Drug Patents
Counterfeit malaria drugs kill thousands in Africa
MediaGlobal (a global news agency, based in the United Nations Secretariat) recently reported on the WHO’s increasing efforts to combat counterfeit medications in Africa — and the deadly impact of these fakes.
The World Health Organization (WHO) has stepped up their efforts to combat the creation and distribution of counterfeit malaria pills in Africa. WHO estimates that upwards of 2,000 children a day are being killed as a result of taking these phony medications. Dr. Lembit Rago, Coordinator of WHO Essential Medicines and Pharmaceutical Policies, told MediaGlobal, “Usually products in high demand, price or sizeable market are counterfeited; malaria drugs fulfill all these criteria…[Counterfeit malaria pills] may contain no active ingredients, may contain wrong active ingredients or even correct active ingredients.”
There is usually a low amount of active ingredient, like the pain reliever paracetamol, in fake malaria medications, according to Rago, in order to “cheat qualitative screening tests that just react to the presence of certain actives, and thus may mimic false positive results." The ingredient may soothe malaria symptoms temporarily, but the disease remains unaffected. It is also possible that counterfeit drugs contain harmful or strange chemicals, like sildenafil, normally contained in the anti-impotency drug known as Viagra. Rago continued to say that, since malaria kills, counterfeit pills that provide no treatment "kill as well".
Low quantities of actives can also contribute to raising resistance and losing valuable drugs in the long term." As far as steps being taken to combat this practice, Rago reported, "There is no one magic bullet. It is a complexity of measures and cooperation of all concerned parties that works the best. The key is effective market control and functioning regulatory systems, including good cooperation between different enforcement agencies."
Read this article on counterfeit drugs on the Patients and Patents blog.
A Cost-Effective Approach to Maximizing International Intellectual Property Protection
By David E. Rogers, Squire, Sanders & Dempsey L.L.P. and Amy L. Hartzer, IsoPatent
Aug. 12, 2009
International competition is increasing daily. Competitors are nimble and quick to copy, and customers are demanding and looking for the best price. Brand name and personal relationships still carry some weight, but not as in years past. One way for U.S. manufacturers to compete effectively in today’s marketplace is by controlling innovation through intellectual property ("IP"). Given the international nature of business, IP protection should also be international and, to the extent cost effective, coextensive with a business’ current and future market presence.
We suggest a three-step approach to creating an international IP portfolio. First, regardless of location, always utilize contracts and trade secrets with employees and business partners, such as suppliers, distributors and contractors. Second, if practical, use patents to both (i) fortify the protection provided by contracts and trade secrets, and (ii) protect your technology from entities with which you have no contractual relationship. Third, select the countries in which you desire patent protection, which are usually those in which your products are sold or will be sold, and then implement your IP strategy.
Below we explain the IP protection mechanisms, how to select the countries in which patent protection should be obtained, and two case studies that apply these principles.
(1) The IP Protection Mechanisms: Contracts, Trade Secrets and Patents.
(a) Contracts: Whether or not your technology is protected by a patent, it may still be protected by contract. Contracts should always be used with employees and your direct business partners, such as suppliers, distributors and contractors. Contractual protection may even be suitable for customers (for example, if you already enter into contracts with customers to sell industrial machinery.)
The contracts should require your employees and business partners to (i) maintain the confidentiality of business information (such as your technology, designs, marketing plans, costs, selling prices, and the identity of vendors and customers), (ii) not compete with you during the term of the contract and for a reasonable period of time (usually one to five years) thereafter, and (iii) assign improvements to your technology to you.
You can usually select the law that governs a contract and the locale for resolving contract disputes. Select the law of one of the United States that is likely to uphold the contract’s provisions (particularly the non-compete clause) and require any dispute to be resolved in a U.S. court or in arbitration in the U.S. If your employee or business partner is outside of the U.S., check with an attorney in the country where your employee or business partner is located to ensure the contract provisions are enforceable there.
The costs to enter into contracts are the legal fees associated with preparing and negotiating them. Depending on a contract’s complexity and the length of negotiations, plan on about $3,000 - $10,000 per contract with each business partner. The costs for employee contracts are usually negligible.
