Brazil Breaks Patent to Make AIDS Drug

Andy Tai writes: "In this CNN story, Brazil decides to break a patent over an AIDS drug for public benefits. Brazil will produce the drug domestically without agreements with patent holder, the Swiss pharmaceutical company Roche. Brazil's efforts to fight AIDS have been praised internationally, and it successfully prevented the US Government from bringing complaints in the WTO on behalf of the drugs industry. This may set an important example that public needs justify the disregard of patent protection." There's another article in the Boston Globe about the decision.

Comments

Example?

[sllort]

"This may set an important example that public needs justify the disregard of patent protection"

It sets a few more examples, too. If you're an AIDS patient, it sets the example that you should fly to Brazil, right away. If you're a drug company, the example is to look into carpet bombing Brazil, and if that fails, stop developing drugs no one will ever pay you for.

Just because software patents are patents on math & therefore stupid doesn't mean all patents are stupid. Pharaceutical R&D is intensely expensive. Screwing the companies that fund research is a bad solution to what is at heart a political problem.

Re:Example?

[kalifa]

> Just because software patents are patents on
> math & therefore stupid doesn't mean all patents
> are stupid. Pharaceutical R&D is intensely
> expensive. Screwing the companies that fund
> research is a bad solution to what is at heart a
> political problem.

There is some truth in this, however these companies would have more credibility if they did not spend much more on advertising, public relations, lobbying, sponsoring sports events, etc., than on research.

There is currently a bill which is about to be passed in the EU which would allow advertising on prescribed drugs, as it is already the case in the US. I hate this idea. It encourages overconsumption of drugs, it diverts billions and billions of dollars (or are they euros?) from more useful tasks, and it encourages pharmaceutical companies to focus on comfort-oriented drugs, made for wealthy retired in Florida or in the south of France, rather than on life-saving drugs.

Today, drug companies fight against each other with marketing, lobbying and politics: millions and millions are poured into "lobbying" (read: corrupting, but legally, the typical American way) drugs-regulation authorities, to make sure that competing drugs are not approved, or that the approval is delayed, to make sure that their exclusivity on a product is extended, etc...

Inventive, good-for-humanity research is secondary. These companies will be allowed to complain on what is going on in Brazil when they have changed their ways.

Re:Example?

[cpt kangarooski]

It is difficult to discuss foreign patent systems unless you're quite familiar with them. I
hesitate to do so.

However, let's say, hypothetically, that it was the US that decided to do this, instead of
Brazil. In that case, they'd be perfectly justified in that action. It would decidedly not,
repeat NOT, be stealing. The patent holder was GRANTED that patent by the US because it was
felt that doing so would have a public benefit. But ultimately, if there is a greater public
benefit to be had in not granting, revoking, ignoring, etc. a patent, then THAT is the
appropriate course of action.

Yes, there is a danger that this sort of thing could remove incentives for the research to
be done. That has to be weighed when making the decision: would the greatest public benefit
come about by this course of action, even in the long run? Again though, the interests of
the patent holder itself are not particularly important. No one can say with certainty what
the result will be. The argument that patents are necessary is belied by the limited term of
a patent; all patent holders lose the exclusivity of the rights to their invention, it's
just a matter of time. Why? Because it is beneficial to the public that this be the case.
It's highly unlikely that an everlasting patent (and the corresponding powerful, long-lived
and dangerous monopolies that would arise) would really spur the inventor on. Or at least,
that's the decision that's been made, and has been stuck with for centuries.

Don't go around thinking that this is a bad thing. If Brazil fulfills its duty to its
people, that's the most that can be hoped for. This type of decision does not prevent
innovation, at worst (and its unknown if this will be the case) it merely slows it.

