Are patents/IP good for innovation?

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Re: Are patents/IP good for innovation?

Postby ucim » Sat Feb 24, 2018 4:04 am UTC

Pfhorrest wrote:Maybe medical research should be done in a publicly funded academic setting for the betterment of mankind and not be beholden to the whims of the market?
Can you imagine that happening in the current administration?

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Re: Are patents/IP good for innovation?

Postby Thesh » Sat Feb 24, 2018 4:07 am UTC

qetzal wrote:Inventions are free could work fine in some fields. Especially where the inventor can commercialize the invention rapidly and benefit for a period of time just based on his head start over orhers.

But what do you think it would do in fields where there’s a huge lag between invention and commercialization? Do you think drug companies will spend hundreds of millions to prove a drug works, if the moment they do so some competitor can make the same drug and take away the market?



Think crowdsourcing. The people who are eventually going to be using/selling the drug have incentive to fund it directly (if they don't fund it, they can't use it or sell it in the first place). Copyrights and patents only seem necessary if you try and view everything from the perspective of a single investor who is only motivated by the desire to increase their wealth.
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Re: Are patents/IP good for innovation?

Postby qetzal » Sat Feb 24, 2018 4:23 am UTC

The people who are going to be selling a potential new drug already fund its development. That’s just pharma.

I admit I’m not aware of many/any cases where potential users have funded drug development. At least, not sufficiently to get a drug approved and marketed. But I think that’s pretty unsurprising.

And again, in principle, nothing stops people from doing such crowdsourcing now, but it doesn’t happen. That’s fairly telling, don’t you think?

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Re: Are patents/IP good for innovation?

Postby Thesh » Sat Feb 24, 2018 4:36 am UTC

That's mostly because of the wealth inequality and the patents themselves - it's only recently that the internet had enabled us to actually organize enough people with the wealth to actually fund development themselves, and because we have patents the pharmaceutical companies can get richer by patenting their products. In capitalism, the economy is structured to make us depend on the wealthy, and since we depend on them we rely on them, and since we rely on them we aren't in the habit of doing things for ourselves.
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Re: Are patents/IP good for innovation?

Postby qetzal » Sat Feb 24, 2018 4:59 am UTC

I don’t buy that. Nothing stops a crowdsourced group from discovering and patenting their own drugs. And if they did so, the patent would give them legal protection against any unscrupulous pharmas that might try to steal their invention. Plus, if it was as straightforward as you suggest, they’d also get to charge others for the drug and use the profits to discover more drugs. Pretty much like a pharma does.

I can think of other barriers that a crowdsourced group would face, but that one doesn’t seem realistic to me.

Have you considered the possibility that one big reason drugs don’t get commercialized by crowdsourcing is because it’s really hard and expensive to do? Do you seriously think you could crowdsource $100M+ for 10y or so? Cause that’s on the low end of what it takes.

Now, if you also want to seriously relax the standards for drug approval, that could make it more feasible.

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Re: Are patents/IP good for innovation?

Postby Thesh » Sat Feb 24, 2018 5:16 am UTC

It's not just the consumers, but the producers, distributors, pharmacies, and insurance companies who all stand to profit from the increased business. Take away the patents, and they would still seek to fund new drugs - for a single pharmacy, it might be worth it to spend $1000 here or there, for a producer it might be a lot more. End the wealth inequality, and there is even more potential to fund it.
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Re: Are patents/IP good for innovation?

Postby Leovan » Sat Feb 24, 2018 7:40 am UTC

Information is free, thanks to patents. Everyone can freely access them to see how a thing is done. You can learn from it as much as you'd like. What you're getting when you licence a patent is the right to profit from that information. And what you're paying for is the services of the inventor. The inventor spent the time, and money, and got the education necessary to make the invention. You're reimbursing him or her for that.
Thinking patents and information in general should be free is eliminating the jobs of everyone who lives off of the creation or compilation of information. Such as journalists, authors, engineers, software developer, musicians, statisticians, artists etc. And doing their work for the betterment of humanity doesn't feed their families.

Also, we have plenty of crowd funding for medicines. Lots of fundraisers for MS, cancer, AIDS research etc.

