Posner's right. It seems that there needs to be some new notion of what constitutes patentability.
Drugs are an interesting case as they have these factors going for it:
1) Expensive to bring IP to market. Lots of testing and clinical trials for drugs. For SW it is pretty cheap now.
2) Easy and cheap to copy. Generic versions can be reverse-engineered quickly. Probably just as easy to copy software, but I still feel like this is probably a useful pillar.
3) The IP by itself constitutes the majority of the value of the product. In medicine there isn't typically tons of other IP around that come together to form the product. In SW there is rarely a single piece of IP that is more than a small fraction of the value of the product.
4) The IP has longevity as a standalone product. Viagra can be sold for decades. Aspirin still probably does hundreds of millions in revenue. There is little SW IP that, by itself, has longevity. The nature of SW is to continuously improve it.
5) Time to market isn't a huge advantage. Since most medicine is just sold as effectively a commodity, being 6m ahead of your competition usually just means you have 6 extra months of revenue. Whereas in SW it also means that gives you 6 months to build on your current IP. In medicine you don't typically do Viagra 2.0, with a boatload of new IP that makes the original obsolete (and hence any competitors shipping the old version scrambling).
People love to cite drugs as being a case where patents work well. But patents are far from a perfect fit for this problem.
Among other reasons, in an industry that is entirely dependent upon patent protection to defray the costs of getting FDA approval, it is impossible to get treatments through the approval process when they are not covered by patent.
For example somewhere on the order of half a million people in North America have Crohn's disease. This is a rather nasty sickness that destroys quality of life, and requires lots of rounds of only marginally effective medication. Research indicates that hookworm infection is an effective treatment. The FDA has decided that this treatment requires their approval. But you can't patent hookworms, and therefore nobody will pay for the necessary tests to get FDA approval. And so a half-million people continue to suffer.
If the rules were changed to grant a temporary monopoly to the company that got FDA approval for a treatment, this problem would vanish. A number of known treatments would go through trials and get approved.
> People love to cite drugs as being a case where patents work well. But patents are far from a perfect fit for this problem.
Bringing drugs in the discussion has more of a relative role than any absolute metric though. We could subsume the reasoning as such though:
- patents work better on drugs than on software by leaps and bounds
- patents are far from a perfect fit for drugs
- it follows that software patents are an atrocity of abysmal scale
Sure you can patent hookworm therapy! You can't get a composition of matter patent, but you can get a use patent. There is a company right now running clinical trials on a similar therapy.
And if you did get it approved, and managed to sell the treatment to everyone in the USA who has Crohn's disease, you'd need to make a profit of several hundred dollars/person just to pay for the cost of FDA approval. Realistically you'd want to charge more to recover up front risks, the cost of marketing, and uncertainty about what fraction of the target population you'd successfully sell to.
I don't disagree with these points, but my personal take is that the primary difference between software patents and other patents is that most things that end up getting patented in software are things that pretty much any programmer may implement in the course of trying to solve some problem. The patented algorithms often aren't novel or unique, but someone just stood up first and said "Look here what I did. I want a right to exclusivity on this." Even though someone trying to get to the same end goal at some point in the future probably would have easily developed the same method.
In drugs, the end result gets patented. Some chemical formula that's just right, which (in most cases) was not simply stumbled upon in the pursuit of something else. And even if it was stumbled upon, it's still novel and was not likely to be created as a product or byproduct by another party very easily. The insight required to develop the drug was most likely unique.
The equivalent to most software patents today in the drug field would be patenting methods of, say, mixing chemicals. Imagine if there was a patent on mixing two solutions by pouring one from a beaker into the other in a flask, twirling around twice and then shaking gently four times. What if someone had a license to that mixing method and everyone else had to pay to do it? It'd be ridiculous. It seems like that's basically what software patents are.
The equivalent to drug patents in the software world would be, I guess, patenting an entire OS, or an app, or some fully integrated, significant piece of software. For example, no one should be able to make a counterfeit copy of iOS as a whole and sell it as their own. That I would support legally. I (think?) this is already covered by copyright law.
I'm betting that in many worlds your "pretty much any programmer may implement" goes for nearly all MechE patents too, civil maybe as well, and plenty of EE patents I'm sure.
