Against patents (2)

 Medical Monopoly. Intellectual Property Rights and the Origins of the Modern Pharmaceutical Industry

Medical Monopoly combines legal, medical, and business history to offer a sweeping new interpretation of the origins of the complex and often troubling relationship between the pharmaceutical industry and medical practice today. Joseph M. Gabriel provides the first detailed history of patent and trademark law as it relates to the nineteenth-century pharmaceutical industry as well as a unique interpretation of medical ethics, therapeutic reform, and the efforts to regulate the market in pharmaceuticals before World War I. His book will be of interest not only to historians of medicine and science and intellectual property scholars but also to anyone following contemporary debates about the pharmaceutical industry, the patenting of scientific discoveries, and the role of advertising in the marketplace.

 

Free our genes (3)

 Patents on Life. Religious, Moral, and Social Justice Aspects of Biotechnology and Intellectual Property

Against patents, again (2)

 Patents, Human Rights, and Access to Medicines

Free our genes

 The Genome Defense Inside the Epic Legal Battle to Determine Who Owns Your DNA

Further reading

Outline of this great book on gene patents:

PART I: BUILDING THE CASE

Chapter 1   Who Can We Sue?

Chapter 2   The World in the Helix

Chapter 3   The Gene Queen

Chapter 4   Mr. Lincoln’s Boat

Chapter 5   The ACLU Way

Chapter 6   Product of Nature

Chapter 7   On the Hill

Chapter 8   Speaking of Patents

Chapter 9   The Power of Pink

Chapter 10 We’ve Got You Covered

Chapter 11 BART

Chapter 12 Patents and Plaintiffs

Chapter 13 Pulling the Trigger

PART II: LITIGATION

Chapter 14 The Big Guns

Chapter 15 SDNY

Chapter 16 Chicken and Egg

Chapter 17 We’re from the Government

Chapter 18 Splitting the Baby

Chapter 19 The Patent Court

Chapter 20 Magic Microscope

Chapter 21 Last Man Standing

PART III: HIGHEST COURT IN THE LAND

Chapter 22 Déjà Vu All Over Again

Chapter 23 Air Force 1

Chapter 24 With Friends like These

Chapter 25 Oyez, Oyez, Oyez!

Chapter 26 9–0

Chapter 27 Aftermath

Appendix: The (Legal) Meaning of Myriad

Principal Characters

A Note about Sources

Bibliography

Incentives for innovation

 Inventing Ideas. Patents, Prizes, and the Knowledge Economy

How do knowledge and ideas influence the competitiveness of firms and nations?

You'll find the answer inside this book:

The twentieth century has been characterized as “the American century,” but at this critical juncture, new global competitors are adopting economic policies and institutions that have the potential to outpace U.S. achievements. Whether the twenty-first century will remain the American century will largely depend on the extent to which the lessons of the past are kept to the forefront. American technological and industrial progress owed to democratic open-access markets in ideas where entrepreneurial innovators succeeded, not by decree of administrators, but because their creations satisfied the ultimate judges—consumers in the marketplace. The evolution of administered innovation systems over the past three centuries largely serves as a cautionary tale rather than as a success story. The economic history of innovations instead suggests that the best incentive for necessary changes is failure in the marketplace; while the best prize for creative contributions to the knowledge economy is success in the marketplace.

Business as usual is unacceptable in a pandemic

 What are the obligations of pharmaceutical companies in a global health emergency?

Timely article by Ezequiel Emanuel et al. in The Lancet:

Pharmaceutical companies have special obligations in this emergency, which follow from their indispensable capacity to help to end the pandemic by developing, manufacturing, and distributing COVID-19 vaccines. However, the capacity to help alone does not fully specify companies’  obligations. Additionally, market-based arrangements, with patents, marketing exclusivity, and confidentiality clauses, give pharmaceutical companies the freedom to choose what treatments to research and develop, how to price and distribute their products, and whom to furnish with products through bilateral agreements.9 Indeed, companies need not produce vaccines or infectious disease therapies at all. Patents and exclusivity, alongside the absence of price controls or requirements for technology transfer, also permit companies to charge higher prices than they otherwise could.  Governments adopt intellectual property rights, limited pricing regulations (ie, each country has its own pricing, with no one countrycontrolling the pricing, at most being able to set limits on the prices that can be charged), trade agreements, and other limited  interventions (eg, manufacturing, inspections of facilities, etc) in the hope of incentivising the development, manufacturing, and distribution of socially valuable products. Everyone—including pharmaceutical companies— agrees that business as usual is unacceptable in a pandemic.