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Re: Are patents/IP good for innovation?

Postby qetzal » Sat Feb 24, 2018 2:22 pm UTC

Thesh wrote:Take away the patents, and they would still seek to fund new drugs.


Do you really think people will come together and pool their resources to the tune of several hundred million dollars over a 10 year period, to get a single drug approved, knowing that IF they’re successful, someone else can sell the same drug and they end up with a huge financial loss?

Leovan is right that there is a lot of charitable funding for drug research. But I’ve never seen anything that comes anywhere close to the level of funding and committment that’s needed to actually commercialize a drug. And that’s under the current system, where patents would allow them to profit from that committment.

Eliminating that incentive by eliminating patents doesn’t seem likely to make that more common.

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Re: Are patents/IP good for innovation?

Postby Thesh » Sat Feb 24, 2018 3:05 pm UTC

Do you really think $100m is a lot of money on a planet with 7 billion people? Do you really think people don't have a desire to act in their own best interest, and that only some wealthy person driven solely by greed and the possibility of a monopoly has an incentive to innovate?

It doesn't matter what you've seen. Our economy is highly inefficient, and wealth inequality makes everyone less capable of acting in their own interests. Patents, copyright, and the centralization of wealth are why our economy is so inefficient.
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Re: Are patents/IP good for innovation?

Postby ucim » Sat Feb 24, 2018 3:14 pm UTC

Thesh wrote:Do you really think $100m is a lot of money on a planet with 7 billion people?
Yeah, it is. Especially when every one of those people are being called upon to give money to so many other causes. It's not like this one drug that might be effective and could be developed in maybe ten years or so, and perhaps would get approved is the only thing on the minds of the people that could need it in the future.

Yeah, it's a lot of money.

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Re: Are patents/IP good for innovation?

Postby CorruptUser » Sat Feb 24, 2018 3:31 pm UTC

ucim wrote:
CorruptUser wrote:I think you are splitting hairs here. I'm not suggesting that the pills available at cost in the Congo should be the basis, just the pills in developed countries.
Yes, that was what you were suggesting. You did not restrict it to developed countries - but even so, who shall keep the list of "developed" vs "developing" countries, and how do you want to manage the binary assignment of what is a vast grey area?

Jose


Admittedly, it's a tough question as to where to draw the line. I'd say it's whenever a country is at least at 50% GDP/Capita as the US, or possibly any country that has a free trade agreement with the US.

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Re: Are patents/IP good for innovation?

Postby ucim » Sat Feb 24, 2018 3:49 pm UTC

CorruptUser wrote:Admittedly, it's a tough question as to where to draw the line. I'd say it's whenever a country is at least at 50% GDP/Capita as the US, or possibly any country that has a free trade agreement with the US.
How about ramping it up gradually, rather than having a binary divide?

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Re: Are patents/IP good for innovation?

Postby CorruptUser » Sat Feb 24, 2018 3:52 pm UTC

Can we at least agree on the principle first?

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Re: Are patents/IP good for innovation?

Postby ucim » Sat Feb 24, 2018 4:08 pm UTC

CorruptUser wrote:Can we at least agree on the principle first?
Which principle? The question is whether or not the wealthy ought to pay more for a drug that is extremely expensive to develop, but cheap to manufacture, or whether the cost should be the same for all. We've just agreed that the cost should not be the same for all, the question remaining is how to most "fairly" allocate the difference.

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Re: Are patents/IP good for innovation?

Postby CorruptUser » Sat Feb 24, 2018 4:17 pm UTC

The principle that the drug companies shouldn't be able to charge exhorbitantly more to the US than to other countries of similar wealth.

And honestly, I don't think the prices should be different for different people, but that's something else. Price discrimination is weird for me. I'm opposed to unfairly discriminatory pricing such as senior/student discounts, which are nothing more than blatant "these people have less money, let's charge everyone more and them less". To me, that's no different than saying "black people have less money, let's have a black discount". I'm in favor of other indirect forms of price discrimination like coupons or times; if you want to spend the time to go through the penny saver to get all your canned goods half off, be my guest, even if it only exists to charge poor people less, or the early bird special which exists to give the elderly lower prices.

