Hey world, take your medicine
06.16.2010
In:
Healthcare / Life Sciences,
Advertising / Design,
Public Affairs
You didn’t hear about it, but up until about two months ago U.S. bioscience innovation was looking at a near death sentence.
When a company creates a new bio product, it holds exclusive rights to that creation – a patent – for a defined number of years, As part of the wrangling that led to the Patient Protection and Affordable Care Act, Congress considered drastically shortening that window, or even eliminating it. If that had happened, countries like China and India – already successfully wooing U.S. biotech investments – would have found their jobs a lot easier.
The stakes are high. Last year, America’s bio and pharma companies led the world in investing a record $65.2 billion in R&D. Fortunately, Congress settled on 12 years of patent protection before makers of “follow-ons” or “biosimilars” can legally borrow intellectual property from the companies who pioneer new treatments. Know how drastically this would have changed our world? Imagine this…
First off, research-intensive bioscience companies would have severely cut research investment if they’d known the results would have gone straight into the public domain. Potential cures for Alzheimer’s, AIDS and cancer? Kiss them goodbye.
That’s because discovering new, marketable science is highly inefficient. Only one in 10,000 new compounds ever gets FDA approval. By the time that happens, its creator has spent around $1.2 billion without making a cent. The makers of biosimilars don’t face that R&D cost, so their products come to market more quickly and are cheaper when they get there. There is definitely a place for that savings in curbing healthcare costs, but if it were to kick in on Day One, dollars for research would dry up fast.
Secondly, investment follows more favorable regulatory environments. In Europe in the late 1980s, strict government pricing collided with a difficult regulatory system. That chilled innovation across the continent, raised doubts among private investors and allowed U.S. innovation to flourish. The same can happen here. In 2009 alone, capital investment in the sector declined by 75 percent.
Third: You guessed it. Jobs. We have already seen cost-cutting measures send U.S. pharma jobs to China and India. Paying that cost to stay competitive on a global stage is one thing, but shooting ourselves in the other foot by gutting patent protection would make no sense.
Lastly, people would die earlier. Since 1960, innovative treatments have increased global lifespan by nearly 20 years. Those improvements have been sharpest in the poorest countries, where people benefit from you and me paying full price for medicines in the U.S. If we were to abandon our innovation agenda, those poor countries would have no hope. And given our lifestyle choices, it wouldn’t take long for the effects to hit Americans too.
Bio products are expensive here because they can be. It may not be fair for a few countries to fund the burden for the rest of the world – but neither is dying from a simple, preventable disease. We need patent protection for all intellectual property. But other countries need to do more, too.
Former FDA Commissioner Mark B McClellan put it this way. “If we do not find better ways to share the burden of developing new drugs and biologics, all of us will suffer. The benefits of these treatments are global, and so if we think only of the short-term interest of our own country, we all lose the opportunity for a healthier world. The heart of this problem is that we are not all paying our fair share of the costs of bringing new treatments to the world. And this problem is getting worse.”
The clock starts winding down on a patent early in the process, as soon as a new compound shows promise – not when the medicine is ready to be marketed. By the time a bio product is ready to begin earning back the millions a company spent to create it, much of its patent protection may already be used up.
So think twice before you chalk up patent protection to corporate greed. We’ve come to expect miracles from our bioscience industry. Expecting them for free, which is what a weaker patent system would amount to, is hardly realistic.
