Gene Patenting: What Did the Supreme Court Rule in Myriad?

I forget what I was doing back in the late spring when the US Supreme Court issued a couple of major rulings on issues of interest to this blog. I did not have time just then to post about these rulings but made a mental note to get back to them as soon as possible. Right…Anyway, last week’s New England Journal of Medicine has forced my hand (main article for subscribers only).

In Association for Molecular Pathology v. Myriad Genetics, Myriad’s claim to have patented the gene sequence for the BRCA1 and BRCA2 cancer-causing locations, and hence their exclusive right to offer a genetic test for those conditions, was at issue. The article mentions one major downside of one company having this exclusive right to a genetic test—its price. Myriad charges about $4000 and one competitor firm is promising to market a test for $1200. The article omitted to mention an issue that is even more serious regarding medical science and practice. Myriad has been able to sequester data on the effectiveness of its genetic tests as proprietary information. That means any physician counseling a patient on whether or not to be tested, and what a test means, is dependent on the company profiting from the test to say how well its own test works, and that is rather obviously a bad situation.

Lower courts had thrown out first all, then only some of the Myriad patents. The Supreme Court basically split the difference. Some patents involved the actual DNA that makes up the genes. The court said that exists in nature and you cannot patent that. But some patents involve complementary DNA which the company manufactures off messenger RNA that is taken from those genes. That cDNA does not exist in nature, so the court said the company could patent that. (Plaintiffs had alleged that cDNA is really the same as native DNA because what matters is the information in it, not its physical form, and that is the same as the native DNA; the court did not buy that argument.)

Patient advocates such as the ACLU trumpeted the decision as a big win because it does now open the door to competing gene tests. Let’s take a step back, akin to the discussion of patents in HOOKED, and see what basic issues are involved.

First let’s do Patent Law for Dummies. The noise made these days by corporate apologists about “intellectual property rights” obscures the basic fact that a patent is a monopoly. The government is supposed to break up monopolies, not create them. So the whole idea behind patents is that it’s a tradeoff. The government grants temporary monopoly rights. In exchange it’s supposed to get useful innovation that’s in the public good. No patents, no firms willing to invest their cash in bringing new inventions to market, no innovation to benefit the public. Too many or too burdensome patents, prices go way up, public interest is harmed, and in extreme cases (like arguably today’s biotech sector), innovation is actually squelched.

The law says that patents should be granted only if some basic conditions are met. The Supreme Court in Myriad issued a very narrow ruling. It decided one issue only—whether naturally occurring things can be subject to patents—and decided “no,” in keeping with many earlier rulings. The Court refused to review the Myriad patents on other grounds, such as whether they met the conditions of being novel, useful, and non-obvious. Those other grounds are important to most patents relating to Pharma. The argument against the present patent system for drugs is that firms are allowed to patent all different aspects of a drug, even those that are non-useful and obvious. This simply puts barriers in the way of generic competition, and does nothing to spur innovation.

(As I argued in HOOKED, following Marcia Angell, the Patent Office could squelch these nuisance patents without any need for a court ruling, simply by enforcing its own rules. Alternatively, the FDA could refuse to list any such nuisance patents in its reference book that states the conditions for drug approval and generic equivalence. But both Federal bodies are more interested in cozying up to industry, apparently.)

The authors of the NEJM paper provided a bit of good news in that regard—they report that in recent years the Patent Office had issued many fewer patents for naturally occurring gene sequences because they had tightened up their criteria and insisted that biotech companies could not simply patent genes wholesale, they had to make a plausible case that they knew how to do something useful with the discovery. (Presumably the Myriad decision will raise the bar still higher by ruling out all such patents anyway.)

As a bonus, the New England Journal threw in two historical essays:

http://www.nejm.org/doi/full/10.1056/NEJMp1306755

http://www.nejm.org/doi/full/10.1056/NEJMp1306553

These address events leading up to the passage of the Bayh-Dole Act of 1980, that opened the floodgates to universities patenting all manner of scientific discoveries, including those paid for with federal research dollars. They make a case for not regarding Bayh-Dole as carved in stone, but as needing review and updating as conditions have changed so much since its creation.

 

Kesselheim AS, Cook-Degan RM, Winickoff DE, Mello MM. Gene patenting—the Supreme Court finally speaks. New England Journal of Medicine 369:869-874, Aug. 29, 2013.

Patents: A Helpful Analysis

The current issue of the Hastings Center Report contains a 36-page supplement, "Patents, Biomedical Research, and Treatments: Examining Concerns, Canvassing Solutions," by Josephine Johnston and Angela A. Wasunna. The report provides an extensive review of the current status of patents and licenses in pharmaceutical marketing, with special focus on problems in the developing world, with an especially complete catalogue of possible reform measures.