 Ethical obligations:

Patents are Not the Problem (right now)!

 I agree absolutely with Alex Tabarrock and his post in Marginal revolution. He says:

Patents are not the problem. All of the vaccine manufacturers are trying to increase supply as quickly as possible. Billions of doses are being produced–more than ever before in the history of the world. Licenses are widely available. AstraZeneca have licensed their vaccine for production with manufactures around the world, including in India, Brazil, Mexico, Argentina, China and South Africa. J&J’s vaccine has been licensed for production by multiple firms in the United States as well as with firms in Spain, South Africa and France. Sputnik has been licensed for production by firms in India, China, South Korea, Brazil and pending EMA approval with firms in Germany and France. Sinopharm has been licensed in the UAE, Egypt and Bangladesh. Novavax has licensed its vaccine for production in South Korea, India, and Japan and it is desperate to find other licensees but technology transfer isn’t easy and there are limited supplies of raw materials:

Virtually overnight, [Novavax] set up a network of outside manufacturers more ambitious than one outside executive said he’s ever seen, but they struggled at times to transfer their technology there amid pandemic travel restrictions. They were kicked out of one factory by the same government that’s bankrolled their effort. Competing with larger competitors, they’ve found themselves short on raw materials as diverse as Chilean tree bark and bioreactor bags. They signed a deal with India’s Serum Institute to produce many of their COVAX doses but now face the realistic chance that even when Serum gets to full capacity — and they are behind — India’s government, dealing with the world’s worst active outbreak, won’t let the shots leave the country.

Plastic bags are a bigger bottleneck than patents. The US embargo on vaccine supplies to India was precisely that the Biden administration used the DPA to prioritize things like bioreactor bags and filters to US suppliers and that meant that India’s Serum Institute was having trouble getting its production lines ready for Novavax. CureVac, another potential mRNA vaccine, is also finding it difficult to find supplies due to US restrictions (which means supplies are short everywhere). As Derek Lowe said:

Abolishing patents will not provide more shaker bags or more Chilean tree bark, nor provide more of the key filtration materials needed for production. These processes have a lot of potential choke points and rate-limiting steps in them, and there is no wand that will wave that complexity away.

Technology transfer has been difficult for AstraZeneca–which is one reason they have had production difficulties–and their vaccine uses relatively well understood technology. The mRNA technology is new and has never before been used to produce at scale. Pfizer and Moderna had to build factories and distribution systems from scratch. There are no mRNA factories idling on the sidelines. If there were, Moderna or Pfizer would be happy to license since they are producing in their own factories 24 hours a day, seven days a week (monopolies restrict supply, remember?). Why do you think China hasn’t yet produced an mRNA vaccine? Hint: it isn’t fear about violating IP. Moreover, even Moderna and Pfizer don’t yet fully understand their production technology, they are learning by doing every single day. Moderna has said that they won’t enforce their patents during the pandemic but no one has stepped up to produce because no one else can.

 More information in his post.

Some weeks ago a journalist asked to me the same question, and I said more or less, the same!. There is no need to start discussions about patents in WCO, only the enforcement and implementation of mandatory licenses can be helpful.

¿Qué opina sobre las patentes de las vacunas de la covid-19? ¿Considera que, en este caso, deberían contemplarse excepciones al derecho de explotación exclusiva?

Antes de hablar de patentes, conviene considerar la inversión pública en investigación. Por ejemplo, en la medida que hay una vacuna cuyo coste de investigación ha sido sufragado en un 97% por el sector público, resulta lógico que se compre a un precio equivalente al coste de fabricación, tal como sucede.  Ahora bien, también sería deseable que se obligara a licenciar el proceso a otros fabricantes. En el caso de vacunas de RNA mensajero, el nivel de inversión pública en Estados Unidos es notable y sin embargo no ha sucedido lo mismo. Por consiguiente, los gobiernos deben gestionar las contrapartidas de la inversión pública en investigación.

•  ¿Considera que sería positiva una liberación de las patentes de las vacunas contra la covid? ¿Por qué? 

En mi opinión ya existen mecanismos que permiten conseguir que las vacunas sean asequibles y son las licencias obligatorias. Tal regulación que se configuró en la reunión de la OMC en Doha en el año 2003. Desafortunadamente no se ha desarrollado suficientemente por los países. Las condiciones por las que se deberían aplicar tales licencias quedan explícitas en la Declaración. Tales condiciones hacen referencia a la definición de emergencia y crisis de salud pública. En esta pandemia se daban las condiciones para su aplicación. Visto así, el debate necesita centrarse entre patentes y licencias obligatorias atendiendo a condiciones concretas. 