You also make the mistake of believing that there is such a thing as "Intellectual
Property." There is not. Any examination of the nature of property and the nature of
information such as ideas will reveal the truth. Brazil cannot steal what is unstealable.
And if they choose not to grant any rights to the inventor, there is no external authority
from which the inventor might gain those rights. They do not come about as a consequence of
his labors, they are a grant made by the government, at the direction of its citizens, and
for some particular public aim.

Re:Example?

[Erasmus Darwin]

"for example, it's taken for granted that people *will* work without compensation on many things, e.g. Open Source software."

Announcing the release of OpenAntiHystX 0.2b:

BECAUSE THE DRUG IS LICENSED FREE OF CHARGE, THERE IS NO WARRANTY FOR THE DRUG, TO THE EXTENT PERMITTED BY APPLICABLE LAW. EXCEPT WHEN OTHERWISE STATED IN WRITING THE COPYRIGHT HOLDERS AND/OR OTHER PARTIES PROVIDE THE DRUG "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF THE DRUG IS WITH YOU. SHOULD THE DRUG PROVE DEFECTIVE, YOU ASSUME THE COST OF ALL NECESSARY MEDICAL TREATMENT OR FUNERAL COSTS.

What's new in 0.2b:

• Removed a protein group that caused some people who're allergic to peanuts to enter anaphylactic shock, with potentially lethal consequences. Thanks to the widow of Jerry Henderson for reporting this.
• The specified manufacturing process was resulting in residual benzene being left in approximately 4% of the pills in each batch. Temporary workaround applied (testing each pill) until we can come up with a permanent fix.
• I've set up a paypal account so people can contribute to the FDA approval cost fund. It's still a long way off, but we should probably start saving up now.
• I've had several people mail me about abdominal cramps. MAKE SURE YOU'RE USING THE LATEST VERSION. The abdominal cramp issue was fixed, along with several other bugs, back in release 0.2a.
• After several round-table discussions with both RMS and the FDA, we've been able to agree that the licensing clause requiring development forks to use a substantially different name (so as to avoid consumer confusion) is acceptable within the Free Drug tenets.

This is not a good trend to cheer.

[Shivetya]

There are a few reasons this is a bad trend. Now they are using a public health problem as an excuse to void a valid international patent because they did not get the agreement they wanted. This plays very well in the press, "bad evil company would rather see people die than sell their stuff cheaper" instead of saying "country refuses to pay a fair price for drugs to save its own people"

Want a story that is similar, but on a more "person" level. White farmers losing their property in Zimbabwe, because its not fair that they have it.

This is the new trend, government are going to take what they want and justify it in any shape or form. While they start off doing this with the cover of "saving lives" how long before it becomes anything they want?

So here are some of the real problems.

1. Basically Brazil breaks the agreed internation law and makes the stuff for free, thereby forcing other nations to either follow their example of pay the difference. (see South Africa's example - do it or we take your companies assests)

2. Reduces the possibility of region specific drugs NOT being developed because companies rightfully fear losing all investment. (some diseases are more prevalent in certain areas of the world - that is an obvious statement).

3. Raises spectre of loss of intellectual property on other levels, and more and more are confiscated for the "public good"

4. Increases the likelyhood of similar industries leaving "hostile" countries furthering the problem that country faces.

When do we stop? Who can judge what is a fair price for something? Who can judge what can fairly be patented?

Apparently people are willing to allow those with the guns to do it, and not realize its the first step to losing their own rights.

Re:This is not a good trend to cheer.

[Hadean]

>While they start off doing this with the cover of
>"saving lives" how long before it becomes anything
>they want?

This is some of the most annoying rhetorics I've ever heard on Slashdot... If we let kids watch horror movies, how long until they start watching porn and God(tm) knows what else? If we let marijuana go legal (for health reasons, of course), how long before we legalize cocaine? If we let guns in the hands of kids (for hunting, of course), how long before my 5 year old baby starts to shoot one? You can use that sentence for ANY bloody argument, and it's starting to tick me off - how many times do Slashdotters have to hear/say that? How about, if we start letting pharmaceutical companies charge whatever they want, in spite of the deaths of thousands, when will they stop and actually care about humans? You'd think after the UN caught a half dozen of these Companies for fraud (as I mentioned in another reply, sending expired medicines, etc.) that people would start to look at them more critically... I guess not... Research, no matter by who, is automatically a Good Thing (tm) to some people I guess... even if it means to the deaths of others.

