Edwards: great progress on patents

Posted on June 22, 2007 by Lessig

John “Its the substance, stupid” Edwards has a fantastic call for more reliance on prizes, not patents for certain drugs. I know there’s lots that’s changed about the Edwards candidacy this time round. But I’m very happy the focus on smart, careful policy recommendations has not.

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9 Responses to Edwards: great progress on patents

  1. rodander says:
    June 24, 2007 at 9:51 am

    This post is a joke, right? Really, the part about “the focus on smart, careful policy recommendations” from John Edwards is meant sarcastically, isn’t it?

    Just in case it was meant seriously, where do I start . . .

    Let’s try this, from page 20 of the Edwards tome. Using “prizes” instead of patents will cause “the government to pay more up front”, but will “result in lower costs to patients”. Who do you think pays the bills for government? Taxpayers are patients, too, you know.

    This is a good idea only if you don’t like the advances in pharmaceuticals over the past few years. Maybe you don’t understand this, if you are lucky enough to not have a loved one whose life has been saved or improved by the amazing new medicines of recent years.

    This is also a good idea if you like a planned economy (and you are one of the ones liking a planned economy only if you are one of the planners). Key quote: “Key questions about . . . the appropriateness of prizes for different diseases” jumps out in this regard.

    In short, you can’t be serious.

  2. N MONNET says:
    June 25, 2007 at 3:17 am

    “Let’s try this, from page 20 of the Edwards tome. Using “prizes” instead of patents will cause “the government to pay more up front”, but will “result in lower costs to patients”. Who do you think pays the bills for government? Taxpayers are patients, too, you know”

    There are more number than +1, 0 and -1, you know.

    The governement will pay more *than it does* now; nowhere does Pr. Lessing (or Sen. Edwards) that it will pay more than is paid by *patients* now. In fact, the sum will be much less.

  3. rodander says:
    June 25, 2007 at 10:06 pm

    But where does the money come from?

    Let’s assume that the shareholders of a BigPharmaCo expect/demand a certain return on their R&D investment expenditures (including the cost of R&D on things that don’t pan out). Not an unreasonable expectation or demand.

    For a new medicine to be developed, the expected ROI has to be sufficient to pay for the investment, whether the ROI comes from profits (incl. sole source profits for some time) or “prizes”, as proposed. Or they don’t make the investment.

    So one must conclude that the expected amount of the prize must have some reasonabley close relationship to the expected ROI from patent-protected profit, or royalties etc. Under the “prize” regime, the ROI comes from the Gov’t. Under the patent-protected profit regime, the ROI comes from sales.

    So my guess is either that taxes fund the ROI or the BigPharmaCo takes the risk that they’ll make money on the new drug. Either way, there is a cost associated with this development. And it doesn’t go down just because John Edwards says it will.

    Of course, under the tax regime two big things still happen. One: more wealth transfer from the more heavily taxed. And Two: planned economy control by virture of the Gov’t deciding which medicines for which diseases get big prizes, and which don’t (as admitted by the Edwards document). Both of these are bad.

    Or Thing Three happens: No more development of new medicines. Probably the most likely result.

    It is hard for me to fathom someone less well-situated to design a health care system than a plaintiff’s medical malpractice lawyer.

  4. ACS says:
    June 27, 2007 at 7:22 am

    Ironically, it is prizes and not patents already. The majority of reward for pharmacological and biochemical research is in prizes and grants given by the government. The FDA only approved 120 new drug therapies in 2001-2002 (most recent figures I could find). This is a significant drop from previous years.

    The issue is further exentuated by the fact that many of those patents were for existing drugs being “used for a new purpose”. (We will all recall the monumental battle Eli Lily engaged in to have its prozac product relisted on the basis it could be used as heart and mental health medication.)

    Just consider, Eli Lilly only puts out 20 products, Bayer AG puts out 60 (most of those are crop science and/or out of patent anyways ie Alka Seltzer), Bristol Myers Squibb only produces 18 products (8 are patented). The fact is that big pharma that operates under the patent system do not produce the majority of drugs used in the modern healthcare system.

    A more serious point in favour of Edwards approach is the relative funding of R&D at big pharma – it is insignificant. Big pharma spends most of its overheads on advertising and marketing rather than actual R&D, hence the shift towards a smaller range of products. The R&D put into a product by a company usually consists of patents over the large scale production of constituent parts and chemicals identified by public university researchers.

    In the end the real winners of pharma patents being replaced by prizes will be the public, particularily those that cannot afford big pharma costs. Seeing as that is Edwards base I am hardly suprised he has adopted this policy.

  5. ACS says:
    June 27, 2007 at 7:28 am

    Apologies for that – Will blame it on the new site.

  6. Christian Romney says:
    June 27, 2007 at 10:56 pm

    @rodander > Or Thing Three happens: No more development of new medicines. Probably the most likely result.

    That’s a pretty huge leap you’re making. I’m not saying I agree with the idea, but a smaller margin doesn’t necessarily mean everyone packs up and goes home.

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