•  ¿Existen mecanismos ya reglados para que, en situaciones como ésta, más allá de la patente, se garantice la llegada de las vacunas a todos los países (incluyendo los de nivel económico más bajo)?

En realidad la Alianza Mundial para vacunas e inmunización (GAVI) nació para ello. En el caso de la COVID, la OMS a través de GAVI y otras instituciones ha impulsado la iniciativa COVAX que pretende ofrecer vacunas a países en desarrollo. Aún así sabemos que el esfuerzo es insuficiente a la vista de los resultados, el 87% de las vacunas ha ido a países ricos, y en los menos desarrollados tan solo ha llegado el 0,2%.

 

Vaccine access, now!

 Global equitable access to vaccines, medicines and diagnostics for COVID-19: The role of patents as private governance 

A compulsory licence allows a third party to produce a patented technology without the patent holder’s permission. Article 31 of the TRIPS Agreement allows all WTO States to issue compulsory licences subject to certain criteria.19 First, all cases are considered on their individual merits. Thus, a blanket compulsory licence for certain technologies, for example, medicines, is not possible. Second, prior attempts to negotiate a licence for the invention on reasonable terms with the patent holder must be evident. This requirement can be waived in ‘a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use’ which would likely apply for COVID-19. Third, the scope/duration of the licence must be for the limited purpose it was authorised for. Fourth, the licence is non-exclusive so the patent holder can still enter into licensing agreements with others. Fifth, use of the licence is generally permitted predominantly for the supply of the domestic market of the State where the compulsory licence is granted. Finally, the patent holder must be paid ‘adequate renumeration’ for the compulsory licence.

So, 

 Crucially, it is only by starting a deeper conversation around the role of patent holders within the health context for COVID-19 and of the role of the public interest within patent law more generally that we can address and pre-empt some of the current obstacles posed by patents to equitable global access to healthcare. Given the significant health implications at stake it is vital that this conversation is informed by a global health and bioethics perspective

 

Pharma, Big Pharma (2)

 Government, Big Pharma, and The People. A Century of Dis-Ease

A book to read, with this Table of Contents:

Dedication
Acknowledgements
Preface
Chapter One – Introductions
Health
Woman as a Biological and Social Entity
A Different Paradigm
Health Care and Rights
Drugs and Their Role in Society
Drug Policy
Big Pharma
Drug-Related Problems
The People
What’s Ahead
Conclusion
Chapter Two – The Four "P’s"
Introduction
Marketing as an Actualizing Process
The Marketing Mix/The Four "P’s"
Government and the Four "P’s"
Conclusion
Chapter Three – Investigators and Investigations
Introduction
The Hearings
The Grand Inquisitor
Gaylord Nelson – Son of Torquemada
The Fountain Hearings
Senator Kennedy Joins the Fray
Small Business Problems – Dingell
Drug Efficacy Problems – Fountain
Moss on Drug Abuse
Fountain Redux
Congressman Rogers on Transition
Senator Humphrey and the Literature
A Newcomer – Congressman Van Deerlin
Senator Fountain – "One More Time"
Senator Kennedy Returns
FDA Under the Microscope Again
Kennedy – Not Too Tranquil
Gore on Pharmaceutical R & D
Senator Fountain Again
Claude Pepper for the Old Folks
Zomax in the Spotlight
A Pryor Engatement
The Task Force on Prescription Drugs
Research Findings and Recommendations
Conclusion
Chapter Four – Legislators and Legislation
Introduction
Laws and Policy
Bills and Sponsors
The Process
Conclusion
Chapter Five – Regulators and Regulations
Introduction
The Food and Drug Administration
Other Regulators and Regulations
Federal Trade Commission
Federal Communications Commission
Drug Enforcement Administration
Centers for Medicare and Medicaid Services
Patents and Trademarks
State Regulations
Drug Names
Conclusion
Chapter Six – Non-Government Influence
Introduction
Self-Regulation
Third Parties – Managed Care Controls
Formularies and Prescription Limitations
Lawyers
Advocates and Adversaries
Mail Order Pharmacy
Pharmacy Benefit Managers and Outcomes Management
Conclusion
Chapter Seven – The People and Their Drugs
Introduction
The People as Patients
Health Belief Model
Case – Health Belief Model
Attitudes and Evaluation of Drugs
The Sickness Career
The Sick Role
The Sick Role in Acute and Chronic Illness
Compliance with Medication Regimens
Other Influences on Medication Use
What to Do
Death or Maybe Not
Conclusion
Chapter Eight – Response of Big Pharma
Introduction
Response to Government
Big Pharma Speaks
Response of Big Pharma to the People
Some Ideas for Big Pharma
PMA Monographs
Statesmanship
Conclusion
Chapter Nine – Little Pharma and Friends
Introduction
Generic Pharma – Not So Little
Big Bio
What is Special about Specialty Drugs?
Little Boutiques
Back to the Future – Compounding Pharmacists
Friends
Conclusion
Chapter Ten – Greedy Big Pharma
Introduction
Two Parts of Greedy
AARP and Greedy Big Pharma
Congress and Greedy Big Pharma
Risk vs. Reward
Greedy Big Tech
Conclusion
Chapter Eleven – Whence the Drugs?
Introduction
Origins of Drugs
Drug Product Development
Marketing in the Last Century
Invention, Discovery, Development
Curiosities and Surprises
Recommended Reading
Conclusion
Chapter Twelve – Drugs of the Future
Introduction
But Seriously
Drugs in an Aging Society
Future Drugs for the Aged
Lifestyle Drugs
Conclusion
Chapter Thirteen – The Non-Prescription Products Market-Dr. W. Steven Pray
Introduction
Patent Medicines
Laws That Regulated Non-Prescription Products
FDA’s Review of O-T-C Products
The Prescription to O-T-C Switch
A Third Class of Drugs
Quackery – Lacking Proof of Efficacy
Quackery – New Names Confer False Respectability
Conclusion
Chapter Fourteen – Issues and Studies in Pharmacoeconomics
Introduction
The Emergence of Pharmacoeconomic Research
The Cost of Illness
Quality of Life Assessment
The Economics of Non-Compliance
Economic Epidemiology
Conclusion
Chapter Fifteen – On Drug Prices – Dr. E. M. "Mick" Kolassa
Pricing: The Forgotten "P"
The Growing Importance of Pharmaceutical Prices
Prices, Politics and Problems
Pricing Terminology
What is a Pharmaceutical Price?
Price Decision Making
The Value of Pharmaceuticals
The Future of Pharmaceutical Pricing
Chapter Sixteen – Summary, Ruminations and Apologia
Introduction
Ruminations
Trends
What If’s
Apologia

A plea for public patents on COVID prevention and treatment

 Funding of Pharmaceutical Innovation During and After the COVID-19 Pandemic

Extensive public investments also are being made in therapeutics. The 2 most prominent monoclonal antibodies (by Regeneron and Lilly) have come to market with substantial governmental support for product commercialization. Both products derive from therapeutic research platforms established with governmental support before the COVID-19 pandemic, but product commercialization and manufacturing received major additional investments in 2020. Separately, the National Institutes of Health (NIH) Rapid Acceleration of Diagnostics program has committed $1.5 billion to supporting development of diagnostic tests related to COVID-19. The specifics of the federal contracts largely remain confidential.

Why do they remain confidential? 

The lesson of the COVID-19 experience is that, when innovation in the life sciences is imperative, the traditional reliance on pharmaceutical industry prices and profits is jettisoned in favor of governmental grants and procurement. Sustained public funding for product development and commercialization will permit the sustained financing of innovation, a renewed attention to major public health needs, and the global position of the US pharmaceutical industry.

If there is public funding, why there aren't public patents? 

Against patents for the current pandemic

Patents vs. the Pandemic

Imagine a world in which a global network of medical professionals monitored for emerging strains of a contagious virus, periodically updated an established formula for vaccinating against it, and then made that information available to companies and countries around the world. Moreover, imagine if this work were done without any intellectual-property (IP) considerations, and without pharmaceutical monopolies exploiting a desperate public to maximize their profits.
This may sound like a utopian fantasy, but it is actually a description of how the flu vaccine has been produced for the past 50 years. Through the World Health Organization’s Global Influenza Surveillance and Response System, experts from around the world convene twice a year to analyze and discuss the latest data on emerging flu strains, and to decide which strains should be included in each year’s vaccine.

This is exactly what Nobel prize David Stiglitz says in his op-ed in Project Syndicate. Absolutely agree.

For too long, we have bought into the myth that today’s IP regime is necessary. The proven success of GISRS and other applications of “open science” shows that it is not. With the COVID-19 death toll rising, we should question the wisdom and morality of a system that silently condemns millions of human beings to suffering and death every year.
It’s time for a new approach. Academics and policymakers have already come forward with many promising proposals for generating socially useful – rather than merely profitable – pharmaceutical innovation. There has never been a better time to start putting these ideas into practice.