*sigh*

[omarius]

This should make sick every one of you that has a Free* bone in their body. Drugs are inventions, as much as gadgets are inventions, and this is IP theft, plain and simple. If I spent a fortune researching and creating a drug, you bet I would be pissed if someone else started making my drug without my permission.

I like the idea of saving people, and it would be hard to sanction or punish Brazil for doing this -- since the rest of the world would boo us off the planet. But this is wrong, people. Hell, in the long run, education will save a lot more people than this drug. This drug will not make Brazillians stop fucking each other or sharing needles or whatever it is that Brazillians do to get AIDS.

But instead of educating and changing killer lifestyle habits, their government steals IP. This world is going to shit. But that's just MHO.

And to be off topic for a second, those moderators who disagree with me may feel free to moderate me down as a troll for having an opinion (since that's what happened the last time I posted) -- but that won't make me less right. ;)

-Omar
*as in Libertarian free, not social-welfare-state free. >;)

Drugs for Profit

[cd-w]

While I hate to side with the large drug companies on such a sensitive issue:

It is a fact of life that if the drug companies do not get paid for their R&D, then they will not bother to produce new drugs for combating AIDS and similar diseases.

As proof of this, consider how many new Malaria drugs are produced? Basically, there is no profit in R&D for malaria, so drug companies simply don't bother.

So, in the short-term this may seem like a good idea, but in the long term it could do serious damage to the search for an AIDS cure.

Re:Drugs for Profit

[GregWebb]

This is a serious post, not a troll, not flamebait but I'm still fishing out the asbestos modem.

Uncomfortable a truth as this is, it only highlights the fundamental problem of capitalist research. When (a category of) research into improving the human situation is only carried out by capitalist organisations, that research is inevitably going to be targetted around the needs of those most able to pay for the end result. Who, let's be honest, aren't going to be the greatest possible recipients of research to improve the human situation.

Now, AIDS research is very important. Partly due to the massive third world AIDS pandemic (except, oops, they can't afford the drugs...) and partly due to generic research intro retrovirii. But think about what could happen if the money put into various other bits of research was spent on, for examples, cholera, river blindness, malaria, measles and so on. I'm not going to provide examples of possible targets for the money to come from, that's just going to get emotive.

Think about it, though. If medical research was primarily (or entirely) funded by society as a whole as opposed to by the proceeds of research then, in theory, we wouldn't have this problem. While it remains a part of a capitalist system it is inevitable.

I'm not a communist (Honest! Capitalism has its uses and the people have a right to choose!) but it's difficult to escape the conclusion that this sort of case exposes the limitations of capitalism rather starkly.

Say bye-bye to any new AIDS drugs

[NineNine]

Well, that's probably going to be it as far as new drugs in the fight against AIDS. Drugs cost millions (billions?) to develop and test and distribute. If other companies are going to allow these patents to be violated, there's virtually no incentive for drug companies to develop any new drugs to fight AIDS. So yeah, Brazil and other countries who adopt this tactic may get some short term gains, but long term, it's going to kill AIDS patients. Literally.

No pharmacudical company is an island

[SirSlud]

The points regarding that this action will discourage R&D are probably true, to the extent that this move may cause companies to reduce their R&D budgets. But what good is R&D and new drugs and technologies if only x% of the world can take advantage of developments supposedly in the name of 'humanity'?