(b) Trade Secrets: A trade secret is information that both: (1) derives actual or potential economic value from not being generally known and not being readily ascertainable to others by proper means, and (2) is the subject of reasonable efforts to maintain its secrecy. Trade secrets cost nothing to obtain, although maintaining them requires some expense because each person or business exposed to the trade secret should execute a contract with an appropriate confidentiality provision (also called a non-disclosure provision).
Here, all persons and businesses that executed contracts in the preceding Section (a) would be bound to maintain the confidentiality of your business information. By using contracts and other reasonable efforts to maintain the secrecy of your information, trade secret protection protects against the misappropriation of your information by anyone, even persons with whom you have no contractual relationship. That is the added benefit of trade secrets as compared to contracts.
Information that cannot be maintained as a secret includes (1) publicly-available product designs, and (2) things that can be reverse engineered, such as (i) internal components that can be discovered through disassembly of a product, and (ii) material compositions that can be ascertained through laboratory analysis.
Trade secrets have at least one advantage over patents. In many countries, including the U.S., trade secret life is potentially indefinite whereas a patent’s life is typically 20 years from the original patent application filing date.
A major disadvantage of trade secrets is that they do not protect against independent development by a competitor, whereas patents do. Further, once a trade secret has been disclosed to numerous people, even with the proper confidentiality agreements in place, it can be misappropriated without you knowing who was responsible.
Read the rest of this article on pharmaceutical patent and other intellectual property issues on IndustryWeek.com.
Pharmaceutical Patent Trolls: Short-Term Pros And Long-Term Cons
Pharmaceuticals is an industry exposed to many unique risks. The capital intensive research and development (R&D), the uncertainty of Food and Drug Administration (FDA) approval, and a constant shroud of legislative risks may seem like a lot to deal with, but one of the fastest growing threats for pharmaceuticals are patent trolls.
The Pharmaceutical Process
FDA approval is already a long process, and even properly-approved drugs have left companies open for litigation. To take just one example from 2008/2009, there is an ongoing legal argument about whether federally approved warning labels pre-empt state law. The main problem was that if the Supreme Court ruled that warning labels didn’t pre-empt state law, or if Congress changed the rules to give state law equal importance, then drug companies could find themselves facing more lawsuits. In addition, the drug companies would have to go through FDA approval followed by state by state compliance checks - all of this adding to the already considerable costs of doing business.
Patent trolls, by either attacking existing patents or hoarding vague patents, hurt pharmaceutical companies more acutely by reducing returns on investment at a time when both the companies’ costs and risks are rising. Drug companies need large cash reserves/war chests at all times to pay for capital-intensive research, FDA approval and settling lawsuits. To maintain this war chest they need strong and, more importantly, stable profits from their products.
Risk and Return
These companies pay out the huge R&D costs in return for huge possible rewards on patented drugs. The rewards are more or less proportional to the risks, as many drugs never make it to market, meaning they never pay back their R&D costs. Drug companies want their patents, essentially their intellectual property rights, protected for as long as possible. They want an exclusive monopoly over their product in order pay back the costs of development along with a profit equal to the risks taken on by the company. Excess profits will either go to the shareholders or cover the costs of the many failed drugs that never make it out of developmental stages.
Trolls Provide Short-Term Benefit
Whether it is generic aspirin or generic Viagra, the patient receives an immediate benefit from patent trolls in the form of a lower price for medicines. This short-term benefit is no doubt much appreciated. The government also tends to think short-term - a cynic would say in four-year cycles - and generally in line with patients. They want cheap pills for voters and are more than willing to see corporate profits take a hit to meet that end. Governments have shown their support for patent trolls by creating legislative loopholes and eroding patent rights.
By attacking long-term patents, trolls are able to open up specific formulas for generic mass production and bring cheap generic drugs to market quicker. In the short-term, it’s hard to argue that cheap medicine doesn’t benefit the general population. In the long-term, however, the actions of patent trolls may actually hurt everyone.
Long-Term Problems
Bringing cheap pills to market quickly makes patent trolls look like important middlemen in the process towards generic drugs, but their long-term impact is more subtle and devastating. In the current pharmaceutical structure, drug companies pony up the cost of R&D. Therefore, even a slow drain on their reserves means less R&D and less new drugs in the future.
You might disagree with how much these companies take as profits for their shareholders, but it is those same profits that motivate the best corporate and scientific minds to keep searching for new medicines - and it is those profits that convince investors to put their capital behind the research rather than investing it somewhere else.