Hopper

Value creators and extractors

The Value of Everything: Making and Taking in the Global Economy

The rethorics of value is usually plagued with deliberate misunderstandings. Specially, those that quote themselves as value creators may appear on a close look as a value extractors. This is precisely what the book of Marianna Mazucatto does. It identifies the patterns to assess value creation and extraction and the private of public and private roles.Chapter 7 on Extracting Value through the Innovation Economy is specially helpful. You'll find there the patents as a value extraction process or the pharmaceutical pricing discussed in detail. Therefore, a must read.

In modern capitalism, value-extraction is rewarded more highly than value-creation: the productive process that drives a healthy economy and society. From companies driven solely to maximize shareholder value to astronomically high prices of medicines justified through big pharma's 'value pricing', we misidentify taking with making, and have lost sight of what value really means. Once a central plank of economic thought, this concept of value - what it is, why it matters to us - is simply no longer discussed.

 The logical outcome of a combination of monopoly and rigid demand is sky-high prices, and this is precisely what is happening with specialty drugs. It explains why pharmaceutical companies enjoy absurdly high profit margins: in addition to the normal profit rate, they earn huge monopoly rents.59 A value-based assessment of the kind NICE carries out can be helpful because it reduces demand for the monopolists’ drugs and prevents them from charging whatever price they choose. The downside, however, is that increased elasticity of demand for drugs comes at the cost of leaving some patients without the medicines they need, because pharmaceutical companies may not cut their prices enough to treat everyone who needs the drug if doing so would reduce profit margins by more than the companies want.

Changing the production function of diagnostic tests

Next-generation diagnostics with CRISPR

Last week while reading Science I noticed a short and crucial article. Up to now CRISPR technology was focused on gene editing, now we can say that its usefulness is widening into diagnostics. It may change completely molecular diagnostics of "infectious diseases through detection of Zika virus (ZIKV), Dengue virus (DENV), and human papillomavirus (HPV) in human  samples, and noninfectious diseases, such as detection of gene mutations in circulating cell-free DNA from lung cancer patients." The production founction of lab testing would change completely.
Several articles explain details about it. The fight for patents is going to start again on CRISPR diagnostics. And this are unfortunately bad news.
Anyway, Science article reminds us:

These emerging diagnostic tools will by necessity be compared to standard diagnostics to ensure sensitivity and specificity and will need to be field-tested to guarantee performance in patient care settings, as environmental conditions and end-user application might affect performance. Proven assays, if affordable, promise to improve care in resource-limited settings where undifferentiated febrile illness is the norm and where gaps or delays in diagnosis, targeted care, and infection control contribute to infectious disease mortality and spread.

More details in The Verge.

Genome editing, closer than you think

Human Genome Editing Science, Ethics, and Governance

Last week the US patent office ruled that hotly disputed patents on the CRISPR revolutionary genome-editing technology belong to the Broad Institute of Harvard and MIT. In a former post I explained the dispute. Genome editing in my opinion shouldn't be patented and will see exactly the impact of such ruling in US and elsewhere in the next future.
If you want to know in detail what does genome editing means for the future of life sciences, have a look at NASEM book.

It is now possible to insert or delete single nucleotides,interrupt a gene or genetic element, make a single-stranded break in DNA, modify a nucleotide, or make epigenetic changes to gene expression. In the realm of biomedicine, genome editing could be used for three broad purposes: for basic research, for somatic interventions, and for germline interventions.

CRISPR (which stands for clustered regularly interspaced short palindromic repeats) refers to short, repeated segments of DNA originally discovered in bacteria. These segments provided the foundation for the development of a system that combines short RNA sequences paired with Cas9 (CRISPR associated protein 9, an RNA-directed nuclease), or with similar nucleases, and can readily be programmed to edit specific segments of DNA. The CRISPR/Cas9 genome-editing system offers several advantages over previous strategies for making changes to the genome and has been at the center of much discussion concerning how genome editing could be applied to promote human health.

I would just want to say that these patents destroy the soul of science, since access should be available with no barriers for the development of  innovation. Patents are not the incentive for discovery in this case, as I explained in my post, natural processes should'nt be patented. And this is why today is a really sad day.