There are countries out there that could have many, many, many more people and companies working on the same solutions, thus spreading the R&D costs across more organizations and making information and research sharing more cost effective. Unfortunately, those countries are having a tough time, in various capacities, keeping their population alive, let alone wealthy enough to invest in new companies, research facilities, etc. Of course, neo-liberalism preaches the 'more for me, less for you' mantra, so the existing companies don't really warm to the idea of more 'competition'. If they could have their way, everyone in said countries would buy their drugs, but not get well enough to spur technological development in that country. Poor people are always a companies favorite customer .. no leverage, no money management skills (when you don't have money, you don't learn how to manage it); and less education increases the likelihood that you will repeat the act that caused you to require the product in the first place somewhere down the road.

For an industry that was caught redhanded not so long ago in an industry-wide price fixing scam (yes, Roche participated), I think they have alot of nerve complaining about losing patent fees in areas where their cure could stop an epidemic of life-threatening deseises, in addition to helping set the stage for opportunities, development, research and growth in the countries that need it.

Re:Patents are theft

[Erasmus Darwin]

"The mere fact of investment does not entail a responsibility for returns."

If we don't provide some sort of protection, there won't be any incentive for people to invest in the first place. Would Roche have devoted the money necessary to develop this drug if anyone who is capable of manufacturing it could do so? Hell no. This drug has saved lives (well, extended them, at least -- which is all any drug can really do). This drug would probably not exist if it weren't for patents. QED...

Here's another opinion - you're nuts

[DG]

OK, so the subject line is a little inflammitory, and thus, by actually stating an opinion, I too am moderator-bait. We share that much at least. ;)

But as for your opinion itself... can you actually be serious?

You've got a country full of dying people. There's a drug available that can save a goodly number of them. It's expensive, and you're poor. You have the ability to reverse-engineer the drug (or just steal the formula outright, whatever) and produce it yourself for minimal cost.

Would you, as the leader of this country, REALLY allow people to DIE a slow, lingering, and very painful death just because a piece of paper says you have too?

I'm sorry, not me. As a hypothetical Brazillian leader, my duty is to serve the people of my country, not some foreign drug company. If they won't play ball on price, then we do what we gotta do to save them.

The point on education is a salient one, but this is not a zero-sum game - producing the drug does not mean a reduction in education, nor does increasing education do a dammned thing for those already infected.

This case is one of the best examples for the "IP is bogus, information wants to be free" position that I've seen. We're not talking about music files or games here, this is information that will actually SAVE REAL HUMAN LIVES, that a corporation wants hidden and protected SO IT CAN MAKE MONEY.

If that doesn't make you sick to your stomach, I don't know what will.

This is my real issue with the Libertarians of the world. There is no place in their world-view for the public project, done for the benefit of mankind. Everything must have a profit motive, and protecting profits has priority over all else.

Just like Marxist-Leninism goes too far, by wanting _everything_ state-owned and state-run, Libertarian goes too far by giving all control to the private sector. Either extreme is insane. The Real World requires compromise, and I for one am glad to see Brazil stick up for REAL freedom, and do what is right.

Link to PDF about what this drug is/does

[Shivetya]

http://www.viracept.com/3_DOSING/AGVR.pdf

Its pretty complex, but tell me why Brazil or anyone else should have to pay at least something for developing this, let alone testing it?

Law Or Lawlessness?

[Artagel]

How Brazil handles itself *after* its decision to go ahead and manufacture the drug will define whether Brazil is a country that stands for the rule of law or for the rule of lawlessness.

Brazil is exercising one of the undisputed powers of a sovereign -- to take what it needs. A lawful sovereign pays reasonable compensation for what it takes. Thus, in civilized countries, when land is taken to build a road, the landowner does not get to veto the road, does not get to extort an unreasonably high price for being the last piece of land needed to build the road, etc. He gets reasonable, just compensation, and such a right is guaranteed by the courts of the country.

