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June 23, 2010



Nice report. Once more, "amateurs" (aka two medical students) opining out of sheer ignorance, and without bothering to get an appropriate factual basis for drug development costs. What I continue to find scary is that uninformed and ill-informed opinions like these are too often accepted by the general public without critical analysis. Also, if you challenge such opinions for their ignorance (and inaccuracy) you run the risk of being labeled an elitist, against free speech, etc.

Interesting stuff. Sherry is smart, but she's about as much out of her element in arguing that these decisions constitute a takings as the medical students. If KSR and Bilski are takings, then what is the Sonny Bono Copyright Term Extension Act? Give the students a break. I don't have a problem with their article. I disagree with their position on "pay for delay" but it's not like they are all alone on that issue. Maybe you just feel that doctors should stay out of public policy debate. Pretty arrogant view. Remember, most molecular biology/cell biology/biochemistry graduate students are just failed medical school applicants...

At least they're still idealistic while they're young. I only hope that if (God help us), because of efforts like theirs, the time ever comes when the new drug business becomes sufficiently unprofitable that new drugs aren't being developed, and their patients start to die from infections from bacteria that are resistant to all the antibiotics known at that time, they'll fess up to being part of the problem, and work to get the drug development business back on track. But it would be a shame for such a catastrophe to have to take place before sanity is restored.

Calling this an "uneven" debate betrays the sorry lack of scientific rigor on BOTH sides of the aisle. A quick example: any chance you could source your comments like the "Her prescription ..." (par. 4) with a study not led by Grabowski, Dimasi, or Vernon (regularly funded by private money form pharma/biotech)? We can argue all day about the validity of studies by Kaiser and Public Citizen, but at least they do not have the major conflicts of interest of Knowles' sources. The oversight (or lack thereof) in magazines and journals is not the only measure of a study's validity or scientific weight.

Another example: IF pharma is truly maximizing *innovation, why is generic competition after years of patent protection causing their stocks to drop? Why beg (or pay Congress?) for even more protection and "incentives," when the current incentives are not yielding results? More reasonable to me is that the drop in consumer confidence is tied to pharma's continuing and escalating history of scandals (recent Pfizer fiasco being a perfect example) and their failure to develop many great new blockbusters. Pharma and biotech now spends half as much on R&D as they do on marketing (Gagnon and Lexchin, PLoS Med, 2008) -- this trend is totally unacceptable of true "innovators."

A couple other quick tidbits: Knowles' quote from the National Academies article is an utter mischaracerization.

What Knowles wrote:
"On the contrary, a National Academies study recommends extending the data exclusivity period to 12 to 14 years to avoid competitive disadvantage in the United States “given the complexity and length of drug development today” [p. 190 in (1); (2)]."

Quote from NAS on p. 190:
"In the near term, the United States should adopt the European period of 10-11 years. However, research should be undertaken to determine whether this period is adequate, given the complexity and length of drug development today."

The second citation on this last quote (2) is “The Patient Protection and Affordable Health Care Act of 2010, signed by President Obama on 21 March 2010, provides 12 years of data protection for follow-on biologics.” This is an irresponsible mis-characterization of the National Academies study -- what is this doing here, and why did Science editors allow it?

Furthermore, it is very convenient to leave out that the same CBO study Knowles cites also acknowledges too little pharma investment in R&D, urges the U.S. to expand prescription drug coverage and medicaid rebates, and suggest that drug companies need to pay larger rebates for Medicare Part D (one of the main factors in America's rising healthcare costs). Not quite so clean a picture anymore, right?

P.S., Pay-for-delay is a totally legitimate problem: compensatory agreements from brand-name to generic companies prohibit generic entry for nearly 17 months longer than agreements without payments; most of these agreements are still in effect, protecting at least $20 billion in brand-name drug sales from generic competition, and costing American consumers an estimated $35 billion over the next 10 years (January 2010 FTC report: "Pay-for-Delay: How Drug Company Pay-Offs Cost Consumers Billions").

This is one of the more informed debates I've seen on this subject. Congratulations to the participants.

The problem, fundamentally, is that politics is the tail wagging the 500 pound health care economy dog. Opinions are essentially belief-based, just as with religion. Facts exist only to serve the cause, as we've seen in this little debate.

Health care, and pharmaceuticals in particular, are now part of a government-private hybrid command economy piloted by large politically-active institutions, festooned with distortions and inanities. There's more equity and common sense around a dry season Serengeti watering hole.

Don't believe me? I just picked up a relative's prescription for doxycycline, a generic drug. The pharmacy presented the goods - and a $310 bill. But wait, there's more. Free samples given out at the doctor's office come with a rebate card that reduces the cost to $25 maximum. It's as if the plumber wants $1000 for the service call, but if you harness up your PhD in Discountology, it's $50.

