Patents have long served as a means of incentivising innovation, especially in the pharmaceutical industry.
It’s well known that companies can invest in expensive R&D because they are able to protect their drugs with patents, take advantage of the period of exclusivity associated with them, and recoup the cost of investments.
It’s understandable, therefore, that pharma companies and others might get a little bit wary when politicians or economists start talking about doing away with patents.
But that is – yet again – what’s happening now in the US.
Senators are evaluating a proposed amendment to the Pandemic and All-Hazards Preparedness and Response Act, which would authorise the National Academies of Sciences, Engineering, and Medicine (NASEM) to carry out a study on alternative models for financing pharmaceutical R&D.
The amendment, as reported by Managing IP, envisions the phasing out of patents and monopoly-based incentives for drugmakers and replacing them with a prize system that would reward the development of successful drugs.
This passed through the Senate Committee on Health, Education, Labor and Pensions on July 20.
I understand why pharma companies and IP counsel are tired of seeing patents under attack.
But at the same time, I don’t think this is a bad idea.
Get studying
For one thing, the proposal wouldn’t automatically implement a delinkage system – a term used for a set of options that seek to change methods of financing innovation. It would simply study the feasibility of doing so.
I’m not naïve enough to think that this is a mere academic exercise, of course. Senator Bernie Sanders has advocated for alternative models to patents before.
But we shouldn’t be afraid to let NASEM look into the matter.
After all, we don’t yet know what the outcome will be. The conclusion may back the positions held by advocates of a strong patent system.
It could, of course, demonstrate that alternatives to patents really aren’t workable or would be extremely complicated to implement.
A 2020 study by the Information Technology & Innovation Foundation (ITIF) found that such alternatives wouldn’t be feasible, for example.
If policymakers want to replace patents, they’ll have to make sure that the alternatives actually serve the interests of patients and foster drug development.
They’ll need to understand all the complications that could come with pursuing an alternative pathway.
The study will likely highlight some of the risks of replacing patents, and it could come to many of the same conclusions as the ITIF, or even find new problems.
If it did find additional issues, that could help bolster pro-patent policy arguments even more.
Options open
There’s also a good chance that it won’t come out in favour of patents, of course.
The question then will be what to make of the results.
Regardless of what the study says, we’ll have to examine how sound the logic is, what methodology was used, and whether the conclusions are backed by evidence.
Should the study propose abolishing patents based on flimsy evidence or faulty logic, patent lawyers and others will be sure to point that out. Politicians will have to sort through the noise and hear the arguments.
On the other hand, if the study does come up with a feasible and well-reasoned alternative to patents that would help lower drug prices, that would be a good thing.
Patents have incentivised so much innovation. And pharmaceutical patent lawyers have worked tirelessly to help their clients protect ideas because the common understanding has been that this is the best way to encourage the development of life-saving medicines.
But innovation is all about solving problems.
If we can come up with new and better ways to solve policy problems and make drugs more affordable while still encouraging innovation, we should be open to those too.
It’s also possible that this isn’t a zero-sum game. Perhaps some methods of R&D are best incentivised through patents while others could be through cash awards or other methods.
Wider health reform?
At the same time, patents alone can’t be blamed for rising drug prices.
The former CEO of Turing Pharmaceuticals, Martin Shkreli, raised the prices for Daraprim (pyrimethamine) from around $13.50 to $750 per pill in 2015, even though the drug was off-patent.
Furthermore, the US still lacks a national healthcare system.
Having one – which Sanders has advocated for – wouldn’t necessarily solve all issues with prescription drug pricing, given that these debates still arise in other countries.
But the UK National Health Service charges £9.65 ($12.27) per prescription item. A comprehensive national healthcare system in the US could at least ensure that less of the cost of pharmaceuticals is passed on to the patient.
Passing national healthcare through Congress would obviously be a long shot, to say the least. But it is something that senators should continue to consider and advocate for if they want to make medical care more accessible.
Implementing any form of delinkage would also be very difficult and is, in many ways, a far more radical proposal than national healthcare – which other high-income nations have managed to pass.
It wouldn’t make sense to upend the current patent system without a really well-vetted alternative.
But for now, there’s no harm in looking into the matter.