In common law countries the "rule of necessity" is not limited to sovereigns. For example, you are permitted to tresspass in certain conditions because of necessity. A classic example is a ship docking to avoid a killer storm. That does not mean not having to pay afterwards for what you take, or what you damage, however. "Necessity" defines conditions where you can "take it and pay a reasonable amount."

Brazil had a contract with Roche to provide drug that it is going to honor. Brazil is gearing up to provide its own generic version of the drug after the contract expires because it has been unable to reach agreement with Roche as to a price at which Roche will continue providing it. Brazil is taking. If it decides to take for free, it stands as an example of lawlessness. In such a case, it should be punished heavily by international trade organizations.

If it taking because of the impending necessity, with the intent to pay an agreed amount afterward, then it really is a tempest in a teapot. "Reasonable" in this case is certainly *not* what the generic would cost on the generic market. Reasonably prices are not negotiated under the threat of imminent death -- that's why courts often settle the "take and pay" price assigned to necessity situations.

nice try, but...

[tewwetruggur]

...you have unfortunately replied to someone who works in the pharmaceutical industry.

I do wish people would stop it with the "how are they going to fund research?" crap. If you look at the big picture of drug research, and where the costs really are, you would see that a lot of it is inflated numbers caused by "economic factors" and other such nonsense. That is how a lot of universities are able to continue to do excellent pharma research. The companies are hindered for less noble reasons than academia.

Re:nice try, but...

[Harmast]

I do wish people would stop it with the "how are they going to fund research?" crap. If you look at the big picture of drug research, and where the costs really are, you would see that a lot of it is inflated numbers caused by "economic factors" and other such nonsense.

I think here the problem is they mean one thing when they say R&D and you hear another R&D.

As I pointed out above the real R&D cost for drugs is not in research as you seem to mean: isolating chemicals, testing initial effectiveness, but in development: mass production, human toxicity, and, most importantly, FDA approval.

In general university researchers do much less pharma research in those areas than drug companies (when was the last time UConn got approval for a drug). Those costs, which are often incured for a drug that will never see approval for various reasons, are the real R&D costs.

Unfortunately, drug company PR flacks just use lumped costs when explaining this instead of breaking it down (talk to the people on the clinical side of R&D of a drug company to get a better picture) thus leading to said confusion.

Re:Way to fucking GO!!

[Bobo the Space Chimp]

> These pharmaceutical companies are turning over
> _billions_ every year, making bucketloads of cash
> out of other people's misery.

Making bucketloads of cash ENDING other people's misery, which is more than you, or Hillary, or others are doing.

Funny how greedily searching for solutions to others' miseries, miseries that those suffering pray for a solution to, solves those problems all the while people stand on rocks pontificating how evil that process is. Yet when you look in their socialist bag, you don't see too much at all.

2 Billion R&D == 5 Billion profit

[slashkitty]

Just take a look at their profit statement:


http://www.roche.com/home/investor/inv-finance/i nv -sales-key-figures-hy-2001.htm

They are pulling in cash hand over fist. Now, why couldn't they negotiate a lower price w/ Brazil so that wouldn't send half their budget to Roche?

I wonder

[mjgamble]

How many /.ers have worked for a pharmaceutical company? How many have seen 7 years of research go down the tubes after promising studies find that the drug has a serious adverse effect on .5% of the people taking it and the last 7 years of your life were for naught.

Does anyone around here understand how business works anymore? Where do you think retirement funds get funded from? Corporations are not run by some maniacal CEO hellbent on a conspiracy for world domination. I'm not out for world dominatino. I know my manager isn't. I've met his boss and his bosses boss. At what level do people instantly turn evil?

Why do you think companies spend, on average, $1 billion to develop each new marketable drug? For fun? A drug spends as much as 10 years in the research phase before going to market. Anywhere along the way it may be found to be a) not as affective as hoped or b) not safe enough to market. Rinse, lather, repeat. Assuming it does make it to market, it may only have 5-7 years before generic competition forces the original research company to stop selling the drug for any kind of profit. The government, btw, does not contribute any measurable percentage of the research cost to the private company.

