Violating A Patent As Moral Choice

kuzmich writes "The Taiwanese government has announced that it will violate patent laws to manufacture a drug that can help fight bird flu virus. In doing so, they have spelled out their reasoning very clearly: 'We have tried our best to negotiate with Roche, it means we have shown our goodwill to Roche and we appreciate their patent. But to protect our people is the utmost important thing'. Not being in Taiwan, this makes me wonder how bad the situation would have to be for some of the other governments to follow a path of violating patent and copyright laws for the benefit of the general population. Are there precedents, procedures for doing so?"

Comments

Not right!

[GFLPraxis]

Patent laws are far more important than human lives; what gives them the right to do this?

Just kidding, of course. Good for Taiwan. Patent laws should not cause the death of people.

Re:Not right!

[connect4]

India has tried, WTO wins again.

http://yaleglobal.yale.edu/display.article?id=5459

Re:Not right!

[aka.Daniel'Z]

AFAIK Brazil ignores patents for AIDS drugs (or ignored in the past - not sure about what is being done now). Refer to Brazil to Ignore Patent on AIDS Drug, Brazil to Ignore Patent on AIDS Drug

Re:Not right!

[mbaciarello]

An editorial in a recent issue of the New England Journal of Medicine, possibly the most authoritative source in the field, pointed out how drug companies spend far more money in marketing than they do in research. Also, drug companies often outsource the pure R&D to little-known laboratories, or buy patents from them, just to re-brand the products. I've been involved in research on levosimendan, created by Finnish Orion Corp., only to be licensed as Simdax® by Abbott Laboratories, Inc.

I figure that when push comes to shove, there's money to be made even from "open source" drugs. The so-called generic drugs, although not as profitable as your typical anti-depressant or branded statin, are a good, perfectly open source market for many companies.

Personally, I do believe in using "force" on private companies when emergencies arise. This might entail paying a forfeitary fee (kinda like compulsory licensing in music.)

Force (of money) is what drug companies use to get (partially connivent) physicians to prescribe one expensive, proprietary drug over a generic one, even if the benefits of the former are unproven.

Force of marketing (as in "ad bombing") is what drug companies use to get unwitting patients to ask their doctors for Plavix®, even though saving one life with Plavix® may cost millions of dollars which could be spent elsewhere more usefully. That is, especially in countries where resources are limited and the health care system is public, that money could save more lives if used for screening programs and promotion of healthy lifestyle, for example.

Sheer force of money is also what gets people to buy Aleve (naproxene sodium) over, well... Naproxen sodium in its cheaper, unbranded, but otherwise perfectly equivalent form!

So be it: fsck them for Greater Good. Granted, a better definition for "Greater Good" would be useful.

Re:Not right!

[rgoldste]

Actually, the U.S. government wouldn't have to invoke eminent domain if they wanted to do something like this. Most of the basic research that leads to these drugs, vaccines, etc. is paid for by the federal government. The gov't then licenses this technology to biotech and pharmaceutical companies to develop a practical application, like a drug. The private company keeps IP rights to the developed drug/vaccine/whatever.

In these licensing agreements, however, is a clause that allows the government, in an emergency, to manufacture the drug/vaccine/whatever, or give a license to another manufacturer to increase supply of the product. So they're not invoking eminent domain to seize IP, they're availing themselves of a contractual provision. Among other things, this means the gov't doesn't have to compensate the IP holder.

See, for example, section 5.04(b) of the Model PHS Patent License Aggreement--Exclusive, available here.

Re:Not right!

[Rik van Riel]

AFAIK Brazil is not ignoring the patents for AIDS drugs. Instead, they have negotiated a deep discount with the patent holder. IIRC this is done using the (WTO?) rule - that patents can be ignored to save human lives in an epidemic - as a really big bargaining chip. Because of this heavy bargaining chip, the AIDS drug manufacturer sells their drugs really cheaply in Brazil. They still get a profit, probably a decent one too because the drugs are affordable enough that they're actually being sold...

I believe that Taiwan is doing the right thing, since the manufacturer of the bird flu drugs did not want to sell them the drugs for a price they were able/willing to pay.

I believe the rules for negotiating price are a bit different when one of the parties can write the law ;)

Re:Not right!

[ozmanjusri]

In the case of Tamiflu, the US may decide to threaten Roche with licensing the drug, so they'd be hypocritical to sanction Taiwan.

In the US, senator Charles Schumer has threatened legislation compulsory to license Tamiflu unless Roche allowed generic producers to boost the number of pills in circulation.

http://observer.guardian.co.uk/business/story/0,69 03,1598469,00.html

Re:Not right!

[LarsG]

So the Taiwanese government won't save its own citizens, and won't pay someone else to save its own citizens, but will gladly steal the results of someone else's work to save its own citizens. Doesn't it seem like Taiwan is behaving badly?

Are you saying that the government of other countries should be denied the same policy choice that the US made in the 1800s?

Re:Not right!

[masklinn]

Take away competetive pressure and companies grow fat and inefficient, just like state-run monopolies.

State monopolies are not about efficiency my good sir, they're about high-quality service and providing said service to everyone, even when it's completely inefficient to provide said service.

State monopolies are about making service available to the most people with the best QoS, they're about reaching 100% or as close as possible, not about reaching the 20% that lead to viable service economically and leaving 80% in the dust because you consider it costs too much to provide them said service.

State monopolies are about long-term vision, 10+ years when not 50+ years, when most private structures' "long term" is barely 5 years.

This is why most european rail service actually work at the moment even if they don't bring in much money, while UK rail service blows and is overpriced.

Now I don't mean that govt/state monopolies shouldn't try to be efficient, it's in fact one of their duties as users of public tax money, they owe it to the whole population of the country (said population more or less being their shareholders), but it's not and should never be their first goals. The first and most important goals of state monopolies should always be quality and reach.