Possible Fallout
There are a lot of possible outcomes for the rise of the patent trolls. One is that drug companies will be pushed further away from high-cost, high-risk research and into simple domestic products like mouthwash and skin cream. Some of this can be seen in the 2009 acquisitions by Pfizer (NYSE:PFE), Merck (NYSE:MRK) and others. These companies have focused on other companies that have strong brands in household goods. These products and markets will be used to hedge against losses in the pure drug research, but they will also divert capital and research from the R&D. Instead of a pharmaceutical industry, we’ll end up with a bunch of Johnson and Johnson (NYSE:JNJ) clones that occasionally make medicine.
Along with a more domestic focus, the trend of buying companies to fill existing and upcoming holes in the pipeline will intensify. As patents end prematurely and new drugs have yet to fill their place, many drug companies acquire other companies’ products to prop up revenue. Unfortunately, the merger of two pipelines and two corporate cultures often leads to less overall spending on R&D rather than any significant synergy. Many drug companies are focusing ever more on pills with commercial appeal (erectile dysfunction, weight loss, etc.) and tightening their spending on expensive research into cures for rarer but more critical maladies.
As patent rights are shortened, less drug companies, especially poorly-capitalized small companies, will be able to survive. Some of them will be absorbed into the larger conglomerates, but just as many will simply fold up. Consolidation might not lessen competition so much as shutdown areas of research if the innovation of smaller firms is lost. Taking this one step further into extreme speculation, government might then have to step in and fund drug research with tax dollars – with all the waste and add-ons that come with government-led initiatives. So you might end up with taxpayers footing the bill for expensive R&D that may achieve nothing, rather than R&D that costs nothing to taxpayers.
Read more about pharmaceutical patent trolls.
Influenza pandemic: Pandemic flu shows need for pharma incentives: WHO
Great article from Laura MacInnis and Stephanie Nebehay regarding pharma incentives to create vaccines that fight against emergent threats, including the latest influenza pandemic.
By Laura MacInnis and Stephanie Nebehay
GENEVA (Reuters) - Pharmaceutical firms need incentives, including lucrative patents, to keep creating drugs and vaccines against emergent threats such as the H1N1 influenza pandemic, the World Health Organization’s head said on Tuesday.
“Progress in public health depends on innovation. Some of the greatest strides forward for health have followed the development and introduction of new medicines and vaccines,” said WHO Director-General Margaret Chan said.
Chan, who last month declared a full pandemic underway from the H1N1 virus, said that patents can help ensure that companies develop medicines to “stay ahead of the development of drug resistance” in diseases like malaria and tuberculosis.
The discovery of isolated H1N1 infections that resist the anti-viral Tamiflu, made by Roche and Gilead, and the global scramble to secure flu vaccines have shown the importance of robust research and development, Chan said.
“Innovation is needed to keep pace with the emergence of new diseases, including pandemic influenza caused by the new H1N1 virus,” she told a meeting on intellectual property and health, a contentious issue that has divided rich and poor nations.
In the speech, Chan said most drug access problems faced by developing countries could be remedied by tinkering with the existing patent system, which “operates as a stimulus for research and development for new products.”
In May, at the WHO’s annual assembly, rich and poor nations failed to reach consensus on how they should share virus samples of H1N1 and other flu strains with companies that use the biological material to make vaccines.
Indonesia has been especially vocal against this, arguing that developing countries would not be able to afford patented jabs made from their specimens.
Maximizing Pharmaceutical Patent Lifecycles
by Stephen Albainy-Jenei
June 30, 2009
The American Conference Institute’s Maximizing Pharmaceutical Patent Lifecycles, the 10th Anniversary Edition will be held at the Helmsley Park Lane Hotel, New York, New York, on Wednesday, October 7, 2009 to Thursday, October 8, 2009.