In reality, nearly all patents are just ::at best:: a year or two of an engineering team crunching on a problem using existing methods - usually far less. It's difficult to say which are which though - so maybe patents are really what we want at all for nearly all things?
Yeah, but I don't mind monopoly protection for something somebody worked a year on. Software patents are granted for many times the effective lifetime of a technology, for something you or I could do in a week based on ideas we've all had because they're natural solutions to their problems.
Like patenting the use of a hinge for a door instead of patenting how to make a hinge, and the patent being granted for the entire time humanity uses doors at all.
Exactly, you can't patent 'the cure for cancer' without describing the cure, but somehow you can patent 'swipe to unlock'. If it didn't take serious research and give the reader a decent insight that they wouldn't have had just by reading the title of the patent then it shouldn't be patentable.
The equivalent of describing the molecule for a drug patent is providing the source code, which is already covered under copyright protection. Sounds like a good case to make software patents redundant
I think we really need to consider what patents are for - because "somebody worked a year on" is waaaay to broad. This is about helping society right? Working a year isn't a big investment for a company - so if it's such a great invention they'd easily be able to recoupe their costs.
This goes the other way too - Edison's Lab developed the first phonograph supposedly in months - yet that's far more on the "deserving" side of patents.
Time isn't the best measure, but we have to consider what an actual good one would be. Giving at patents with relatively little oversight leads to a ton of prevented inventions, but how could we possibly inspect patents to a degree that we'd be able to. I haven't seen a plausible explanation that this search problem is even tractable.
note that both "car" and "computer" were patented at the concept level (both causing huge messes, incidentally). of course, those patents expired long before the relevance of the concepts....
one of the things someone pointed out to me most of a decade ago is that more and more things are becoming algorithmic--or perhaps we should say, being revealed as being algorithmic.
take some classic physical patent like the Bessemer process for steel--given a suitably general collection of industrial robots and reconfigurable equipment, "make steel like this" is "implementable" in software.
or any random machinery patent--"be this specific kind of rotary engine" is software if your hardware is a few trillion nanites.
what exactly the implications are for the patent system, i'm still not sure....
> In medicine you don't typically do Viagra 2.0, with a boatload of new IP that makes the original obsolete (and hence any competitors shipping the old version scrambling).
Actually, there is an entire class of drugs known in medicine as "patent extenders". Take your expiring patented drug, alter the formulation, or attach an unnecessary chemical group that doesn't affect the mechanism of action, et voila! Twenty more years of monopoly.
As a result of this, there are drugs which were prescribed twenty years ago that are no longer available-- since the original developer has moved on to an "improved" version which may be less effective, while the generic version is not profitable enough to be widely available.
What this means for intellectual property, I'm not sure. It's a tricky issue.
How do the patent extenders work? I mean, what's to stop the generic from just continuing to make the original formula, if the alterations don't actually do anything?
Nothing. But why prescribe the generic Lowpainex when the new Nopainatall is proven to be 0.5% more effective? Plus the Nopainatall guy gave you some pens and pads and toothbrushes, and there are ads on every night telling people to talk to their doctor about the newest breakthrough that leaves old drugs behind.
Your patients don't want the old drug, do they? They don't want some pain, they want none.
Of course, Nopainatall is just Lowpainex combined with Tylenol... but that's inconvenient to take separately.
They don't just hand out pens and pads. They pay for vacations thinly disguised as business trips, they pay for equipment, whatever it takes. One company selling generics paid doctors 5% of the cost of each prescription, they just send them a check. The latter was just ruled legal by the highest regular German court, basically saying that it's corruption, but there's no law in the books that forbids this particular kind of corruption.
I can't imagine these things are hugely different in the land of the free.
similar. my mom is a physical therapist and her building also has some doctors. a few years ago her employer/state laws banned accepting gifts (like lunch, pens, and pads of paper, &c.) from drug reps, but I still have a massive box of clicky pens with weird drug names on them from before the ban a few years ago.
My mom has a strict no-gifts-from-reps policy-- she won't even take a card, as far as I know. There's been one exception to this: At one point, a rep found out it was her birthday, and delivered a huge cake. To the unit.
Of course, she wanted to refuse it-- but after they walked it all the way down the wing, how could she tell her staff that they weren't actually getting any cake?