I don't blame them.

[Pantero Blanco]

They have their priorities straight. Stopping a potential pandemic is more important than not stepping on a businessman's toes.

Re:I don't blame them.

[sam_handelman]

This is drug industry propoganda.

  The majority of the expenses associated with new drug discovery are actually made in the public sector - by Universities and so forth. In broad outline the story is very similar to the Internet, also developed at public expense.

  Now, the private sector does contribute significant additional resources to drug development. HOWEVER, these additional resources are a *fraction* of the total increase in drug prices that result from the patents they are awarded (vs. what the same drugs would cost if prices were governed by a free market.)

  The upshot is that if you look at it over the long run, we would be much better off if we violated all the patents, let the patent-dependent drug companies go out of business, and funded an equivalent amount of research in the public sector, making the results available to anyone who wished to sell the resulting drugs on the market.

  The research I'm citing here was done by a fellow named Dean Baker. I'll dig up an exact ref if you like.

Re:I don't blame them.

[sam_handelman]

njyoder - do you have any background in biology or chemistry?
  How were the mechanisms of blood pressure regulation discovered (picking a drug from that list at random)?
  The techniques commonly used to perform high throughput screening of new drugs - who discovered those?
  The synthetic organic chemistry required to actually *make* all these novel compounds? Where do you think that was developed?

  The research in fundamental biology has been absolutely *essential* to the development of modern pharmaceuticals - every bit as vital as DARPAnet was to the creation of the internet.

  Yes, it's true, the public sector does not develop drugs - because when public sector entities get close to developing a drug, they sell their data to a drug company to let the drug company finish the process. However, this is not a law of nature - or even of convenience. It's a massively inefficient mess, with huge amounts of wasted effort and redundant work, driven entirely by the patent system (and the desire by University administrations to secure the profit from those patents.)

  Here are the refs:
(journal articles)
"Patent fiction," Health Letter (Washington, DC): vol. 20, iss. 6, Jun 2004; p. 1.
"A Free market solution to prescription drug crises," Challenge (Armonk, NY): vol. 46, iss. 5, Sep/Oct 2003; pg. 76
"Medicines and the New Economics Environment," Journal of Public Health Policy (South Burlington, VT): vol. 23, iss. 2, 2002; p. 245.

(also a policy paper you should read)
"Bird Flu Fears: Is There a Better Way to Develop Drugs?" Washington, DC: Center for Economic and Policy Research, October 2005
"Bigger Than the Social Security Crisis: Wasteful Spending on Prescription Drugs", Washington, D.C.: Center for Economic and Policy Research, April 2005
"The Benefits to State Governments from the Free Market Drug Act," Washington, D.C.: Center for Economic and Policy Research, November 2004

A Simple Solution

[MinutiaeMan]

It seems to me that in a case such as this, it would be perfectly acceptable to invoke the principle of Eminent Domain. If this isn't a situation that involved the public's interest, I don't know what is!

Re:A Simple Solution

[DoorFrame]

Well, yeah, but with eminent domain you need pay the market value for what your taking. Since there's already a market value for the drug, one which Taiwan refused to pay, you'll need to come up with another justification.

Obligatory Monty Python Quote...

[Daedalus-Ubergeek]

It has also now spread to Europe, with the latest possible case reported in an imported parrot in the UK.

No no he's not dead, he's, he's restin'! Remarkable bird, the Norwegian Blue, isn't it, eh? Beautiful plumage!

Wikipedia sez...

[Mr.Progressive]

Wikipedia sez:

...an interpretive statement, the Doha Declaration, was issued in November 2001, which indicated that TRIPs should not prevent states from dealing with public health crises. Since then PhRMA, the United States and, to a lesser extent, other developed nations, have been working to minimise the effect of the declaration. TRIPs provides for "compulsory licencing", which allows a national government to issue a licence for the production of drugs without the consent of the patent owner as long as those drugs are primarily for the domestic market. A 2003 agreement loosened the domestic market requirement, and allows developing countries to export to other countries where there is a national health problem as long as drugs exported are not part of a commercial or industrial policy [1]. Drugs exported under such a regime may be packaged or colored differently to prevent them from prejudicing markets in the developed world.

Re:Yikes

[smchris]

Roche is Swiss. I'm sure China, mainland or Taiwanese, quakes in fear at the thought of the Swiss navy launching an assault.

"Eminent Domain" for "Intellectual Property"

[Speare]

Personally, I think that governments (including the USA) should be more ready to stake logical claims for the betterment of their populations over the betterment of the "owners" of intellectual property. This includes copyright, trademark, patent, and trade secrets.

Now, the US Constitution guarantees reasonable compensation for seized property. This doesn't have to be cash. It can be some other equitable consideration.

For example, if Disney would surrender almost all of their old television cartoons and theatrical movies into the public domain (where they should have lapsed years ago), the US could reciprocate and give a *permanent* protection for a few of their most prized revenue source characters: Mickey Mouse and Disney's Ariel (the Little Mermaid). The population could make whatever artistic mashup they wanted from the footage, but they couldn't claim the Mouse as theirs or claim the Mouse speaks for them. If I understand, this is somewhat like the protection Britain has given Peter Pan: it's a special cultural treasure and is handled different from other properties.

Another example is for pharmaceuticals: break an effective AIDS drug patent, and we'll let you keep a certain lifestyle drug like Viagra for a longer period.

Unfortunately, Disney and Pfizer have bought enough Senators to choke the Panama Canal, and so the trade in all of their products will be protected nearly forever anyway, even without surrendering the cultural feedstock and the life-saving inventions to society as a whole.