The report nicely supplements the discussion of patents in HOOKED, and confirms the position that patents are tools of public policy, not basic rights (as the oft-used phrase, "intellectual property rights," is intended to convey). If patents produce consequences that run contrary to good public policy, as often occurs in pharmaceuticals, then we need additional measures of some sort to mitigate those bad consequences. High on the list are questions of whether people in developing countries will be able to afford medications needed for life and health; and whether in the future, pharmaceutical firms will discover desperately needed new medicines for afflictions prevalent in poorer nations.

Johnston J, Wasunna AA. Patents, biomedical research, and treatments: examining concerns, canvassing solutions. Hastings Center Report 37(1):S1-S36, 2007; http://www.thehastingscenter.org/patents-biomedical-research-treatment.asp

Econ 101 and Drug Patents

I know that all of you out there keep a copy of HOOKED at your bedside and read a chapter each night before retiring. But in case you've not yet committed the volume to memory, I can take the opportunity of these news items to do a bit of review of a basic concept:
http://keionline.org/node/1147
http://www.guardian.co.uk/commentisfree/cifamerica/2011/may/31/healthcare-pharmaceuticals-industry

The latter article, from The Guardian, is a commentary by economist Dean Baker (whom I quote in HOOKED) on legislation proposed by Sen. Bernie Sanders (I-VT), which is summarized in the first link.

Here's how Baker starts off his commentary: "Drugs are cheap. There are few drugs that would sell for more than $5-$10 a prescription in a free market. However, many drugs in the United States sell for hundreds of dollars per prescription and, sometimes, several thousand dollars per prescription. There is a simple reason for this fact: government-granted patent monopolies."

Now, this comment may strike you as strange, especially if you were to check out the Pharmaceutical Research and Manufacturers of America website (http://www.phrma.org/about/phrma) There you will find the following statement of the drug industry's core values:

PhRMA's mission is to conduct effective advocacy for public policies that encourage discovery of important new medicines for patients by pharmaceutical and biotechnology research companies. To accomplish this mission, PhRMA is dedicated to achieving these goals in Washington, the states and the world:
• Broad patient access to safe and effective medicines through a free market, without price controls;
• Strong intellectual property incentives;
• And transparent, efficient regulation and a free flow of information to patients.

In case you don't know what "intellectual property" is, read "patents." So how can it be that an economist explains that in a free market, drugs would be really cheap, and the reason they cost so much is because of patents that amount to government monopolies (which are of course a violation of the free market); yet PhRMA insists it is for the free market (and against price controls), yet also for patents?

I mentioned in passing (http://brodyhooked.blogspot.com/2011/07/kid-gloves-on-corporate-crime-different.html) that I hope soon to be able to announce the availability of a new book on the subject of economism. Economism, briefly, is the worship of the "free market" as an item of religious faith, though it disguises its religious nature by posing as hard-headed science. Economism, I hope to show, is shot through with internal contradictions and inconsistencies, explaining why its believers have to be faith-based, because neither facts nor logic would support it. PhRMA's two claims of being pro-free-market and pro-patent is just one tiny example of the sorts of contradictions that economism generates--yet at the same time obscures, so that most US politicians and policymakers repeat this nonsense without realizing that it's nonsense.

Baker goes on to explain that a patent is a government-granted monopoly based on a hunch that the extra cost to the public, forced to pay monopoly prices for goods until the patent expires, is a good trade, because the patent forms an incentive to innovate and invent which in turn is a public benefit. This hunch could be well or poorly grounded. Baker argues that right now, we are paying a lot more for drugs through patent monopolies than we are getting benefits from real innovation. If you don't think this is true, you have not been following this blog.

Enter Sen. Sanders. There are wo possible solutions to the mismatch between drug patents and real public benefit. One would be a strictly regulatory approach--change the rules regarding granting patents for new drugs. Demand more evidence of real benefit before granting a patent, or shorten the period of patent protection, or some such. The other approach, which is what Sanders actually has proposed, is a quasi-market approach, using financial incentives rather than regulation. The idea is to impose a tax on both public and private health insurers. The money from the tax would create a prize fund. The prize fund would be used to buy up patents for really useful drugs, as opposed to "me too" drugs. These useful drugs would quickly become generic drugs and would be available cheap.

This, say both Sanders and Baker, would be a win-win. The insurers would more than save in lower drug costs what they paid in the new tax. Drug companies would then have a powerful incentive to discover really useful new drugs, because then they could easily sell the patent for a tidy profit. Baker is perhaps overly sanguine in imagining that in this new system, drug companies would gain no benefit from deceptive marketing of marginally useful or harmful drugs, so they'd simply quit doing that.

Since true believers in economism hate government programs and hate new taxes, and probably hate Bernie Sanders, you can bet there will be little support in those quarters for this proposal. But thanks to Dean Baker for again revealing the hypocrisy of the drug industry's wrapping itself in the "free market" mantle.

ADDENDUM 8/6: A reader much more alert than I was when I wrote this post last night informed me that I had inserted the word "patient" when I obviously meant "patent." This has been corrected above.

