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Nobel Laureate Attacks Medical Intellectual Property
An anonymous reader writes "Nobel prize-winning economist Joseph Stiglitz, who was fired by the World Bank blasted drug patents in an editorial in the British Medical Journal titled 'Scrooge and intellectual property rights.' 'Knowledge is like a candle, when one candle lights another it does not diminish its light.' In medicine, patents cost lives. The US patent for turmeric didn't stimulate research, and restricted access by the Indian poor who actually discovered it hundreds of years ago. 'These rights were intended to reduce access to generic medicines and they succeeded.' Billions of people, who live on $2-3 a day, could no longer afford the drugs they needed. Drug companies spend more on advertising and marketing than on research. A few scientists beat the human genome project and patented breast cancer genes; so now the cost of testing women for breast cancer is 'enormous.'"
The real question is what would be a better way to reward inventors than intellectual property arrangements. IP doesn't reward creation of an invention-but its restriction. It is clear that major corporate interests have abuse IP protection in various ways. The problem is that an alternative system isn't exactly obvious. The economist Henry George proposed replacing the system of patents and copyrights with a system of prize awards over 100 years ago. However, determining what inventions should be rewarded is still going to be difficult.
1. If a researcher looses a monopoly on one patent, but in turn gains access to 10 million other patents - then that is a net gain for invention and for business, not a net loss. The facts bear that out. For example, how most the new drug innovation was happening in India where they don't have patents on drugs, or the less proprietary x86 architecture that took the market by storm in spite of it's design flaws.
2. Patents do not change the demand for invention and R&D, they only distort the market and cause it to center around invention controls instead of invention related services. Well, large companies, lawyers, and government are good at controlling things. Inventors are good at inventing things, so patents do really not help inventors or small lean innovators.
3. To control inventions requires physical coercion and violence, and patents are very violent. Like how they arguably held back safety devices in cars for 20 years while millions died needlessly, and like how attempts of patent enforcement in Africa have likely led to over a million unneeded AIDS related deaths. Also, DDT was banned within months of its patent running out, freon too, to make room for bigger markets. But at least the freon one can't be attributed to 50 million malaria deaths.
4. In the future, technology is likely to bring production back into the home thru 3d printers and nanotechnology. IMHO, patents will require more violence and more government micro-regulation than ever in order to be secured.
5. A side effect of the patent system is that researchers who share research and innovation between companies are punished. It creates a strong disincentive against collaboration. It forces innovators to spend orders of magnitude more on R&D and causes them and their research to be micromanaged. So patents drive up the cost of R&D by orders of magnitude, drive down quality, and then now they say "well, we need patent monopolies to recover all these costs".
6. People tend to think that having all these incompatible parts and all these incompatible interfaces on every single car, cell phone, and consumer product - is just a normal part of a free market economy. I speculate that it is not, and that patents encourage these distortions in addition to all the waste and unneeded obsolescence that goes with it.
7. People tend to think that having expensive pharmaceuticals with all sorts of strange chemical side effects is just a normal part of a free market economy. In addition they think that the shunning natural cures, herbs, and vitamins is a normal function of modern medicine and science. I speculate that it also is not, but another distortion caused by patents.
8. Patents are not property anymore than slaves on the plantation are. Just cause someone calls something a property doesn't mean that it is.
In sum, patents don't help inventors, but distort markets to work against them and even punish and isolate them. They are violent, genocidal, coercive, unproductive, inefficient, and drive down profit, quality, and compatibility across markets everywhere. The future for patents does not look promising, but rather to be one of millions of US elderly suffering from high costs and strange chemichal side effects on their medication, and one of a military police state required to enforce them as things like 3d printing and nanotechnology force the commoditization of invention.
You'll never see a patent claim written for "an anomaly." No one wants to patent a gene that causes a disease - regardless of whether the anomaly is naturally or artificially induced.
