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 Academics
Still Believe Patent Laws Stifle Innovation
Jennifer Arnold
Recently in the report entitled, Toward a
New Era of Intellectual Property: From Confrontation to
Negotiation, the International Expert Group on
Biotechnology, Innovation and IP, revisited the idea that a
restructuring of international intellectual property (IP) laws
would better promote innovation. The debate, however, about
the effects of IP rights stifling innovation in the biomedical
field is not really a debate at all. It is a discussion that
continues in largely academic circles essentially unfettered
by input from those who create it, those who work it and those
that benefit from it. IP, particularly biomedical patents
related to drugs and the tools used in the drug discovery
process, is most often cast in a negative light as the cause
of a breach between innovator and user. The examples and
arguments put forth to support this position have not changed
substantially over the last decade.
Often the concern is framed as a “biomedical anticommons
effect”1,
used to describe a
coordination breakdown where the existence of numerous rights
holders (patentees) frustrates achieving a socially desirable
outcome (drug development). It has typically been
suggested that a proliferation of upstream
biomedical research patent rights deters downstream
innovation, with the result being that biomedical research
patents become obstacles instead of paving the way for drug
development. Ten years after similar publications on this
proposition, do we see any evidence that a proliferation of
biomedical research patents has prevented or deterred drug
development?
If biomedical research patents had stifled drug development
during the last ten years we would expect to see a decrease in
biomedical investment, the number of compounds entering
clinical trials and the number of new drug applications.
According to a recent BIO (Biotechnology Industry
Organization) review in 2007, the amount of venture capital
funding for biotechnology companies has continued to increase,
the number of biological compounds entering preclinical trials
continues to increase and the number of IND (investigational
new drug) applications received by the FDA continues to
increase. Most importantly, this review could find no evidence
to support a contention that academics routinely abandon a
line of research due to patents and the enforcement of IP
rights. Contrary to the anticipated biomedical anticommons, it
would appear that the public has, and continues to, benefit
from the advancements made in the biomedical sector over the
last ten years and that drugs of the future continue to be
actively pursued.
We have seen increasing evidence that both large
pharmaceutical and smaller biotech companies, are motivated to
work alongside academia and other public institutions to
advance the drug discovery process. Numerous consortiums and
private-public partnerships (for example the Quebec Consortium
for Drug Discovery, the
Neuropsychiatry Drug Discovery Consortium in Japan and
Europe’s Joint Technology Initiative) have sprung up
acting as a meeting ground for biomedical researchers to bring
their knowledge together and work towards the common goal of
accelerating the drug discovery process through improved
technologies and processes. These private-public partnerships
provide the ideal conduit to further the development of R&D
initiatives. The majority of R&D funding, however, still comes
from the private sector. Investing in the biomedical area is a
long term risk and patents provide the level of assurance that
private investors need to move forward with the investment.
What is the main cause of the breach cited between the
innovator and the user? Academics focus on how biomedical IP
allows companies to charge inflated prices for their drugs
and, because the monopoly is protected by the patent, the
consumer has no choice but to pay. This viewpoint fails to
address two key points. First, there would likely be no drug
for the consumer to benefit from if the biomedical company had
not invested the time and money into the R&D to bring the new
drug to market. Second, patents are a wasting asset. The risk
is always that an old patent will expire, a new patent will
issue or the technology will change and render the patent
obsolete. It is this exclusive monopoly on their invention
which allows pharmaceutical companies and smaller biotech
companies to ensure continued private investment. Patents are
a key to their economic growth and advancement. Strong and
enforceable IP rights are necessary otherwise the patentee
would have lesser motivation to continue innovating, and the
investor would have lesser incentive to risk the investment.
It is our belief that weakening IP rights is not going to
encourage future drug discovery and it will certainly not
result in cheaper drug costs for all. Without the focused and
continued financing of R&D in the biomedical private sector,
there are no publicly funded means to bring a drug through
clinical trials and to market. Patents and the strong
protection of IP rights will remain the critical factor in
driving the drug discovery process. Academic enquiry and
debate needs to consider and present the current economic
reality and more fully acknowledge the enormous impact that
biomedical IP has on the world economy.
The Canadian patent system is a good forum for this debate. We
have all the benefits of strong Intellectual Property Rights
which promote private investment, price control over our
patented medicines through our Patented Medicines Pricing
Review Board and our Patent Act allows for Experimental
Use Exceptions (Section 55.2), factors often barely noted or
meaningfully considered in current debates.
The Canadian academic community is able to pursue fundamental
research, including subject matter contained within the scope
of claims of patents and patent applications, provided there
is no intent to commercialize or seek financial gain. After
all, it is the threat of economic loss that motivates
patentees to sue potential violators of their patent rights
for infringement. Experimental Use Exceptions allow academics
or others to freely pursue purely academic interests or
private experimental research and to act as a complementary
R&D stream to the biomedical sector. The differences between
Canadian, American and European Experimental Use Exceptions
will be further examined in the next newsletter.
1
Michael Heller & Rebecca Eisenberg (1998) Can Patents
Deter Innovation? The Anticommons in Biomedical Research,
Science, 280, 698-701.
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