PS. My posts against patents

Michael Kiwanuka. Home again

Stimulating ideas for drug development and pricing

New Health Technologies. Managing Access, Value and Sustainability

This new OECD report sheds light over several issues in an heterogeneous way, but the pharma chapter has a box that I want to highlight. It is really suggestive:

Future scenarios about drug development and drug pricing

These disruptive scenarios result from an expert consultation led by ShiftN and commissioned by the Belgian Health Care Knowledge Centre of Expertise and the Dutch Health Care Institute. The aim of the consultation was to imagine disruptive ways to finance R&D that could potentially better respond to public health needs.

Scenario 1: Needs-oriented Public-Private Partnerships
Public actors and drug developers are tackling public health priorities in vigorous and pragmatic partnerships. The public actor identifies indications representing high public health needs; specifies criteria for the performance levels of drugs to be developed for those indications; and indicates his willingness to pay. Through procurements with enforceable contractual commitments, the public actor enters into a partnership with drug developers to
find solutions for these needs. Developers are prepared to enter into the partnership and to give price concessions for a pre-negotiated fixed agreement on price and volume, and speedier access to market, which reduces their development risk. This drug development and pricing model is close to existing governmental procurement practices in researchintensive areas such as public transport, defence and space exploration.

Scenario 2: Parallel Drug Development Track
EU member states set up a parallel, not-for-profit drug development track that exists alongside, but independent of, the pharmaceutical and biotechnological industry. The aim of the parallel track is to develop cheaper drugs without compromising safety and effectiveness. After having made up an inventory of the public health gaps and priorities in health care, EU member state authorities ask leading public research institutes which
discoveries, assets, tools and capabilities they possess to develop solutions addressing (some of) the needs that were identified. Starting from the match between demand and available expertise, coalitions are built between these (not-for-profit) research institutes, payers, authorities and patients’ organisations. All these partners make the commitment to participate in an open and transparent way in clinical research projects. Intellectual
property (IP) rights are acquired early on in the development process by the partners of the consortium, and ownership is shared. Alternatively, the parallel research infrastructure can completely deprioritise ownership; i.e. inventions and developments in the parallel track are not protected and are in the public domain.

Scenario 3: Pay for Patents
A consortium of European countries join forces and establish a “Public Fund for Affordable Drugs”. Each of the participating countries deposits a fixed annual percentage of what it currently spends on drugs into the Fund. Private payers (including insurance companies) can also join the Fund. The Fund continuously screens the research market for “interesting” drugs that are being developed in Phase II or in Phase III for indications with clear health priorities. The Fund buys the patent from developers, conducts or commissions the last phases of research in public research institutes or subcontracts to private partners (with strict public oversight), and guides the submission process for market authorisation. Because the drug is then put on the market at a relatively low price, substantial savings are generated for the public payer. Once the system is functioning “at cruising speed”, these
savings can (partly) serve to replenish the Fund. The “Pay for Patents” model delinks R&D from manufacturing and sales. The prices decrease because the partners in the Fund consider medicines as public goods that should not be financed through monopoly prices.
Hence, once the patent is owned by the public sector, after a successful development and authorisation trajectory, the rights to produce, distribute and sell the drug can be licenced to manufacturers and distributors that provide the best deal in terms of quality, safety and accessibility for the lowest cost. As a rule, various private partners compete with each other, with the result that “new drugs enter the market at generic prices”.

Scenario 4: Public Good from A to Z
Drug development is essentially a public enterprise, and is radically re-oriented from serving private profits towards serving the public interest and patients’ needs. In a drug development system that is essentially a public enterprise, private drug companies still have a role, albeit with a completely different business model. They mainly manufacture drugs and deliver services to the public provider on a competitive basis. With drugs and other health technologies essentially public goods, patents and monopolistic prices have no role.
Patients and public health providers, not corporations, choose which unmet needs research should address. Public authorities regularly publish lists of research priorities, based on objectively established and patient-informed unmet medical needs. Governments organise and fund that research through a variety of mechanisms, including requests for proposals based on well-defined targets that any research team, public or private, can compete for, or milestone compensation, and active management of the innovation process. By paying directly for R&D and active management of the drug development pipeline, nations and health care systems pay much less than the patent-protected prices of the past. Ultimately, drug prices are set on the basis of the real costs of manufacturing, quality control and distribution, which are decoupled from R&D.
Source: Vandenbroeck, Ph. et al. (2016), “Future Scenarios About Drug Development and Drug Pricing”, Health Care Knowledge Centre (KCE) Report 271, D/2016/10.273/59, Health Services Research (HSR), Brussels.