Don't like marketing? I hate it more than anyone else out there, I assure you. I see it every day and it makes me ill. But it helps make sales, and it subsidizes low income patients (free samples to doctors from sales reps mainly go to elderly and those without health insurance). And all those revenues go back to, guess what, research for more drugs.

Don't like the pharmaceutical companies and their high prices? Don't buy their drugs. I will help keep them in business. I'm paying for a service (research). A drug's price isn't the price of materials or shipping really. It's payment for the service they did by spending time and money researching and refining a single compound out of tens of thousands that may help me live longer or better. But to turn around and say thanks and not be willing to pay for it is asking thousands of people to work for free and without reward for all their hard work.

As much as I would like to think that helping my fellow man is enough of a reward, I know that it isn't. It doesn't pay my light bill or put food on the table or get me any of those nice shiny computers I play with. I work to make a living to pay for things that I need (and the extra goes to things I want). Extrapolate that up from the individual and you have corporations. That's just the way it is. They need money to pay the light bills, run their supercomputers, and pay the scientists. And you need to survive the drug pipeline (go talk to Bayer and Merck about how much those suck right now).

[Disclaimer: none of this is representative of my employer, my clients, or anyone but myself. Two cents.]

Sometimes I just can't believe...

[under_score]

how fucked up the world is these days.

Come on, the fact that this had to happen is a result of the worst possible combination of MORAL decision making. The Brazilian government is making a bad decision, but it is still the best decision under the circumstances. International law and patents are important yes, but human lives are infinitely more important. Does anyone here get that?

And don't go thinking about any "long-term" crap about saving lives by maintaining corporate profits on research through patents. That's BS too. Governments have a very direct responsibility for the quality of their constituents lives. That's why we support (through taxation usually) research on environmentally friendly technologies, basic reasearch on health, etc. That is the long-term stuff.

By breaking the patent on AIDS drugs, Brazil is definately keeping their long-term interests in mind:

1. healthier population leads to more human resources
2. healthier population leads to more grateful constituents who then focus on proactive behavior rather than complaining about their govt
3. corporations learn that there are limits to how far they can push their greed - will start to strategize in a new conceptual framework and will certainly still be "successful" in creating value for shareholders
4. good example set of human lives before profits for the rest of the world - allows Brazil to have an excellent international reputation allowing their citizens more access to international facilities, governments, and other processes

This is an excellent thing to cheer

[FreeUser]

There are a few reasons this is a bad trend. Now they are using a public health problem as an excuse to void a valid international patent because they did not get the agreement they wanted. This plays very well in the press, "bad evil company would rather see people die than sell their stuff cheaper" instead of saying "country refuses to pay a fair price for drugs to save its own people"

Except that three assumptions here are inaccurate:

1) Monopolies do not yield anything remotely approaching "fair prices" without serious government intervention (e.g power companies and baby bells) and often not even then.
2) Monopolies aren't necessary for R&D expenses to be recouped, and a reasonable profit to be made.
3) You imply that the characterization of "bad evil company would rather see people die than sell their stuff cheaper" is unfair and inaccurate, when in fact the historical and contemporary evidence is rather strong to the contrary.

Software patents are bad. So are every other form of patent that grants government enforced monopolies and undermines the very free market upon which our economies depend. There are other ways to finance expensive R&D besides grantintg 20 year monopolies and allowing said monopolies to extort exhorbitant prices from dying people and leaving millions of less fortunates to die (or extorting payment from their impoverished governments).