What To Do about Pay-for-Delay

Dr. Aaron Kesselheim and colleagues provide a useful review/commentary in last week's New England Journal (subscription required) on a problem I addressed in HOOKED--"pay-for-delay" when a brand name drug company and a generic company reach a settlement on the latter's patent challenge to the former, which results in a substantial delay in a cheaper generic drug reaching the market.

In quick summary, here's what happens in a typical case:

• A lucrative brand name drug is about to go off patent. Typically, however, the company has a number of subsidiary patents on things like coating, etc. that have little to do with the actual active drug ingredient.


• A generic company bids to come onto the market with the drug--by the Hatch-Waxman Act, the first company to do so gets a plum in the form of 6-month generic exclusivity, during which it can charge almost as much as the brand name price due to lack of competition from other generic makers.


• The brand name company sues the generic company for patent infringement, often citing one or more of the subsidiary patents.


• A major and potentiallly protracted court battle ensues.


• The brand name company offers the generic a cash settlement, in effect paying them to drop their suit and take the cash, on the condition that they delay their product's marketing and preserve the brand name exclusivity for a longer period.

It seems at first that this process hardly serves the public interest. But the authors note that a prolonged court battle could just as easily keep the cheaper generics off the market even longer.

Kesselheim and colleagues make a number of good legal points and discuss some statutory fixes, most of which have little chance of passing the present Congress. But I think their most important argument is about the root cause of all this--silly patents. They propose two measures that could occur either at the Patent Office or at the FDA levels that would allow administrative challenges to minor patents that do not protect truly innovative drug development, leaving the courts free to decide the really tough cases, and industry free to patent and profit from real innovations. These reforms in my view should be the highest priority.

Kesselheim AS, Murtagh L, Mello MM. "Pay for delay" settlements of disputes over pharmaceutical patents. New England Journal of Medicine 365:1439-1445, Oct. 13, 2011.

Supremes Look at Biotech Patents

The Minneapolis Star-Tribune reports:
http://www.startribune.com/business/135202333.html
--that the U.S. Supreme Court heard arguments yesterday in a patent dispute between Mayo Clinic and a firm called Prometheus Laboratories. The case has implications for potentially reining in the overly broad patents now being issued for biological and medical discoveries, especially related to the genome.

The article is unfortunately not very specific about the diagnostic tests that are at the root of the patent dispute. We learn from another press source--
http://www.twincities.com/health/ci_19493210?source=rss
--that the test involves correcting the dose of thiopurine administered for various autoimmune disorders, especially in the gastrointestinal tract. Mayo previously used the Prometheus test to find out how much thiopurine stayed in each patient's bloodstream, until its own scientists came up with what they say is a better test, and then Prometheus sued Mayo to prevent their test from reaching the market. The lower court ruled for Mayo, a higher court reversed, and now the case is before the Supremes.

Mayo's case, which is backed by the Feds, is that the Prometheus patent is too broad, and would patent the idea of doing the sort of test Mayo has actually developed, even though Prometheus never invented that specific test. As I wrote in HOOKED, the patent system, which is an interference with the free market designed to trade off monopoly privileges for promoting innovation, is actually today squelching innovation because the patent office is willing to patent most anything, whether it has been actually taken to a realistic stage of development or not. The Supreme Court was told in argument that if they found for Prometheus, they would basically be saying that a manufacturer of a bad product could use the patent system to prevent a competitor from marketing a better product--hardly the sort of promotion of innovation the patent system as designed for.

I previously blogged about patents: http://brodyhooked.blogspot.com/search?q=patents
--in relation to pay-for-delay to prevent generic drugs from cutting into brand-name profits. Anything the Supremes might do to reduce overly broad patents, and to stop industry from "patenting the sun" in Jonas Salk's famous phrase, would be welcome.

Doing Patents the Indian Way

Last week’s New England Journal of Medicine features a “perspectives” by Amy Kapcynski of Yale Law School:
http://www.nejm.org/doi/full/10.1056/NEJMp1304400

Prof. Kapcynski reports on a ruling by the Supreme Court of India last April that effectively upholds that nation’s Patent Act, against a challenge to a patent ruling by the drug giant Novartis.

Folks in poorer nations have a strong interest in promoting locally made generic drugs and limiting the ability of international firms to extend the patent life of their expensive brand-name drugs. With these concerns in mind, Section 3(d) of the Indian Patent Act was designed to forbid patents of the sort that lead to the most extreme cases of “evergreening” in the U.S. Pharma world (as described in HOOKED). It forbids a company getting a patent on a new, minor chemical variant of a known drug, such as a salt or isomer, unless it has shown that the new form offers a significant advantage in efficacy.

Novartis tried to extend its patent on the cancer drug Gleevec by claiming a patent on the beta-crystalline form of the drug’s active ingredient. The Supreme Court cried foul.

Prof. Kapcynski says that the Indian law and the Court’s ruling have two virtues. First, they keep prices lower for the developing world. But they also do the opposite of what Novartis immediately claimed when the adverse ruling came down—that the Indian law was stifling innovation by reducing the financial rewards to big companies. Prof. Kapcynski argues that the law rather promotes the right sort of innovation. It turns companies’ attention away from silly me-too drugs and forces them actually to innovate—to discover new drugs that work better than existing drugs.