Genome editing: a potential weapon of mass destruction

The Patent Dispute Over Gene Editing Technologies: The Broad Institute, Inc. vs. The Regents of the University of California

Nobody could imagine two decades ago that a small part of wide range of bacteria's immune system could represent so much for genome editing. Known as CRISPR, clustered regularly interspaced short palindromic repeats, such mechanism can recognise and defend against viruses. The other part of the defense mechanism is a set of enzymes called Cas that can cut DNA and avoid the invasion of viruses. Mostly, these research was originated in Les Salines d'Alacant by Francisco Mojica a microbiologist.
As far as this is a natural process Dr. Mojica didn't show interest in patenting it. Now the row over patents is hot between UC Berkeley and the Broad Institute. I will skip details, you may find it in The Economist.
It seems that the fight is only to determine who was the first, and the Court will have to decide on March 9th. However, my question is: why is it still possible to file a patent over human nature?.
Meanwhile the public debate may be moved towards the use of such CRISPR technology for genome editing, and Science was publishing an article about the threat that misuse represents for human beings. Are we facing a new weapon of mass destruction?
Both issues, patents and bioethical implications are crucial at the moment. Former examples provide clear guidance of outcomes that should be avoided. Unfortunately, the race for the biggest size of the pie (billions of $) seems to be a priority over health and humanity.

The Theranos contretemps as a serious scandal

Last Thursday WSJ released a long article on Theranos clinical lab. In this blog you may check my February and July posts on this firm under the title: A closely guarded secret. As you may imagine, such a title was not coincidental. There were some clues that justified it, something unusual was happening. And WSJ has contributed to shed light on the issue. All the details in it. Basically, the summary is that analytic validity and clinical validity is under compromise. This is an exemple:



If you want to read a first person account, you'll find it here and here. Some additional articles: Wired, New Yorker, Clinical Chemistry and Laboratory Medicine (CCLM), Forbes, NYT, WP,...
This is not only a contretemps, it is a serious scandal and a huge problem to credibility for this start-up.
From Wired:

Theranos got a lot of traction by tapping into the frustration—both from consumers and the medical community—that diagnostic testing is too painful, too slow, and too expensive. “Their problem is they tried to do it with existing diagnostic instrumentation, instead of innovating new diagnostic instrumentation,”

Theranos is a black box that has touted results rather than process. “The ability of the lab medicine community to police and correct itself depends on that flow of information,” says Master. Instead, Theranos’ research was internal, and rather than submit their work to peer review the company cited their FDA approvals as evidence that the technology worked.

At least in the USA there is a regulator, the FDA, lab regulation in Europe was enacted in 1998, completely outdated under a third party scheme, not a direct public regulator. Therefore, there is a pressing motive to speed up new and different rules in Europe. Microfluidics and nanotechnologies are calling for and urgent overhaul.


 PS. An statement from WSJ:

In 2005, Ms. Holmes hired Ian Gibbons, a British biochemist who had researched systems to handle and process tiny quantities of fluids. His collaboration with other Theranos scientists produced 23 patents, according to records filed with the U.S. Patent and Trademark Office. Ms. Holmes is listed as a co-inventor on 19 of the patents.

The patents show how Ms. Holmes’s original idea morphed into the company’s business model. But progress was slow. Dr. Gibbons “told me nothing was working,” says his widow, Rochelle. In May 2013, Dr. Gibbons committed suicide. Theranos’s Ms. King says the scientist “was frequently absent from work in the last years of his life, due to health and other problems.” Theranos disputes the claim that its technology was failing.

Efficiency in drug patents buyout

Panning for gold: sourcing pharmaceutical innovation

Once upon a time there were pharmaceutical firms that invested mostly in internal R+D departments. Long time ago, the door was opened to contracting out, buying patents and licensing. The most recent step is to the acquisition of firms with promising molecules.
A short article in Nature sheds some light about the efficiency of recent mergers and acquisitions. And the summary is:

Our analysis suggests that most companies have a considerable opportunity to get better at deploying capital and resources efficiently when sourcing innovation externally. In our experience, we have found that the best performers develop robust forecasts for the key assets, are fiscally disciplined, and set up their innovation-sourcing teams and transaction capabilities to ensure that the right internal expertise is brought to bear and to ensure smooth hand‑offs through the life cycle of a deal.

The success lies within, the internal expertise is crucial. Have a look at the figure and you'll notice that the most efficient (defined as the commercial impact of the products acquired relative to capital deployed in M&As) is Roche. This is not by chance.