To paraphrase another blindly pro-IP comment: This should make sick every one of you that has a Free (as in liberty) bone in their body. Ideas are not property, nor are inventions inherently something to be possessed, except as a result of arbitrary laws which have turned out to have the opposite effect as was intended, namely to slow progress rather than accelerate it, and now in the process are actively resulting in the suffering and death of millions. Frankly, I do not care if someone who thinks they have a god given right to a monopoly on an idea simply because they won the footrace to the patent office is pissed ... I imagine King George (from whome we inherited this asinine system of entitlements in the first place) was pissed when the US declared independence and you know what? That didn't make it any less right to do so.

Re:This is an excellent thing to cheer

[Harmast]

So are every other form of patent that grants government enforced monopolies and undermines the very free market upon which our economies depend. There are other ways to finance expensive R&D besides grantintg 20 year monopolies and allowing said monopolies to extort exhorbitant prices from dying people and leaving millions of less fortunates to die (or extorting payment from their impoverished governments).

Really?

I would love to hear how. Outside of the government being the only source of R&D I fail to see how it would work in the drug industry.

The standard arguement against patents is it is cheaper for me to just buy it from you than to figure out how to make it. The time to re-engineer is enough to recoup initial costs and be competitive. An inventor who does not patent does not have to open his design to the public leaving any potential competitors to complete re-engineering.

For many industries this is arguably true. Reverse engineering complex machinery (both physical and virtual) takes time and money that are often better spent on leap-frogging ahead instead of just catching up.

However, a drug is, in the end, a chemical. Once isolated and make into a medicinal form it is relatively simple to identify it. That is assuming that you need to.

You don't, however, because the chemical and lots of stuff about it are public record and would be even if there was no patent. Why? FDA testing.

The real R&D cost of drugs is not research (identifying) but development, specifically all the human and clinical testing needed. This is not a simple or short process and extends from an experimenters first idea to full scale drug tests.

FDA regs require specific notekeeping requirements in the labs while isolating and synthesizing(see any good book on technical writing for an outine, if it does not have an experimental notebook procedures appendex or it is not a good one). This process continues throughout the process.

Human trials are not just X people with the target disease. The first step is dose a healthy volunteer and take vitals and blood work after 15 minutes. Then an hour. Then a day later. Then try a new dose. Months or years of these human toxicity tests preceed double blind testing for affectiveness.

At each step the drug can fail thus wasting all money to that point.

Thus isolating the drug, which is the effort a copycat does, is the least part of drug costs. The patent is there to repay these efforts and failed ones on the way.

Does this increase costs to the public during the patent period? Of course, because, as you point out a patent is a monopoly which does not set fair prices in the market sense (markets require multiple independent sellers and buyers to set prices). However, as the market sets fair prices it also weeds out inefficient producers. In a pure market enviroment jumping through the FDA's hoops will always be economically inefficient, thus an intelligent drug company manager will let the other companies do R&D and just copy their efforts.

The problem comes when all drug companies get smart. In these case the patent makes sense because government is granting a limited legal exclusiveness to those who make the expenditures to statisfy a government requirement that is the largest part of the drug price.

If you want to get rid of drug patents I would recommend getting rid of the FDA or require the FDA to pay the costs of testing.

Re:This is an excellent thing to cheer

[tmark]

On the contrary, monopolies aren't even *possible* without government intervention. You're thinking of 'oligarchies'.

Huh ? Monopolies ARE possible without government intervention. They certainly do NOT require government intervention - though this is often needed to BREAK monopolies.

Re:This is an excellent thing to cheer

[Harmast]

. Rather than granting 20-year monopoly entitlements, why not require that any company marketing a drug, even if it is copied from a known formula, either go through the same testing process as the "inventor" before they are licensed to sell their knockoff, buy a "license" for the certified product from the company which has already done the research and gotten the license to sell their product (probably the "inventor" at least initially), or pay a fee to the licensing agency equal to said costs to the governing agency, which fee would then be applied to further government funded or subsidized research, a portion of which could even go back to the "inventor" if entitlements really are your thing.

Wow, finally someone came up with a reasonable response. Each at least addresses the real issues that make patents attractive for encouraging drug research. In fact I think one would work very well.

