How pharmaceutical companies game the patent system

When these companies compete, in the current system, the people lose.

TAHIR AMIN: There's a great quote by a German economist from the 1700s, and it got translated into a book by a Cambridge professor, it's called Kicking Away the Ladder. And the idea being, when you reach the top of the ladder, you kick it away so that no one can climb up it. And that's how the laws and the trade rules get framed in intellectual property, is you don't want someone to compete. So intellectual poverty really is about the political economy of comparative advantage and who holds the power and who really can then dictate how economies work in this modern economy.

Pharmaceutical companies—typically what they will do in the small molecule space, which is the organic chemistry space—so there's a lot of products that are based on small compounds—what they'll typically do is get the first patent, and it's the broadest coverage to protect the area that they want to do the research in. And typically, the first patent could cover millions of compounds, which they've screened. And then they will get into looking at which of those compounds have the best properties for a particular disease area they're going to look at, and then they will formulate it.

And typically, in the first patent, they will cover all those aspects broadly so that they've ring-fenced off the area so that nobody gets into that research space. And then typically, they'll add another patent, which we'll talk about how they deliver the product, the compound, into the body. And then they will then find various ways to tweak the dosage form. They'll say, "Well, we used to have three pills and we'll make it into one," or "We will change the coating of the drug to get fast/extended release."

Now, people might say, well, something innovative in terms of putting three pills into one, it never existed before for a particular product. "That's inventive, that's innovative." I would say it's more innovative in the sense of somebody just applied it, but the basic science behind it has already been done, and it's known that it can be done.

Now, science isn't exact, for example. Some things don't work with every particular chemical or every particular bio-logic. But largely, you would know to try it. It's been done before, you know that there's a root there. So for me, that is not an invention. That is probably maybe more innovation in the sense of, "I've taken existing science, I've reapplied it, I've come up with a different product." Now, for the purpose of the patent system, I don't think you should get 20 years for that. I think, yes, your investment should be rewarded. That's fine. That, for me, is an incremental iteration of existing science, of existing knowledge. But the counterargument to that then is, "Well, if we don't give them something— if we don't give companies this incentive, they won't come up with these slightly varied formulations." And my answer to that is, "Fine, we want those, but you don't get 20 years for it."

And I think that's where this one size fits all, "putting everything into the patent system as the incentive" model is skewed now, because companies have worked out how to game the system. And I think this is where we need to step back and realize, do we need a different model for those low-hanging fruit type, slightly innovative tweaks? I don't call them inventions, because, for me, innovation is a byproduct of invention. Invention comes first. That's the really new path-breaking science. Innovation is just commercializing it.

When we use the term planned obsolescence, which is a strategy that developed during the Great Depression, because there was a need to keep people consuming. Consumption was low, investment was low. And so the term innovation—how do we keep people to buy the next color car? And we've seen that evolve with marketing, with better understanding of how consumers consume and the psychology—And so when I think of the term innovation, I don't see it as just progress or something that's new. I see it as a package of all these things, particularly in the work that I do in the pharmaceutical field.

The pharmaceutical industry is very astute at being able to say, "We've got this new drug and it's innovative." And so really it's scientifically not new for the purpose of a patent. It may be useful in a different way. But what happens anyway is we muddy everything together, and so the extraction of monopolies as a result of the misuse of innovation is what concerns me the most. Now, there isn't a perfect definition of innovation, because it can mean many different things to many people. But I feel in society today, we feel innovation is godlike, it's the king, it solves everything, it's our idea of progress. And a lot of it isn't progress. They're just incremental, but they're not inventions, which is what the patent system is about. And I think that's where we muddied everything up, and I think deliberately so. Because it's easier to claim an innovation. It's harder to claim an invention, because there, that's a higher bar.

  • When a company reaches the top of the ladder, they typically kick it away so that others cannot climb up on it. The aim? So that another company can't compete.
  • When this happens in the pharmaceutical world, certain companies stay at the top of the ladder, through broadly-protected patents, at the cost of everyday people benefitting from increased competition.
  • Since companies have worked out how to legally game the system, Amin argues we need to get rid of this "one size fits all" system, which treats product innovation — "tweaks" — the same as product invention.

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