When it comes to IP, a movie theatre will absolutely charge different prices in different parts of the world; your average Chilean isn't going to pay $15 to see a movie, while a New Yorker would, but if the New Yorker absolutely must see the movie for $1, they are free to take a plane to Chile to do so. (Ok I don't know what movie tickets cost in Chile). With drugs, an American isn't allowed to go to France to buy prescription drugs; the drug companies make it very clear that the lower prices that other countries get will end if they sell to foreigners, or that they will only provide exactly what the locals need and not a single pill more. THAT is what irks me to no end.

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Re: Are patents/IP good for innovation?

Postby ucim » Sat Feb 24, 2018 5:01 pm UTC

Well, "exorbitantly" is an emotionally charged weasel word. There may be a huge difference in price, but there is also a huge difference between the cost of the first pill and the cost of the second one, and there's a huge difference between the wealthy and the poor (people and countries). To not take this into account is heartless (in the latter case) and poor business (in the former case).

CorruptUser wrote:Price discrimination is weird for me...
Yeah, I hear you. But situations are different, and differences matter. Whatever you do for a living, do you cut a break for family if they need your services, or do you charge them full price? Do you ever volunteer your professional services? Do you give your time or money to charity or Good Causes? Have you ever been on the receiving end of a "better deal"?

The economic costs of serving the poor are different from the costs of serving the rich. Rents are lower, the customers tend to be less discriminating, there is less discretionary income to go around; it makes business sense to charge the poor less. OTOH, some costs are higher, risks are higher, and it makes business sense to charge the poor more in some cases (such as loans). Sux to be poor.

There are also externalities to balance and contend with; the whole idea of public education is a giant externality. Public transportation (from city busses to airports) is made up of externalities; so is public health. We all benefit when other people are healthy, educated, and mobile.

And for this reason some pricing discrimination makes sense to me.

Of course, any system can be gamed. I don't like that aspect, but there's no escaping it. But I'm thankful that I live in a situation where I don't have to be the recipient of the public largesse; this makes it easier to pay for others who do need it.

BTW, drugs are not the only things that are restricted abroad - the entire grey market is made up of this.

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Re: Are patents/IP good for innovation?

Postby CorruptUser » Sat Feb 24, 2018 5:18 pm UTC

ucim wrote:Well, "exorbitantly" is an emotionally charged weasel word. There may be a huge difference in price, but there is also a huge difference between the cost of the first pill and the cost of the second one, and there's a huge difference between the wealthy and the poor (people and countries). To not take this into account is heartless (in the latter case) and poor business (in the former case).


Weasel world? Sovaldi costs 84-168 THOUSAND AMERICAN DOLLARS for a treatment. If a new home, for a drug that costs more to ship than to manufacture, that was created just as much through public research grants as from private research, costing that much while only costing half as much in Canada and 1/50th as much in India isn't worthy of the word "exorbitant", I don't know what is.


As for the rest of the grey market, I feel similarly about things like movies and video games and other IP being not only priced differently throughout the world but illegal to sell in some parts in order to maintain that price differential. If an Aussie wants to order a dvd from the US and have it shipped to Sydney rather than buy it for double the price in a Sydney store, that shouldn't be restricted.

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Re: Are patents/IP good for innovation?

Postby elasto » Sat Feb 24, 2018 7:23 pm UTC

Saw this and it seemed tangentially related to your grey market commentary.

Basically, it's an app in Greece that lets people return their leftover medications to a pharmacy which checks them then gives them away free to the poor.

It's estimated that $5Bn worth of medications are just binned in the US, so, theoretically it could represent useful savings for the healthcare system - but, presumably if such an app took hold big pharma would just raise prices to balance the books following the reduction in sales.

Like a citizen's wage it's one of those things that works on a small scale but it's hard to see if anything's gained overall if adopted universally.

Also, following on from your comment that the drugs cost more to ship than to manufacture, there's some absurdity with the logistical expense (and safety concerns!) of recycling drugs when they cost only fractions of a penny to make to begin with...