That one is your second option which is a close relative to the patent, but without the ability to restrict licensing.

While the other two are interesting I would need to think about them somemore. The key problem is that while they address paying the testing costs of drugs that make the market those are only a fraction of the drugs that entering testing.

The sad fact is the current system requires companies to make blockbusters to recoop other costs (those huge marketing costs others cite in large part drug companies trying to make sows ears into blockbusters are increasing blockbusters) from failed drugs.

Perhaps the best idea would be to modify one of your ideas. I think government funded research is a poor second choice because it will often lack urgency that greed provides and that gave us, among other things, powerful AIDS drugs in a little over a decade of work.

However, what if we had the government do all the testing either on a first come, first serve, a bid basis (we'll pay x%), or maybe a profit percentage (similar to bid). Maybe charge the companies for testing for drugs that are licensed, cutting the researching company a break (to discourage all drug companies moving to a no research model) or an annual license fee (similar to a permenant government patent) until the drug is amoritized. Then the taxpayer only absorbs the costs for drugs the government won't let on the market, but companies pay for any drugs they can make a profit on.

Time for a REALITY CHECK and some FACTS!

[Tord]

I see loads and loads of comments here in support of the medicine company that either bashes or seriously questions Brasil's decision in this matter. I also see how their comments are given high moderation points for their insightfullness and I also see flaws in their reasoning and logic.

I therefore thinks it's time for a reality check and discuss some FACTS before we start to take sides:

1.Quite some comments says or hints that Brasil is breaking "international laws". Wake up. There is no international body declaring international laws. What Brasil is breaking is international AGREEMENTS on how to treat patents. Brasil is in their full right to break this agreement if they discover that it costs more and gives less than they anticipated. That the medicine company is crying "foul" is just to be expected, but their handling of this situation really asked for it.

2. How much of the medical research is actually financed by medical corporations that rely on patents for their income? I have no real statistics, but I remember reading that here in Sweden around half of the funding of cancer research is financed by "Cancerfonden" that gathers donations (from government, companies and individuals) for cancer research. Add to that all funding done by institutions as universities and hospitals and you find that commercial medical research is in the minority. Remember, this is in Sweden where we have an unproportionally big medicine industry compared to our population.

3. Remember that patents isn't just a protection of your discovery, it also blocks your competition from inovating along the same branch! Patents both rewards and stiffles inovation from time to time. There is no proof whatsoever that the patent system has led to a higher rate of innovation in any field ever. We have just followed a logical string of thoughts and reasonings to come to the conclusion that patents do increase inovation. This reasoning is built on the assumption that we have a mostly correct perception of the world.

4. People here are commenting on how patents affect a business that they don't know anything about. Many falls into making the same kind of generalisation that we constantly have to defend ourselves against, that patents are good and drive inovation and that there would be much less inovation without it. We know that it isn't true for software development. How can you state it as a truth for another industry that also differs a lot from normal mechanical innovation without really knowing anything about that industry?

5. Doesn't the fact that we are forced to chose between peoples lives and getting money to future research that will save peoples lives tell you that something is wrong with the system? We need competition and rewards to get research in medicine, but we don't need the blocking (in both research and applying the results) that the patent system gives.

There are other ways to raise funding, encourage competition and give rewards than just applying the patent system. Isn't it time we take a look at some other possible sollutions now that we clearly can see that the patent system doesn't work as it should in the medical field?

If the system is broken, then fix it...

Here you go...

[KnightStalker]

For Roche themselves, the company mentioned in this article. From part of their 2000 annual report, in a PDF ("Finance") available at: http://www.roche.com/home/investor/inv-finance/inv -reports/inv-reports-2000-annual-report.htm

Marketing and distribution 8,746 (2000) 7,813 (1999)
Research and development 3,950 (2000) 3,782 (1999)

Numbers are in millions of Swiss francs.

Clear enough?