PS. Unfortunately, the study doesn't reflects any consideration to value in health or lobbying efforts in drug prices.
PS. FT's summer books 2015 

Statistical vs. identifiable lives

Do We Really Value Identified Lives More Highly Than Statistical Lives?

The recent Ebola evacuated case exemplifies the concept created by Shelling a long time ago, the difference of how a society allocates resources according to 2 different rules:

In 1968, in a paper about valuing ways to reduce the risk of death, Thomas Schelling1 distinguished between “identified lives” and “statistical lives.” Identified lives are the miners trapped in a mine or the child with a terminal disease—specific people who need help now. Statistical lives are those people, unidentifiable before the fact and often after as well, who will be saved by a new safety regulation, public health program, or environmental standard. Schelling observed that people seem to be willing to pay more to save an identified life: “Let a six-year-old girl with brown hair need thousands of dollars for an operation that will prolong her life until Christmas, and the post office will be swamped with nickels and dimes to save her. But let it be reported that without a sales tax the hospital facilities of Massachusetts will deteriorate and cause a barely perceptible increase in preventable deaths—not many will drop a tear or reach for their checkbooks.

Really such a case goes beyond Shelling insight because of uncertainty and unavailability of effective treatment. Bioethics field has argued over what they called "rule of rescue", a different perspective of the same issue. In this respect, NICE statement helps to understand both views:

When there are limited resources for healthcare, applying the ‘rule of rescue’ may mean that other people will not be able to have the care or treatment they need. NICE recognises that when it is making its decisions it should consider the needs of present and future patients of the NHS who are anonymous and who do not necessarily have people to argue their case on their behalf. NICE considers that the principles provided in this document are appropriate to resolve the tension between the needs of an individual patient and the needs of present and future users of the NHS. The Institute has not therefore adopted an additional ‘rule of rescue.

The article by Louise B. Rusell reflects precisely the theoretical and practical controversy and ends with this paragraph:

Adjustments and controversies aside, the evidence provided by VSL estimates suggests that people’s willingness to pay for statistical lives may be consistent with their willingness to pay for identified lives. The apparent existence of 2 different decision rules may have been no more than an artifact of the economic method for valuing statistical lives in use at the time the distinction was proposed. Now that economists’ methods more fully reflect “the interests, preferences and attitudes to risk of those who are likely to be affected by the decisions,” their estimates of the value of a statistical life support the idea that there just may be a single rule: Identified and unidentified lives may be equally valuable. This is good news for decision makers who use cost-benefit and cost-effectiveness analysis to inform decisions.

The theoretical suggestion sounds good, nowadays the political decision making reality goes in the opposite way, at least close.

PS. A must read post on GCS blog about the same topic.

PS. Ebolanomics, the economics of ebola at the New Yorker. Nothing new, prizes instead of patents to promote R&D, a good idea with difficult implementation.

PS. How much would you pay for a quality adjusted life year?

Walt  Khun.  From Tita Cervera  St. Feliu exhibition

The forthcoming systemic drug industry?

While reading WSJ this week I found that big changes are happening in the pharmaceutical industry. We all know that the former message was: if the industry business model is broken, the best is to manage its decline (John Kay FT dixit). I also explained such trend in this post. Consultants predicted 5 alternative strategies, now the 6th is in place.
The trend is focused towards a new industry structure after the failure of the two parts model: innovative and generic. WSJ says:

A wave of mergers and acquisitions is reshaping the global pharmaceutical industry. Many drug companies are narrowing their focus, dropping out of noncore businesses and bulking up where they have the size and expertise to generate significant sales growth.

The deals would leave fewer competitors with larger revenue streams in each segment of the drug business, from prescription medicines and vaccines to drugs for livestock and pets.

 After the failure of the standard innovative model throught patents, the alternative is to concentrate on rare diseases, and on highly profitable market segments -low volume and high profit-. Concentration is taking place also in commoditizated markets (generics).
Such a level of market concentration should lead to competition policy concerns, since the rivalry is not at industry level, it is at therapeutic group level. Unfortunately regulators are on vacation again. Maybe one day we will complain about a systemic industry that some of its parts may collapse and creates larger risks than returns, but it will be too late.

PS .Def: Systemic risk can be defined as the likelihood and degree of negative consequences to the larger body. With respect to federal financial regulation, the systemic risk of a financial institution is the likelihood and the degree that the institution's activities will negatively affect the larger economy such that unusual and extreme federal intervention would be required to ameliorate the effects

PS. Pharma megamergers, do they work?
PS. Reinhardt, as clear as ever in his blog: Congress and the Belief That Human Life Is Priceless