Don't most insurers these days require you to take the generic if one is available? So it shouldn't really matter whether the doctor prescribes the brand name or the generic. Or does that generic-if-possible rule not work here because the brand name one is ever so slightly different?
Yes, the new drug is different, so there is no generic for it.
Another class of "patent extender" is to take two existing good drugs, package them together, and then trial and sell it as a new drug. The combined product is not the same as the two off-patent generic parent drugs.
I'd love to see an example of this. I'm not saying I don't believe you but I'd really like to see an example and then look to see what Kaiser (a medical insurer and provider here in CA for the non-CA and a few other state folks) does since I don't think they would go for that.
Thats exactly the point, if the drug is covered under patent there is no generic. So if the doctor prescribes the newer yet not better drug, there will be no generic alternative.
Nexium is a patent extension of Prilosec. In order to patent Nexium, they had to alter the chemical structure and run clinical trials to show that Nexium was an improvement over Prilosec. Some critics argued that the trials inflated the differences. IIRC, when some generic drug makers tried to sell generic versions of Nexium, AstraZeneca sued them and won.
Malcolm Gladwell, covered this and other issues affecting pharmaceutical pricing in a 2004 article. It's an even-handed article, worth reading the entire piece -
The way it generally works is that Big Pharma releases a new "2.0" version (often a cis-isomer or the same molecule with a non-functional dangly bit on it), then hands out a bunch of money to get a portion of doctors to quit prescribing the old one, and floods the market with advertising about how amazing the new one is, without letting anyone in on the fact that it's actually functionally identical (or, as Cushman points out, sometimes marginally less effective).
partly it's payment details: a lot of patent extenders roll out right when the generic goes to over-the-counter status--insurance pays for the new prescription drug, but won't cover the old one at all anymore.
the one relevant to me on a daily basis is zyrtec/xyzal -- xyzal is just zyrtec filtered for the correct chiral form, but the prescription is cheaper than the OTC for me thanks to my insurances' rules.
There should be an easy fix for this one though: only give patents if the drug either does something totally new (e.g. cure cancer) or is fundamentally different than any previous version, while being more efficient (no point in a drug that's 99% different but has the same effectiveness).
You have to be careful with this! If you look at the statins, there are more than 5 distinctly different drugs that are work through the same mechanism. Me-too drugs right?
Well, some patients can't take Crestor because of a rare side-effect, so they switch to Lipitor and are happy. You have to remember that patients have individual needs and sometimes what looks like two identical drugs actually provide a benefit to the patient.
Sure, they only way to truly solve these things is stop making it a mechanical process and turn it into an interactive process with people involved who have common sense. Patents should be "deny by default" with the party arguing why they should get one. If they can convince the e.g. "board of experts" then they get it. Then we just have to execute the first "board of experts" member who takes a bribe. :)
Drugs are typically presented as the crown jewel for patents, but an examination of the modern drug industry destroys that notion for me. Some decent arguments can be found here: http://www.dklevine.com/papers/imbookfinal09.pdf
Indeed. But one could have known as much by analyzing the moral case against patents: patents are unjust restraint of one human being from acting to think, create, and sell. There is no possible argument to say that you can bind another human down "because I thought of it first", really patents reflect the moral mentality of a two-year-old.
With something like drug patents, there's a lot more going in than 'I thought of it first'. Remember, you're supposed to have a working implementation to patent something, too.
> two-year-old.
Name calling is not a pleasant or productive way to debate a complex issue.
There's nothing particularly complicated here. We are dealing more with mythology and barbaric thought processes than with an actually complicated problem.
It's not easy, and trying to create property artificially is hardly 'barbaric', even though it has its drawbacks (unfortunately, so do all the other solutions).
It is barbaric to think that if you think of something and create something based on it, then you can attack someone (whether directly or via the government is beside the point) and take their property if they think of and create it too. It's simply barbaric. There's no possible rational/moral justification here.
Now, you may not see the barbarism clearly or at all. But that merely explains why you don't why calling it barbarism.
There is some rational justification explained in detail in the link I posted: creating artificial property is one way of confronting the underprovisioning of public goods. It's imperfect, but so are all the other ways, and so is simply letting them be underprovisioned.
Calling people barbaric for disagreeing with you is not really ok in this community.