That’s the business and public health end of the equation. What about the legal end? The basic idea behind patent law, those non-lawyers among us are told when we try to study the issue, is that important criteria for deciding whether to issue a patent are novelty and non-obviousness. Now, patenting a minor chemical tweak in an existing drug sounds like a poster child for “obvious” and “not novel.” So why has the U.S. patent office acted like such a wuss and granted patents to drug companies wholesale for these “new” drugs?

Prof. Kapcynski makes the claim that it’s not merely the case that the Indian patent law should be allowed to stand—but that it would be a great model for other countries to emulate. How about the USA?

Greenberg, Science for Sale: A Belated Book Review

Daniel S. Greenberg, Science for Sale: The Perils, Rewards, and Delusions of Campus Capitalism. Chicago: University of Chicago Press, 2007.

Somehow this book escaped my attention when it was first published and I noticed it only lately. Of the books I relied on when I was researching HOOKED, its closest analog is Sheldon Krimsky's Science in the Private Interest.

Greenberg, an experienced journalist covering science and policy matters, begins by offering us two "grand narratives" to chew over:

1. Since the Bayh-Dole Act of 1980 opened up academic research to patents, licenses, and royalties, we have arrived in a promised land of win-win. The campus benefits from income from its scientific discoveries, and the new entrepreneurial spirit that now pervades campus science assures that a steady stream of new discoveries will improve the lives of all.
2. Bayh-Dole began a race to the bottom in which commercial behavior and values have steadily eaten away at the fabric of scientific integrity. We no longer have science for the sake of truth and the public good; we have science for the sake of the dollar, leading to widespread fraud and the manipulation of data for marketing purposes.

Greenberg then apparently decides that he can keep the reader most interested by maintaining the tension between these two accounts and not showing his hand too early as to which account he believes. This might have worked, but unfortunately, Greenberg, for all of his journalistic credentials, is in my humble opinion not that great a writer. I found most of his chapters hard to follow; ideas followed each other without much of a sense of the logic of the progression. His tacking back and forth between the two grand narratives thus led to more confusion than enlightenment.

Having presented to us his (two-sided) review of the broad scene of academic science today, Greenberg then focuses on interviews with individuals in different places within the academic science establishment, devoting a chapter to each interview. These I found generally to be tedious because Greenberg seems to feel the need to include every word with hardly any editing. The exception was an excellent interview with Drummond Rennie, which I found compelling mainly because Rennie has been such an important figure in the debate over pharmaceuticals and medical journals.

In the end, when Greenberg finally has to come clean on what he thinks, he adopts a position not much different from what I have been advocating in this blog. On the one hand he resists the Chicken Little view that science's sky is falling. Most scientists still do very good, honest science. Most universities have not auctioned off their departments to commercial companies. Commercial sponsorship still accounts for a very small percentage of on-campus research. Bahy-Dole is not going away and we might as well figure out how to live with it.

On the other hand, Greenberg finds credible most of the concerns raised by the negative impact of commercialization on the world of science, and agrees that steps must be taken to ward off the dangers. He is reasonably skeptical when the foxes try to write the new ethical code for the henhouse. He is alert to the dangers that patents have become a barrier rather than a facilitator to future discovery.

One theme that I addressed very briefly in HOOKED, that Greenberg picks up on, is the power shame. Suppose that we were to tell a university scientist, "We can tell you your future with confidence, if you continue your present behavior of pursuing lucrative research grants, consulting contracts, and speakers' fees with commercial industry. We can guarantee that your scientific work will continue to go well in the lab, and also that you'll increasingly live a life of material pleasure and plenty. There will be only one penalty that you'll have to pay. Whenever you encounter one of your fellow scientists, you'll feel as if you wish you had a paper bag over your head." Greenberg argues that a substantial number, perhaps the vast majority, of scientists would foreswear commercial relationships if they could be told this and believe it. Being ashamed in the face of your fellow scientists is, he asserts, a very powerful force for maintaining scientific integrity, one that ought perhaps to be exploited more by those seeking reform.

Appeals Court Looks Askance at Pay-for-Delay

Edward Wyatt in the New York Times--
http://www.nytimes.com/2012/07/27/health/policy/drug-makers-deals-with-generic-rivals-may-face-justices-review.html
--reports on a ruling of the U.S. Third Circuit Court of Appeals that brand-name drug companies paying generic companies to delay the entry of generic drugs into the market is anti-competitive. This ruling runs contrary to rulings by other courts that support these payments and makes it more likely that the U.S. Supreme Court will have to take up the issue.

Wyatt adds that a bill now stuck in the Senate to end these pay-for-delay arrangements has been estimated by the Congressional Budget Office to promise $4.8B in savings over a decade for the Federal government, and overall drug savings of $11B.