Overview
This 10th American Conference Institute event on Maximizing Pharmaceutical Patent Life Cycles will bring you the thoughtful and targeted commentary and in-depth analysis that you have come to expect from this industry leading conference. This year’s conference will help you prepare for the sweeping changes currently underway by providing you with:
* Focused panels on the pending Follow-On Biologics and Patent Reform legislation that will allow you to assess how both legislative proposals will impact pharmaceutical patent life cycle management
* Access to key officials from the FTC’s Bureau of Competition’s Health Care Division and the EC’s DG Competition’s Pharmaceuticals Task Force who will provide you with direct insights into the logic of these agencies on some of the most pressing antitrust matters currently affecting the industry
* An in-depth review of new FDA determinations regarding exclusivity, forfeitures, patent listing and delistings and strategies for incorporating these guidelines into your initial life cycle management plan
* Analyses of key cases that have affected patent life cycle strategies and tips for using these rulings to your advantage
Also, this year they have added the following specialized class:
Hatch-Waxman Boot Camp – A Primer on IP Basics and Regulatory Fundamentals
This Boot Camp, together with in-depth Master Classes for brand names and generics on:
* New Strategies for Obtaining Pharmaceutical Patent Extensions in a Post-KSR World
* Updated Drafting Guidelines for Paragraph IV Certifications and Notice Letters
will offer hands-on practical advice on core Hatch-Waxman principles as well as some of the most critical day–to–day concerns for both sides of the pharmaceutical industry.
Nearly 2,000 pharmaceutical patent professionals – for both brand names and generics – have made this conference their source of information for the legal issues surrounding life cycle management for nearly the last ten years.
Diamonds Are Forever. Why Not a Drug Patent?
Carl Weissman 5/29/09
Tell me if this makes sense to you:
—If I buy a diamond, I can own it for as long as I like;
—If I produce a brand name for a product, provided that I trademark it, I can own it for as long as I would like, until and unless it becomes “generic” (like the term “escalator”, which actually started as a brand name);
—If I write a novel, provided that I copyright protect it, I can own it until I die, and my heirs can maintain those rights for 70 years longer; but,
—If I invent a drug, even if I protect that intellectual property to the full extent of U.S. patent law, I can only own it for 20 years from the date I file for a patent on it.
I can own a tangible good forever, I can own a trademark virtually forever, I can own a copyright for my entire life plus 70 years. But property which is more intrinsically a part of me – my idea, my invention, the product of my intellect – I am only allowed to own that for 20 years after I reveal it to the patent office.
Rationally, it seems obvious that all property – whether tangible or intellectual – should be subject to the same rules and laws of ownership. If you can own a gemstone forever, you should be able to own an invention forever. In fact, if a society wishes to impose differential standards for ownership rights to different types of property, wouldn’t it make more sense that preferential treatment be given to those items which are the product of your talent, your creativity, your self, over those things which you earn or purchase based upon that product of your efforts? The logical extension of this argument, in any free society, is that you should be able to own all property, whether purchased or invented, physical or ethereal, for as long as you wish. Patents, trademarks, copyrights, title – all should be perpetual.
Read the rest of this article on drug patent laws here.
The Hudson Institute on Drug Patents
Drug Patents and the Future - Hudson Institute, December 2001
Excerpt: A worldwide campaign is now well underway to demonize pharmaceutical companies and champion generic drugs. Former Vice President Al Gore employed this argument in his last presidential campaign as do various organizations including Doctors Without Borders, Act-Up, the AARP and a host of others.
Duke Law and Technology Review: Strong Drug Patents
Facilitating Access of AIDS Drugs While Maintaining Strong Drug Patent Protection - iBrief, December 2001
Excerpt: The AIDS pandemic has thrust the subject of patent protection into the spotlight, a spotlight that has attracted the attention of broad audience including interested parties from the political, legal, and medical communities. Can the United States’ scheme of strong patent protection for pharmaceutical products withstand the increased attention?
Drug Patents and Patients
Busting Drug Patents Won’t Help Patients - OC Register, April 2008
Excerpt: Thailand’s health minister announced a few weeks ago that the nation’s state-run drug manufacturer, the Government Pharmaceutical Organization, would continue to violate the patents on four key cancer drugs. Health activists from across the world are applauding the move, apparently believing that intellectual-property rights are an obstacle to bringing medicine to the world’s poorest and sickest citizens.
Drug Patent Piracy Article from WSJ
Drug Patent Piracy - WSJ, May 2007
Excerpt: The U.S. Trade Representative recently named the usual suspects for its annual “Special 301″ list of countries whose disregard for intellectual property rights merit special attention. In addition to perennials like China, Russia and India, Thailand — the sole newcomer — was elevated to the rank of top offenders on this year’s Priority Watch list for combining piracy and transparency problems with an ill-conceived compulsory drug licensing scheme.