A Healthy Patent Family Is A Tree That Continues to Bear Fruit
“When false policy narratives make it difficult to obtain or enforce patents on the fruits of new branches of innovation, the cycle is interrupted, and progress stagnates.”
When the Senate Judiciary Committee convened on May 21 for a hearing on Competition in the Prescription Drug Market, Senators were besieged with an array of tired and superficial arguments against patents for biopharmaceutical innovation. The main premise seemed to be that holding more than a single patent for a single product must be anti-competitive.
These arguments fly in the face of technological, economic, and legal reality, where patents cover inventions and discoveries rather than products. The ubiquitous mobile phone by one estimate contains 250,000 patented inventions, each adding a unique capability or solving a technical problem, which collectively enable the whole phone to work as intended.
Similarly, biopharmaceutical products are successful only when they can overcome a range of complex biological challenges that stand in the way of delivering a safe and effective dose of the right medicine to precisely the right place in the body, in precisely the right manner, to treat or cure a particular disease in a particular patient. Such biological challenges are not addressed by a single mechanism, and therapies and cures are not developed all at once; they are the result of a process of living innovation that requires ongoing investment underpinned by patents on new discoveries along the way.
The Patent Ecosystem
A forest provides an apt metaphor for the workings of the biopharmaceutical innovation ecosystem. The canopy of a healthy forest ecosystem seen from above looks like an impenetrable thicket of green. A ground level view provides a starkly different perspective, where diverse plant and animal life coexists. Above the ground but beneath the canopy, tree trunks branch and branch again, drawing sustenance from the ground below, reaching for the sunlight that catalyzes life, and providing the trees a place in which to bear fruit and seed the next generation of abundance.
Where patent rights are sufficiently available and reliable they provide a basis for investment in the long-term, high-risk, resource-intensive work of curing disease. Just as a tree’s capillaries enable sunlight to draw water and nutrients through its entire system, patent rights to novel discoveries and inventions provide conduits for the investment that catalyzes diffusion of knowledge and transfer of technology throughout the innovation lifecycle. Just as trees need repeated exposure to sunlight, biopharmaceutical innovations require round after round of sustained investment.
A forest’s health is contingent on symbiotic interactions among numerous plants and animals. The biopharmaceutical innovation ecosystem, too, connects a wide universe of stakeholders, including federal laboratories, research universities, startups and corporations, venture capitalists and financial markets, regulators, hospitals, doctors, and patients. Collaborations thrive and funding and know-how move seamlessly among these stakeholders when patents ensure the rights of diverse parties are secure, transparent and reliably enforced in a rule of law environment.
In this ecosystem, new chemical, molecular, or biological entities—the core of a medicine—are patented as compositions of matter. These patents form the main trunks of patent families that will branch and branch again as researchers perform the arduous work of engineering practical applications for promising early-stage scientific discoveries.
The applications of these discoveries often extend across diverse therapeutic areas and delve into variations on the manufacturing, formulation, dosage, modes of delivery, timing, and tolerability of the medicine. Each foray in a new direction requires dedicated outlays of time and money to pioneer solutions, as well as to demonstrate the safety and efficacy of those solutions through expensive clinical trials and other regulatory approval processes.
The patentability of these living innovations enables continued investment, even after the composition of matter patent expires, which in turn permits further research and clinical trials to continue and make treatments increasingly effective over time for a broader range of patients.
False Narratives Disrupt a Healthy Innovation System
When this ecosystem is healthy and high functioning, it promotes a virtuous cycle of new research, knowledge advancement, technology transfer, and re-investment that doesn’t stop at the basic composition of matter. However, when false policy narratives make it difficult to obtain or enforce patents on the fruits of new branches of innovation, the cycle is interrupted, and progress stagnates.
One of those false narratives regards drug prices. As Senator Cory Booker (D-NJ) noted at the hearing, 50% of all Americans and 80% of seniors rely on at least one prescription medicine for their health. Although medicines are the principal means by which most Americans receive therapeutic care, they account for only 12% to 14%of overall healthcare costs and actually reduce the need for more expensive methods of healthcare intervention, as well as the long-term costs of illness.
The share of medicines in overall healthcare costs is kept down in part because 90% of the American supply of medicine is filled by lower-cost generic versions of off-patent drugs, facilitated by the statutory and successful patent-to-generic transition that was mandated by Congress through the Hatch-Waxman Act. The 10% of prescription medicines that remain under patent, and whose prices must cover the costly research and development and clinical trials that advance state of the art care, provide patients with benefits previously unavailable at any price.
Pointing to life-saving products like inhalers and insulin, some hearing witnesses claimed that advances secured in recent years were unworthy of patent protection. These witnesses over-simplify, devalue, and dismiss as “obvious,” the difficulty and significance of securing improvements to the methods and mechanics of biopharmaceutical manufacturing, formulation, dosage, and delivery. In the case of inhalers, one witness repeatedly suggested there had not been meaningful improvements “since 1956.” Yet a doctor treating COPD, diabetes, or many other ailments could be liable for malpractice—and likely criminal prosecution—if they prescribed the standards of care today that were in use in 1956.
Don’t Leave the Patent Forest Bare
Coming from the fatally flawed mindset that anything expensive must be overpriced, biopharmaceutical innovation is under attack on many fronts, from drug price controls to government “march-in rights,” foreign reference pricing, global IP waivers and forced technology transfers. Most perversely of all, in the case of patents, biopharmaceutical innovators are being penalized for following the very rules that were set by Congress and federal agency regulators.
Punitive legislative proposals that stigmatize living innovation as product “hopping” or patent “thickets,” along with administrative measures to limit the applicability of patents to improvements on existing products, thoroughly misrepresent the role of patents in innovation and threaten the unparalleled productivity of the U.S. biopharmaceutical ecosystem.
Without patents on living innovation, what’s left of the biopharmaceutical ecosystem is a forest of stunted trees that are no longer able to bear fruit.
Image Source: Deposit Photos
Author: astrid208
Image ID: 255165526