The industry point of view--which, for a change, both the brand-name and generic drug companies agree on-- is that pay-for-delay is good business and good for the consumer because it actually speeds the entries of generic drugs into the market. How so? The usual stimulus for such an agreement is a patent dispute between the two companies. The companies have two options--make a deal; or fight a lengthy court battle to resolve the patent dispute. It's more efficient and ultimately cheaper for all parties, they say, so go the out-of-court-settlement route.

As I explained in HOOKED, there might be some merit in this argument if the patent dispute were truly a serious matter. The problem is, that it usually is far from that. The U.S. Patent Office, and the FDA oversight of drug patents, have gotten so loosy-goosey over the whole business that a brand-name firm can patent all sorts of trivial features of the pill, including famously its color, and then drag out a court battle with the generic company for years. The ultimate solution to this problem is to do away not only with pay-for-delay, but also with senseless, trivial patents, and for judges to simply throw out all such lawsuits.

Drug Discovery: Some Imcompetent Reflections

The Feds have now made it official: The pharmaceutical industry doesn't know how to discover useful new drugs.

As reported by Gardiner Harris in the New York Times:
http://www.nytimes.com/2011/01/23/health/policy/23drug.html
--the government has run out of patience with the slow pace of drug discovery and plans to invest $1B in a new National Center for Advancing Translational Sciences within the NIH, specifically to do some of the drug development that private industry once did but, apparently, no longer does.

Now, I am not a research scientist, nor do I play one on TV, and I have no idea how to discover new drugs. Despite my near-total incompetence on these matters I will offer some reflections, many of which were previously offered in HOOKED or in previous blog entries.

First, what is wrong with the current state of industry drug discovery? This has a two-part answer--new drugs are quite hard to discover these days, and Pharma has essentially gotten itself out of the drug discovery business.

The big reason drugs are hard to discover is what I've previously quoted economist Uwe Reinhardt about, the paucity of low-hanging fruit. Once we have a basic understanding of what causes various common diseases, we can figure out what sorts of molecules might make useful drugs to treat them, but after a while, we have discovered most of the easy-to-find molecules that produce drugs that are both safe and effective. The as-yet-undiscovered molecules are fewer in number and much harder to find, or else more likely to cause adverse reactions while being no better than existing drugs. Until such time as we advance our basic understanding of disease, we can expect a lull in the pace of discovery. It seems as if we're more or less in one of those lulls just now. (If you think about all the things a molecule has to do inside of and in interaction with the human body to become a safe and effective drug, it's a miracle there are any useful drugs at all.)

Now, even given that good new drugs are hard to find, it remains the fact that Pharma seems ill-equipped just now to find them anyway. There are three main reasons for this so far as I can figure.

• The drug industry has been into me-too drugs in a big way. Rather than go after a whole new class of drugs, it's much simpler and safer to tweak an existing molecule slightly and then try to market the result as the "new purple pill" or whatever. (The wimps at the Patent Office enable this by granting patents in apparent disregard for the criterion of non-obviousness, which is one of the standard legal requirements for patents. I am reasonably sure that if I could afford to hire the right attorneys, I could take out a patent on the period at the end of this sentence.)
• The industry has outsourced all risk to biotech start-ups. These biotech companies are often based on new and even wacky ideas. At least 9 out of 10 will go bust. The big drug companies can wait around and then buy out the occasional, rare biotech company whose idea actually pans out and looks like it could turn into a drug.
• The third reason is actually at the root of the first two as well. The companies have put their bean counters almost totally in charge of the research agenda. If a line of research seems like it's not going to turn into a billion bucks in sales by next week, they axe it--even if, pursued for a couple more years, it could have produced sterling results.

OK, so now maybe we understand why then industry has for a good decade or more suffered from a near-empty R&D pipeline. Then next question we might ask is whether the Feds can do any better. The news report is not that promising. The new National Center, we are told, will do things like use robotic screeners to turn over a large number of candidate molecules. This sounds like the current industry business model. (I always had a lingering suspicion that scientific discovery ought not be delegated to robots.)

Clearly the new Center is supposed to be a part of the love affair that the NIH has declared with the idea of "translational science." Depending on who's talking, you can get very different ideas about what "translational science" is. On the positive side, translational science seems to mean having scientists in different fields form interdisciplinary teams, communicate with each other, and exchange ideas throughout the course of research. If you try to implement this model, you find that it's hard to do because the average scientist was simply not trained in this way. That in turn suggests the need to train future scientists more in the translational setting from the get-go. All that, I suggest, is for the good, though unlikely to produce quick results.

On the negative side, sometimes it sounds as if what "translational science" means (in terms of moving research findings more quickly "from the bench to the bedside") is "let's do what they do in private industry" or "let's do what will make us the most money soonest." If the industry R&D model is a bust, then why the heck model our science after it?