What you will see are patent claims for new inventions that rely on the discovery of such an anomaly and its effects. Depending on what the anomaly does and how you want to treat it, here are some sample claims for such inventions:
Similarly, no one can patent "turmeric." Last I checked, "turmeric" isn't novel, as any Durkee's spice catalog from the 1960's or so will indicate. But a company might discover that turmeric has a previously unknown therapeutic property, and may patent the use of turmeric for that purpose.
Sorry, folks - the patent system is rarely as insane as extremists make it out to be.
- David Stein
Ask Monsanto. They have patents on over 11,000 crops, only about 10% of which are genetically modified. The rest are natural varieties, just as God / Nature created them.
Of course, that could be because everyone that had anything to do with that aspect of the government at that time was a former Monsanto or former Monsanto subsidiary executive (for instance, John Asscroft, former Attorney General).
When you "own" the government, in time you own everything else, too.
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Unfortunately it's pretty difficult to argue for patent reform right now. Because of technology and drugs, life expectancy has never been higher. If any changes are going to be made, congress will have to make those changes. And the drug companies are likely to argue the reason there have ever been so many life-saving drugs is because the patent system works. And congress is not likely to 'fix' something it doesn't perceive as majorly 'broken'.
Throw into the mix all the money the drug companies have given to politicians to help maintain the status quo and you begin to see how difficult it is to make changes.
I was in this industry for 25 years and my father for 25 years before me. I practised in Southern Africa during this period and was an elected representative on the national body of the Pharmaceutical Society of South Africa (PSSA). I can speak on the subject with some authority because I know the background of what it is like for 3rd World economies. Pharmaceutical Companies (PC's) apply differential pricing depending on where they are operating. eg identical medicines are 14% more expensive in the USA than they are in Europe. The major PC's are all in the top 20% of the top 100 listings on the stock exchanges of the world. They give returns of twice as much as their comparative listed companies. Most provide annual returns of over 20% compared to their non-pharmaceutical rivals 10%. An example of the type of tactics they use their patents for could be seen a few years ago in South Africa. The South African pharmaceutical market is divided into 2 categories - State and private sector. The state buys all their medicine on tender. In order to obtain tenders the companies supply at stupid prices and then load the loss on the private sector. Examples shown indicated that some medicines were 1000% more expensive than the tender price. This process led to enormous pressure in the private sector. Over a period of 20 years (1980 - 2000) the component of medicine spend in the total health spend rose from 15% to 34%. The PSSA advocated the importation of pharmaceuticals from the EU or India where they some 30% and 100% cheaper respectively. The Dept of Health formalised this in amendments to the regulations in 2000. They even inspected factories in India and licenced them for supply to South Africa. The Pharmaceutical Industry immediately drew the attention of the Government to their patent rights. The US State Dept was called in to assist. I was a speaker on a panel discussing this legislation in 1998 and seated next to me was this representative from the US Embassy. The threat was made at this discussion that should this legislation be invoked South Afica would be transgressing International Patent Law and the US government would advocate their exclusion from international trade rights. The PC's do not provide anything to their host countries except employment. They utilise a system of transfer pricing for their production. How this works is that the local company calculates the production volumes of a given medicine and the local cost of production. Their parent company then calculates the profit they wish to make and this then becomes the retail price. The local company is then sold the production materials from the parent company. The invoice value is the retail price less the production cost. This in real terms that that they are effectively making no profit in the country of production and therefore pay no tax. This is technically illegal in most countries but is almost impossible to provce since they hold the patent rights on the product and no one can prove the real cost of the product. The last point is that there is very little original research going on currently. Most "new" medicines are computer modelled clones of existing molecules. Research is going on in many State funded institutions and the PC's often buy the intellectual rights or are involved in providing some funding of this research. The issue of the relationship between what they spend R&D and marketing is raised because whenever they are questioned about the high prices they are charging they always point to how much they have to spend on R&D. The other interesting facet about their pricing is how much they charge for "cosmetic" medicine eg treatments for acne or fertility agents. This is a wicked industry and they have great plans and will strangle health care globally.