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Re: Are patents/IP good for innovation?

Postby qetzal » Sat Feb 24, 2018 9:27 pm UTC

Sovaldi is a pretty unusual case, in both good and bad ways. Probably not appropriate to revise an entire system based on real or perceived injustices in edge cases.

FWIW, however, the reason it’s so much cheaper in India is because they apparently couldn’t get it patented there. Some may consider that a good thing. But if it couldn’t have been patented in the US, it very likely would never have been developed at all.

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Re: Are patents/IP good for innovation?

Postby CorruptUser » Sat Feb 24, 2018 11:48 pm UTC

Sovaldi is NOT unusual. Ever hear of Humira? It's $50k per year in the US, and unlike Sovaldi, it's a treatment rather than a cure; i.e., the pharmacy will keep raking in that money every single year. In the UK? Half that. And in India it's currently 1/20th that, but that's more due to biosimilars (generics) being available there but not in the US due quirks in the legal system.

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Re: Are patents/IP good for innovation?

Postby qetzal » Sun Feb 25, 2018 12:15 am UTC

Sovaldi is unusual because for most, it’s a cure for a disease that has a high mortality rate. So it’s at least arguably worth the high price. After all, isn’t an extra 10 or 20 years of life worth $150K?

Humira is a much better example, because as you say, it’s not a curr, just a treatment, yet stil has a very high price tag. But here’s the thing. Without patents and the opportunity to charge high prices during the patent life, Humira wouldn’t exist. Or more specifically, it wouldn’t exist as a marketed drug in the US.

As for biosimilars, I agree that’s an issue that teally needs to be addressed.

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Re: Are patents/IP good for innovation?

Postby CorruptUser » Sun Feb 25, 2018 12:22 am UTC

It's a cure, and it shouldn't bother me too much that Sovaldi is so damned expensive, especially when it's dirt cheap compared to a liver transplant. But to charge Americans more than someone Switzerland, only for them to turn around and laugh at us for paying so much? Yeah, no, that's a ripoff.

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Re: Are patents/IP good for innovation?

Postby qetzal » Sun Feb 25, 2018 4:04 am UTC

I get that. When it comes to costs, the US healthcare system is ridiculous.

But I don’t see how that’s related to patents. Especially since every other developed nation (including Switzerland) has a virtually identical patent system as the US.

Unless the inventors of Sovaldi chose not to pursue a patent in Switzerland?

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Re: Are patents/IP good for innovation?

Postby CorruptUser » Sun Feb 25, 2018 4:36 am UTC

They did, but in Europe Gilead negotiates with the country as a whole rather than just setting whatever price they feel like. So if France says to Gilead, "either you sell it to us for $10k or not at all", Gilead goes back and forth, and eventually hashes out an agreement that says they will provide France with only 10,000 doses at $30k each, that may not be re-sold to non-citizens. Having some sort of giant system capable of doing that, i.e. universal healthcare, is a huge overhaul that basically used up every last scrap of political capital Obama had to create a not-universal health system. Modifying IP patents to automatically give the creator automatic massive revenue while removing their ability to excessively price gouge the US is not nearly so huge a overhaul.

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Re: Are patents/IP good for innovation?

Postby qetzal » Sun Feb 25, 2018 5:14 pm UTC

CorruptUser wrote:Modifying IP patents to automatically give the creator automatic massive revenue while removing their ability to excessively price gouge the US is not nearly so huge a overhaul.


Mybe so, but it’s far from obvious to me how you could do that successfully.

I think it would be easier to work on allowing US Medicare to negotiate the prices they’ll pay for drugs. That wouldn’t prevent pharma from trying to charge more to private insurance, but it would make it politically difficult to do so. I think the effect would be close to having national pruce negotiation, just like in EU.

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Re: Are patents/IP good for innovation?

Postby elasto » Sun Feb 25, 2018 9:17 pm UTC

CorruptUser wrote:They did, but in Europe Gilead negotiates with the country as a whole rather than just setting whatever price they feel like. So if France says to Gilead, "either you sell it to us for $10k or not at all", Gilead goes back and forth, and eventually hashes out an agreement that says they will provide France with only 10,000 doses at $30k each, that may not be re-sold to non-citizens.