We have an insane health care edifice, soon to be much worse. Exclusivity periods are merely the June Bug on the door screen.

Dear Gary:

I would be more sympathetic to the students' position if there was evidence that they brought equal passion to battling insurance companies. I don't think the Sonny Bono case apposite, since that was giving more term to copyright holders, not less. Sherry may be right or wrong on her takings argument, and I don't think doctors should stay out of public policy debates. I do think most doctors don't take the time to acknowledge that there are legal issues they may not fully understand, and use their positions as proxy for actual knowledge about these issues. I refrained from characterizing that position as arrogant, but that's exactly what it is.

Thanks for the comment.

Dear Eric:

Don't think that political persuasion can't imbue just as much bias as you attribute to Professor Grabowsky et al. The issue of peer review isn't whether journals are proper gate-keepers; it's whether an academic is willing to risk the harm to his reputation by espousing views and conclusions inconsistent with the data.

We can disagree with how pharma spends its money, but there is not much of an alternative for new drugs, and insofar as biotech is to pharma as Microsoft/Apple etc. were to Xerox/IBM etc., that cycle will turn.

As for reverse payments, now you are selectively citing the data. Most appellate courts have found that these agreements are pro-competitive (or at least not anti-competitive).

Thanks for the comment.

Dear Max:

Colorful and succinct.

Thanks for the comment.

We're going to throw your old gaurd system out when you guys leave, or are tossed out. Bet on it. Your protectionist nonsense regarding pay for delay may have fooled one court, but it won't fool people forever.

Dear 6:

I'm not worried. Anyway, there is more than one court that has found reverse payments to be legal and not anti-competitive; in fact, most courts have done so. The FTC presumes these agreements to be anti-competitive because they presume the patents are or will be found invalid (something you probably agree with). At least they have the excuse that they know little about patent law.

So don't presume fools or foolishness.

Thanks for the comment.

What would Ms. Musselwhite's sentiments be if Humera were not available to treat Crohn's disease at any price? What would be the next-best option for all Crohn's patients?


The Sonny Bono Act reference was an attempt at humor (e.g., if KSR is a "taking," then is the Sonny Bono Act a "giving?"). But my point remains: people are on shaky ground when they attempt to apply the takings doctrine to intellectual property rights.

Kevin, I enjoyed your article and thoughts. The frustrations of an ill functioning healthcare system make it easy to misplace blame and anger. Everyone can agree on what the results of healthcare should be, but the discussion around the means for acheiving those results is almost always driven by emotion and that person's sense of "fairness" that they would like to impose.

Although I somewhat disagree with the "takings" position supported by Ms. Knowles, these are precisely the types of arguments (supported by facts) that help move the debate forward. So hopefully if the Medical Students (or other defendants)respond to the Knowles response, they have to acknowledge sources like the Public Citizen Report should not be cited and it stops being repeatedly cited by others.

However, I still come back to Kevin's initial comment on the background of the students. My own experience has been that I have almost never been convinced to change my position in these sorts of debates until I've had those life experiences myself. But I would still hold out some hope if the debate is more driven by facts, as even I changed my views on many issues after watching Milton Friedman's "Free to Choose" series a couple years ago which were rigorously supported by facts and logic! (ideachannel.tv)

Dear Gary:

I agree that apply takings law as Sherry has tried to do is an extension of the concept, and one that has it's limitations. Now that I "get it," the Sonny Bono reference was funny.

Thanks for the comments.

Dr. Noonan,

Your subtlety is amusing:

"At least they have the excuse that they know little about patent law.

So don't presume fools or foolishness."

Are you purposely presuming knowledge (at least a little) on the part of the poster, and implying that to disagree renders the poster himself a fool?

David Boundy: EXACTLY. I'd like to say the same thing to the plaintiffs in the BRAC1 case.

And, has everyone who thinks that "the government" should be developing new drug therapies forgotten that government funding = taxes?

The high cost of medical treatment is one reason why I've been heartened by recent developments such as patent pools and compulsory licensing for pharmaceuticals treating certain diseases that are a threat to the public health. The truth is that investment won't happen unless investors stand to make a profit.
Another possibility could be a multi-tiered patent system that gives different degrees of rights to different types of patents. Such a system could, for instance, grant longer patent terms to certain pharma products. Perhaps this would incentivize them to agree to lower their prices.
Ultimately, the answer may be flexibility. I think that we need to be both pragmatic and open-minded, and start considering new approaches. Because the traditional patent law structure is no longer meeting our contemporary needs. Unfortunately, I'm not sure Congress is capable of enacting meaningful patent reform, so we may have to rely on Kappos and the USPTO.

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