To my poor ignorant mind, it seems that ultimately, we'll discover new, useful drugs to the extent that we invest in more basic science research and learn more about the mechanisms of disease. That's not sexy, and it certainly cannot be preprogrammed to suit Wall Street's quarterly earning reports. But it seems to explain, for instance, why we seem poised for real advances in cancer drugs in the next decade or so, because we now know a lot more about tumor cell genetics and enzymology. Does this mean that we won't occasionally get lucky and discover good drugs purely by serendipity? Of course that can happen; what about aspirin and penicillin? But we probably can't count on that as our best and sole approach.

Prominent Cancer Scientist: Stop Evergreening

HOOKED describes how drug companies commonly engage in "evergreening"--finding ways to renew or extend the patent on a profitable drug that is about to go off-patent and become available generically at a much lower price. Sometimes this involves the belated "discovery" of a "new" drug that is supposedly superior to the old one when in fact the new drug is only a minor chemical variant of the old molecule (such as the substitution of Nexium for Prilosec). In other instances the action is in the courtrooms rather than the lab, when companies simply file nuisance lawsuits against all the generic makers for patent infringement, hoping simply to delay the generics' entry into the market.

Joining the voices condemning evergreening and related patent shenanigans is Brian Druker, the scientist (at Oregon Health and Science University) generally given the major credit for the discovery of the cancer drug, Gleevic (or Glivic outside the U.S.), which ushered in a new generation of less-toxic "designer" anti-cancer drugs.

Druker reviews the history of the development of Gleevic, noting that it involved an extended collaboration between academic and industry scientists. He recalls also how the drug developers had to overcome continued skepticism about the value of their discovery. (His story is rather at odds with the standard Pharma history of the same events. The Pharma side now seems not to recall how skeptical the money managers were, and also believe that almost all the major discoveries were made by in-house industry scientists.)

Druker goes on to complain about the high price now being charged for Gleevic or Glivic. (HOOKED explains how the price chosen had nothing to do with the actual cost of producing the drug, and was for all intents and purposes simply what the market would bear. Within a year or so Gleeevic sales reimbursed its maker, Novartis, for all the costs of research and development.) He complains about the games played with patents and monopolies that result in these high drug prices, that put needed drugs outside the reach of too many patients. He argues that he and his fellow scientists never planned to discover important new treatments for dread diseases like cancer, just to see the drug priced so high as to be unavailable to so many.

In HOOKED, Gleevic is presented as a showcase industry success story. It's a genuinely novel drug, based on a novel biochemical concept, that produced near-magical results in its early trials for patients with a couple of relatively rare sorts of cancer. Further experience with the drug appears to date to have confirmed both its effectiveness and its low side-effect profile--a huge breakthrough in cancer chemotherapy. So, if one wanted to pat the drug industry on the back, it is hard to find a better case to do so than Gleevic. It is therefore especially sad to see even this "wonder" drug drawing this severe criticism, and for good reason.

Druker B. Don't abuse patents: scientists. http://www.livemint.com/Articles/PrintArticle.aspx

Is Industry Turning Back to Academics for Research?

This entry is courtesy our friends over at the Integrity in Science Watch, http://www.cspinet.org/integrity/. Their Sept. 8 press release features a rundown of sweetheart deals recently concluded between big drug firms and major universities, headlined by a 5-year, $25M deal between Harvard and GlaxoSmithKline giving GSK first rights to any patents generated by Harvard scientists around stem cell research. Equal numbers of GSK and Harvard reps sit on the steering committee to oversee this process. Similar deals listed by Integrity include UC-Santa Barbara, Cal Tech, MIT, U Mass, and Columbia all joining forces with AstraZeneca, and I previously blogged about UNC pretty much selling its school of public health to a commercial CRO (http://brodyhooked.blogspot.com/2008/09/cros-how-independent-really.html).

Perhaps the most intriguing part of the Integrity post is this comment: The drug industry is increasingly turning to campus-based researchers to supplement its own lagging research and development efforts, which have fallen on hard times. The number of new drugs coming out of industry labs and approved by the Food and Drug Administration is at record-low levels.

This analysis tends to confirm a trend that I suggested in HOOKED. It is really interesting that the assembly-line, merger-mania model of industrial research that the industry has favored heavily for the past 15-20 years has been such a bust. The industry thought that they could pretty much crank out useful and safe new molecules on demand if they just used a highly industrial system in which business efficiency and close links between R&D and marketing were the operative principles. Turns out, not so. So now the industry is coming back to the academic investigators, whose "inefficient" habits condemned them under the old regime. (Could it be that being really curious about how things work is actually a pretty good way to generate new scientific knowledge? Or that you really ought to try to understand basic mechanisms before you rush off to develop a new drug?)

This is of course good news for a University president frustrated with dropping NIH research budgets and the loss of tax revenues for higher ed., and who is looking to industry as the sugar daddy du jour. It is bad news for those of us concerned about the integrity of science and the huge conflicts of interest that arise when industry takes over the academic enterprise. The sad point is that there are, generally, pretty good ways to get the research done but also to maintain the integrity and separateness of the academic institution. To negotiate such a contract those on the U. side need a backbone, and a couple of other pieces of anatomical equipment best left unspecified in a family blog. In today's race to the pay window, too few universities seem to have the requisite anatomical parts. Even Harvard.

