger ones, by having the health and safety process publicly funded. This could have benefits in making such analysis more likely to be unbiased and thus also opening the possibility that broadly based overall health outcomes would be investigated."
ReplyDeleteRoin does state that more public funding of clinical trials would solve this problem—he is just skeptical that this will happen in practice. For example, he states: "Although the potential benefits from government financing of clinical research are substantial, funding for government-sponsored clinical trials is chronically in short supply, and recent spending cuts reflect Congress's unwillingness to commit necessary resources to important clinical research." (This problem is probably even more true in today's political climate.) Personally, I agree with Weis and Roin that the US should spend more on public research funding, but I share Roin's skepticism that this will happen. Maybe that skepticism is misplaced, which would be great! But if we assume that the whole pharmaceutical research system is not going to be restructured, are there other ways to better align private R&D with social benefit?
At first glance, Roin's proposal might simply seem to be "locking up more drugs" (and thus very pro-big-pharma), but allowing the FDA to tailor regulatory exclusivity periods to social benefit and requiring comparative effectiveness might lead to a corresponding weakening of patent protection (because pharma would no longer be able to argue that patents are necessary for R&D). One can even imagine this leading to FDA evaluations of health benefits, so that a company's reward (in terms of a longer exclusivity period) is tied to the health impact of a drug (a sort of modified version of the Health Impact Fund). And in any case, I don't think Roin's proposal would worsen the problems Weis describes: the drugs he targets are currently not being developed at all. Roin is clearly aware of how some pharmaceutical companies might "abuse" the patent system, and he warns against "fixes" that would exacerbate these problems.
In any case, I agree that health innovation policy ought to be about public health—I just don't think it is obvious what the best way to promote public health is. But I appreciate when people take the time to read and respond to these posts, especially when the comments are as thoughtful and respectful as these!