Exactly, patents and intellectual "property" always refer to arguments relating to physical property; when by their nature the explicitly limit the rights you have to use physical property that you own. It's outrageous.
Not if they are used to prevent someone from creating a new version of something that implements some pattern which looks like a previously patented thing.
If by conception you mean looking at "you get a monopoly to make X related product" without looking past to "meaning someone else can't make Y related product"
No, they are a restraint on original creation. If your original creation is conceptually similar to something else filed with a bureaucrat, you lose your original work. If you are a small company, and someone claims that it's similar, then you probably loose your work regardless of whether it's similar.
How do you propose someone could demonstrate that they independently arrived at the same idea, rather than simply observing the existing idea.
If you think "I thought of it and no on else did" is not worthy of being protected property then that is fine and you can make that argument and I wouldn't necessarily argue against you, but I don't think it is accurate to solely argue against patents by characterizing them solely as protection against random other people independently coming to the same idea without the original inventor affecting them at all.
John Siracusa recently covered patents on his Hypercritical podcast: http://5by5.tv/hypercritical/68. Nice dissection of the idea of drug patents as being "special" (vs other kinds of patentable IP) in there as well.
The society needs to find a new way to give incentives for drug development. Patents may seem to solve the problem from the drug company's point of view, but it keeps the price of drugs prohibitively high for the less fortunate of us.
So there are billions of people in the world who are left without medication or use wrong medication because of intellectual property licensing and pricing issues. This leads to unnecessary suffering and other bad things like antibiotics overuse (particularly in India) and drug-resistant strains of deceases.
On the other hand, with drugs you have the problem that for the 20 years that the patent owner has a monopoly, the price to consumers is high compared to after the patent expires and the generic version becomes readily available.
People can die during this time because they can't afford the drug.
A possible solution:
1. Add to drug patents a compulsory license, allowing anyone to make the drug provided they pay a royalty determined by statute to the patent owner.
2. This royalty rate would be low enough that the generic drugs are cheap--maybe 5 to 10% more than they would be if there was no patent.
3. This would make it harder for the patent owner to recover their costs over the life of the patent. We want them to recover their costs (and make enough to finance developing more drugs) so need to do something to counter this. We can do this by making the patent term longer for drug patents. Instead of 20 years, make it something like 50 years or 75 years or even 100 years.
We all win with this. The drug companies (as long as they are in it for the long haul) make money when they put in the effort to develop new drugs, but the patients get the drugs at an affordable price right away instead of waiting 20 years.
R&D is an incredibly risky proposition. The drug company I worked for had a success rate of 0.69%. That is, less than one drug that ever entered formal testing in animals, ever made it to market. Note, all the work done up to the point of testing it in animals is a tiny fraction of the overall cost of getting a drug approved.
So combine those two issues. You have an investment that requires huge amounts of capital, typically in the several hundred million dollar range (to get a drug approved). You also have a very low chance of a positive result. What does this mean when you are trying to raise capital? A very large pay out.
If you reduced the return on this investment by 80%+ (which is what you'd do if you added a 5 to 10% royalty to the current generic prices), you'd have all that capital moving to investments with much better risk/return profiles.
I don't have the source available, but I remember reading that of the drug that are approved, only 1/3 of them actually ever make a profit for the company overall. It's the massive blockbusters like Lipitor that not only pay for all the R&D that failed, but also all those drugs that didn't fail, but didn't even break even.
It actually sounds like you are saying that drugs are NOT that expensive to develop. The high failure stage is cheap ("tiny fraction of the cost"), bringing it to market is expensive but this happens once efficacy and safety are more certain?
This would be quite a common misunderstanding, and imply that we should focus on reducing these latter-stage costs rather than treating drugs as a special case that really need patents. Can you elaborate?
I should clarify. The costs of getting a drug into animal testing are relatively low (in the millions of dollars), however, the failure rate beyond that stage is still very high (~90% failure rate) as are the costs.
You are correct in saying that efforts to reduce the costs of failure are paramount to R&D companies. In fact it is a huge focus right now. However, the requirements for approval are growing in size, so it's somewhat of a one-step forward, two-steps back deal.
Thanks for the clarification (and no thanks for the utterly bizarre downvote, whoever that was - wtf?).
Based on your experience, is it the companies themselves who can get these later costs down, or is it entirely dependent on outside parties (regulators - only reduceable by lobbying)?