FTC Goes After New Generic Sweetheart Deals

In HOOKED I described one way that the brand-name drugmakers collude with generic drugmakers to "evergreen" a lucrative blockbuster drug about to go off patent. The process starts with the usual abuse of the patent system that seems standard these days, where the original company patents every aspect of the drug they can think of down to the color of the capsule. When the first generic manufacturer appears, the brand-name company immediately sues them for patent infringement, threatening to tie the whole thing up in court for years and keeping the price of the drug for consumers high. But (knowing that they are unlikely to win any of these basically frivolous patent claims) the brand-name company then offers a deal to the generic company--just delay the entry of your cheap drug into the market, and we'll pay you a sum about equal to what you could have made by selling the generic for that many months (but well below the profit we expect to make with the brand-name drug having no competition during those months). The winners--both drug companies. The loser--US consumers and taxpayers.

According to Duff Wilson at the New York Times:
http://www.nytimes.com/2011/09/01/business/ftc-criticizes-agreements-that-delay-generic-drugs.html
--the FTC has just reported that companies have figured out a new twist. To evade regulations, apparently, the brand-name firm no longer comes out with a blatant payoff to the generic firm. Rather the payoff is indirect. The brand-name firm simply agrees to postpone for the requisite length of time its own generic version of the drug. I know this gets complicated when we start talking about the apparently self-contradictory term "brand-name generics." The FTC claims in its report that when in the first 6 months of competition (during which by law a single generic firm can have a monopoly on the generic side of the trade), if the brand-name company (the only company legally entitled to compete during that time window, as I gather) puts it own generic out on the market, the overall cost savings to the consumer is 4-8%. So if the brand-name company can promise the generic company that it won't compete, that amounts to the same thing as handing over cash, but without handing over any cash.

At least I think that's the way it works. Anyone among the four regular readers of this blog who understands the law better than I or who can explain it better, please send us a comment.

The FTC report struck a nerve because both the brand-name drug industry, in the person of PhRMA, and the generic industry association are grousing. Each insists that agreements that prevent extended patent fights in court are good for consumers and the FTC should take a hike. Of course they are partly right--if the patent laws were effectively enforced as they were intended, all of these lawsuits would get tossed out of court from the get-go. But the FTC is certainly right in claiming that sweetheart deals by which both drug firms make a bundle at the consumers' expense is not the answer.

The Disappearance of Generic Drugs

(My source for this post is Elisabeth Rosenthal's article in the New York Times:
http://www.nytimes.com/2013/10/13/us/the-soaring-cost-of-a-simple-breath.html?_r=0
--which has actually published almost a year ago, but seems to have some important information that others besides me may have missed.)

Once upon a time, we knew that almost all drugs would eventually turn generic. Under the influence of the Hatch-Waxman Act of 1984, most drugs made the transition from expensive brand-name to cheap generic after 20 years (which actually amounted to 10-12 years after a drug first came onto the market). Walmart inaugurated the sales pitch of the "$4 generic" and generally generic drugs were quite affordable.

During the first decade of the twenty-first century, savings picked up. More and more older drugs went generic, and the companies had fewer brand-name drugs to replace them with.

Or so it was supposed to go. Rosenthal tells us what has actually happened. She focuses her story on asthma drugs.

Very few new asthma drugs are on the market, so treating this common disease should be cheap. It is certainly cheap in other countries, where the government intervenes to keep medicine affordable. But in the U.S., virtually every inhaler costs what we'd expect to pay for brand-name drugs, even if the active ingredient is as old as the hills.

One of the oldest drugs for asthma is the basic bronchodilator, albuterol. You'd think that you could get a simple albuterol inhaler for a few bucks, right? That was true until a few years ago when the FDA got environmentally conscious and demanded the drug companies remove chlorofluorocarbon propellants from inhalers because they harmed the environment. The companies were happy to do so--and were promptly issued new patents for their drug products, despite the fact that the basic drug was the same. So now we're on another 20-year rollercoaster until these drugs get cheap again (pending whatever new wrinkle the companies can throw at us in the meantime).

The FDA says that "difficult, longstanding scientific challenges" make it hard to measure drug activity deep in the lung and so assure that a new propellant or other vehicle really produces the same drug product. Meanwhile, other nations have managed to demand that drug companies sell these inhalers at much lower than brand-name prices, and nowhere in the world, to my knowledge, have any medical difficulties arisen because the dose of a drug from a new inhaler is actually different than the old dose. The US is basically the only country in the world where these drugs cost so much. (Many European countries have forced the common asthma drugs over-the-counter.)

Rosenthal writes, "The Centers for Disease Control and Prevention puts the annual cost of asthma in the United States at more than $56 billion, including millions of potentially avoidable hospital visits and more than 3,300 deaths, many involving patients who skimped on medicines or did without."

