With thanks to my good friend Dr. Michael Cohen, I came across an article in the New York Times about yesterday’s FTC report into the interplay of drug patents, litigation, business and competition. The report is some 270 pages long, so I’m not going to be reading it any time soon, but the central allegation is that some drug manufacturers are illegally distorting the post-patent market for generic medications. They do so, it is contended, by agreeing that both the patent holder and the generics maker will enter into a moratorium upon the expiry of a relevant patent, during which time neither party will bring their (competing) generic drugs to market.
Such clauses are usually found in settlement agreements between the companies after the commencement (or threat) of an action for patent infringement. It is easy to see how the parties can benefit: both avoid costly litigation and can be clear as to the road ahead; the patent owner doesn’t risk having his patent declared invalid (if anything its exclusivity is lengthened); and the generics manufacturer avoids the risk of having his business crippled by an injunction and/or a damages award.
But these agreements also leave patients with higher medical bills since patented products are generally much more expensive than their generic versions (which can often be freely substituted), hence the interest of the FTC.
Big pharma asserting rights to the exclusive use of its products always brings up difficult ethical and legal questions. Ethically, we debate whether certain commercial agreements should be outlawed only because those involved have shared a solution to a problem (the very quid pro quo of patent protection) in the areas of disease and the alleviation and eradication of pain? Is it desirable to reduce the protection given to those who contribute to such vital areas of public life? Legally, we ask, amongst other things, what these agreements do to competition within the industry? And no sooner are we grappling with these issues than we are pondering whether we should prevent “therapeutic” industries from maximizing their profits while allowing the financial industry to destroy lives by maximizing theirs?
The truth is that utility patents offer the same length and scope of protection whatever their industry of application. Big pharma may well remain incentivized to invest in R&D if patents for therapeutic products had shorter terms, or were made subject to broad compulsory licensing conditions, but that should be a matter for considered debate and any required changes to practice should be prescribed by carefully drafted legislation which tackles the issue head on.
After all, a surgeon is destined to fail his patient unless he uses the right tools.