In the context of the patent debate, it would make more sense for government to grant monopolies/patents where its own policies introduce the costs. Even if these costs do not decrease, because of e.g. public safety, this may actually be quite a nice criterion for things that should get protection.
Right now what is happening is that companies are shifting their R&D efforts towards diseases that have relatively low regulatory barriers. The best example is the shift out of diseases like diabetes (treatments are relatively effective, so safety standards are very high) into diseases like cancer (where treatment options are poor and safety standards are relatively low because patients die so quickly).
In the future I think it will be a combination of new technologies that allow drug makers to prove efficacy and safety in a more cost effective way. I also think regulators will soften their hard-line stance on safety (in some areas). The FDA has already started to do this. Instead of saying "that drug isn't proven safe" they are saying "that drug has been proven safe, but it helps a lot so maybe we'll allow the drug company to sell it to a few patients until we get more data".
The current drug patent system isn't the best way to incentivise R&D investment, but all the other options out there seem worse right now. You are correct, however, in saying that the costs associated with drug approval are often external to the company (the FDA). So when you pay $300/month for a new drug, a lot of what you're paying for is an assurance of efficacy and safety (and the gov't agency that assures it's done right).
What about creating a system of income-based drug pricing? If done correctly, this wouldn't even hurt profits... it would maximize them. And, everyone gets treated. Win/win.
Note that pharma companies already try to do this (because price discrimination does maximize profits), but they break pricing down by country. Countries with low per-capita income are charged less. But this neglects low-income people living in high per-capita income countries like the US; just because you live in the US does not mean you can afford the highest price. A pricing system based on individual incomes would solve this.
Furthermore, individualized pricing would help to limit the offshoring of jobs. Consider that an auto worker in the US has to pay the full US price for medication, but an auto worker in China only has to pay the price in China, which is undoubtedly lower. Therefore, the current system of nation-based pricing distorts economic incentives and unnecessarily encourages the offshoring of jobs. But a system of individual income-based pricing would correct this, and make US auto workers more competitive with their foreign competition.
Another thought would be to give the government the option to purchase drug patents from industry at some fixed multiplier of research costs and profits during the lifespan of the patent. That way if the public thought that it was truly in the public good for a drug to be available, people could campaign on the promise of purchasing certain patents.
I'm talking about more formalized than that. For example, suppose that we had a model that would typically return double what a drug would (modelling for inflation and opportunity cost), but that the pharmaceutical company was obligated to sell the patent at that price. Furthermore, suppose that this model was tweaked to generally return 20% more to the pharma company than holding the drug for the length of the patent.
Now the voting public could say that a drug was important enough that it should be funded via tax dollars.
You missed "clear property boundaries" as a difference. It's very easy to tell if a chemical compound is being used by two different firms, it's the equivalent of the source code being identical. But for software patents, there's much more subjectivity involved, e.g. does your patent cover this type of swiping, even if it doesn't in reality could you possibly convince a jury of ordinary people of that fact?.
This ambiguity is bad in itself. You might not like the chemical patent, but at least you'll know for certain whether you infringe it or not, which saves a lot of court battles.
Drugs are an interesting case as they have these factors going for it:
1) Expensive to bring IP to market. Lots of testing and clinical trials for drugs. For SW it is pretty cheap now.
2) Easy and cheap to copy. Generic versions can be reverse-engineered quickly. Probably just as easy to copy software, but I still feel like this is probably a useful pillar.
3) The IP by itself constitutes the majority of the value of the product. In medicine there isn't typically tons of other IP around that come together to form the product. In SW there is rarely a single piece of IP that is more than a small fraction of the value of the product.
4) The IP has longevity as a standalone product. Viagra can be sold for decades. Aspirin still probably does hundreds of millions in revenue. There is little SW IP that, by itself, has longevity. The nature of SW is to continuously improve it.
5) Time to market isn't a huge advantage. Since most medicine is just sold as effectively a commodity, being 6m ahead of your competition usually just means you have 6 extra months of revenue. Whereas in SW it also means that gives you 6 months to build on your current IP. In medicine you don't typically do Viagra 2.0, with a boatload of new IP that makes the original obsolete (and hence any competitors shipping the old version scrambling).