As usual, the uninsured in the US pay top dollar for these drugs. As Rosenthal notes, "Lawmakers in Washington have forbidden Medicare, the largest government purchaser of health care, to negotiate drug prices. Unlike its counterparts in other countries, the United States Patient-Centered Outcomes Research Institute, which evaluates treatments for coverage by federal programs, is not allowed to consider cost comparisons or cost-effectiveness in its recommendations.....California's Medicaid program spent $61 million on asthma medicines last year, paying more than $200--not far from full retail price--for many inhalers."

A few years back, the generic drug market appeared to be one of the areas where the large drug manufacturers were losing their clout. Now, at least for some medical conditions like asthma, they seem to have their way again.

How Pharma Pads Its Research Costs

In HOOKED I mentioned in passing that the drug industry claims that it spends more on research and development than on marketing, while virtually all independent economists put the figures at roughly 12% of revenues going to R&D while as much as 30% of revenues go to marketing. Besides that little white lie, the industry routinely pads its research numbers by slipping into the research column activities that really cannot be construed as research by any fair-minded criterion. The only specific example I was able to give, however, was "seeding trials"-- pretend post-marketing clinical trials which are really more disguised bribery, in which physicians are paid to give the drug to patients and to fill out meaningless "data" forms, the whole idea being to get practitioners to get used to prescribing the drug more and more.

I recently received from Donald Light, health systems professor at University of Medicine and Dentistry of New Jersey and an affiliate of the University of Pennsylvania Center for Bioethics, a copy of a recent book chapter he wrote. Among many other good things he provides a very handy list of these fake "research" budget items. Besides seeding trials, his list includes:

• executive costs of negotiating with other firms for new product licensing
• costs for medical writers and PR staff to write media stories about trials while they are in progress, to stimulate market demand
• support for medical journal supplements and ads in those journals, as those are often the venue where lower-quality clinical trials can get published
• lectures and CME courses to inform practitioners about current research
• legal fees related to patents and licenses, and other research-related matters
• land and construction costs for buildings in which some research is done, even if only a small amount of space is devoted to research
• company-wide technical upgrades such as new computers or software

Light D. Basic research funds to discover important new drugs: who contributes how much? In: Burke MA, de Francisco A, eds. Monitoring financial flows for health research 2005: beyond the global numbers. Geneva, Switzerland: Global Forum for Health Research, 2006.

More Conflicts of Interest--This Time, Not Pharma

See David Armstrong on the WSJ blog:

http://blogs.wsj.com/health/2008/01/18/conflicts-in-ct-lung-cancer-research-back-in-spotlight/

Just to make clear that the pharmaceutical industry does not have a corner on the conflict-of-interest market, Armstrong notes that two of the major authors of recent research studies advocating CT scans as a screen for lung cancer have undisclosed commercial ties, including patents held on the software that interprets the scans. The vast majority of journal articles that they have written do not disclose these ties, and some of the major journals in which the articles have appeared are investigating.

By way of background, I will simply note that lung cancer has historically been a disease for which no screening tests have been recommended--because there is no evidence that detecting the cancer at the point in which any screening test can see it, changes the actual outcome of the disease, which is generally pretty dismal. (Of course, prevention of lung cancer is relatively easy--don't smoke.) More recently, these gung-ho screening types have tried to persuade us that super-sensitive CT scans are the breakthrough that will detect smaller cancers at a point when they are still treatable, and so any patients at high risk (smokers, for the most part) ought to have annual CT scans. The data to date are underwhelming and seem to rely on flaky statistics to "prove" some survival benefit.

It's typical for the average joe, who hears that medical experts are against CT scanning as a routine screen for lung cancer, to imagine that it's all just an insurance company conspiracy to save money. What A.J. doesn't seem to grasp is that there are two obvious and serious personal harms that can result directly from a CT scan that is not really needed or helpful. First, these scans will have a huge false positive rate, meaning that many people will get their lungs cut open to get tissue for biopsy, just to find out that they do not have cancer. Second, we are waking up to the fact that a CT scan of the chest is no small deal when it comes to radiation exposure; so a few annuals scans and you could have been exposed to enough radiation to cause a new cancer if you did not have one already.

Nothing like knocking public trust in academic medicine and medical research down a few more notches.

Power to Biotech: Getting What They Want on Patents, Generics

Alicia Mundy in the Wall Street Journal (http://sbk.online.wsj.com/article/SB124917341780899303.html; subscription required) writes how the House Energy and Commerce Committee voted 47-11 to hand the biotech industry a major victory in an amendment to the health reform bill, handing a setback to the Administration.

The industry gets a full 12 years' patent exclusivity for its expensive biologic products, which Obama and other Democratic leaders had hoped to whittle down to 5-7 years before generic competition would be allowed. Many of the worst "evergreening" abuses, by which the brand name drug maker can extend patent rights by making only minor tweaks in a drug, also get the green light under these amendments.

If this is a sign of how likely Congress is to stand up to the Pharma and biotech lobbies to pass meaningful health reform, it is not encouraging.