To play devil's advocate (since I agree that the European single-payer model is superior to the US version), there is the occasional political fallout when both sides refuse to budge and the UK NHS refuses to purchase a medicine because it is not deemed value for money. It leads to accusations of a 'two tier medical system' when certain cutting edge medicines are available privately but not publicly, so there are definitely still political trade-offs.

The messy compromise seems to be that the UK will play hardball and refuse to purchase medicines that they deem overpriced, but if there's too much of an outcry in the newspapers over something or other, then the government will 'save the day' by adding extra money in the pot ring-fenced for just that one drug, allowing the NHS to otherwise stick to their guns.

Overall it does allow our money to go much further while, at worst, only being a few years behind the absolute cutting edge of medical research - and usually bang up to date at a fraction of the price.

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Re: Are patents/IP good for innovation?

Postby LaserGuy » Mon Feb 26, 2018 9:04 pm UTC

Thesh wrote:Do you really think $100m is a lot of money on a planet with 7 billion people? Do you really think people don't have a desire to act in their own best interest, and that only some wealthy person driven solely by greed and the possibility of a monopoly has an incentive to innovate?


That's $100m per drug, per year, with maybe 10% chance of success at the end of it. Drug development is ridiculously expensive.

Thesh wrote:It doesn't matter what you've seen. Our economy is highly inefficient, and wealth inequality makes everyone less capable of acting in their own interests. Patents, copyright, and the centralization of wealth are why our economy is so inefficient.


I think the problem is that, for a given drug, the expectation value for actually getting a decent return in terms of quality of life for you or yours, is actually very low unless you're already afflicted with the condition the drug is meant to treat, or, for whatever reason, the likelihood of you getting that condition is particularly high for you. It certainly is in everyone's bests interests to do medical research and develop new treatments, but at the individual level the benefits are very diffuse and the time delay is very severe. And certain conditions, particularly ones that are rare, lethal, or difficult to diagnose, are going to be chronically underfunded. If you're going to go this route, it makes much more sense to fund R&D through the tax system rather than through private donations.

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Re: Are patents/IP good for innovation?

Postby pogrmman » Thu Mar 01, 2018 4:40 am UTC

LaserGuy wrote:I think the problem is that, for a given drug, the expectation value for actually getting a decent return in terms of quality of life for you or yours, is actually very low unless you're already afflicted with the condition the drug is meant to treat, or, for whatever reason, the likelihood of you getting that condition is particularly high for you. It certainly is in everyone's bests interests to do medical research and develop new treatments, but at the individual level the benefits are very diffuse and the time delay is very severe. And certain conditions, particularly ones that are rare, lethal, or difficult to diagnose, are going to be chronically underfunded. If you're going to go this route, it makes much more sense to fund R&D through the tax system rather than through private donations.


I think that certain rare conditions would end up underfunded even by taxes. Naturally, most drug R&D money is going to go to things that afflict a larger number of people (even if it’s something being designed completely altruistically — ie. not for profit motives). It does make a lot more sense to fund drug development through tax than private donations/investments, but it’s still pretty severely hampered by its difficulty. Not only do you have to identify potential drug candidates, you need to show that they work, you need to show that they won’t be horrible for the patient, you need to figure out how to synthesize them on a decent scale, and you need to figure out how to deliver it to where it needs to go. Every one of those steps is really difficult, and, thus, expensive.

IMO, this is why investment (either equity or liabilities) isn’t great for funding drug R&D. The investors aren’t going to invest in something that won’t make money — hence the development of things like statins and opioids that aren’t cures. Ideally, taxes and donations would be enough to fund R&D, but I doubt that’ll ever be the case. I don’t really see a way out of having companies that make expensive treatments. If that has to be the case, in the best scenario, they’d use the money raised by those to fund actual cures for stuff. I’d love to go into drug design because it’d help people, but it would be kind of soul crushing to help develop something that works and have a company charge obscene amounts for it.

TL;DR: I don’t think IP laws are the problem with drugs — it’s the way drug R&D is funded that is.


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