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solutions will require creative thinking and eventual codification into law. Let’s focus our attention in two areas, patents and exclusivity agreements.
Patents, a cornerstone of technological advancement, give their holders the right to block others from practicing their inventions. Patent reform issues are a big concern in biopharma, where the industry is currently fighting to retain the ability to patent gene sequences, an effort opposed by many, including double helix co-discoverer James Watson. At least one industry critic insists that, “it is far from clear that we need any patents on medicines”. Patent concerns are not unique to those focused on drugs and diagnostics. Many people in the tech world are troubled by the use of patents as weapons of mass disruption. For example, both Google and Apple spent more money last year on buying patents and on patent lawsuits then they spent on R&D. There are also serious concerns about the rising costs associated with the legal actions of non-practicing entities, which are often derisively referred to as “patent trolls”. These costs detract from the ability of targeted companies to create new products.
There is a growing recognition that patent rules developed many years ago may simply be inadequate in a world of gene sequences and smart phones. The Australian Government recently announced plans to review its pharmaceutical patent system and will consider, among other things “new uses of known products”. A variety of intellectual property initiatives have been proposed in the tech world, from Twitter’s “Innovators Patent Agreement” to the idea of a “Defensive Patent License” to protect companies from the evil patent trolls who don’t invent things, but acquire patents and then sue or threaten to sue actual innovators for patent infringement. However, I am unaware of any proposed solutions in the biotech arena that would facilitate the commercialization of proteins covered by expired gene patents.
How would you go about resuscitating an expired patent? Should the original patent holder (or their assignee) be given preference in this process? Any solution should prevent deep-pocketed companies from buying up massive numbers of these patents, either to stack them on their own shelves, or simply to prevent others from using them. Perhaps auctioning off the patents would be a workable solution, though this would seriously disadvantage small biotechs at the expense of Big Pharma. The expired patents would have to be sold on an “as is” basis, without representation that they are valid, don’t infringe on other patents, and are immune to being challenged.
A second approach to protecting drugs from competition is to provide data exclusivity in drug applications. This approach currently grants protection of clinical test data that is developed by a company in the process of working up their drugs for eventual approval by the FDA. Competitors are specifically prohibited from submitting this information as part of their own FDA applications. They are required to run their own clinical trials and develop their own data set. Data exclusivity provisions in the U.S. are currently set at 5 years for small molecule drugs and 12 years for biologics (which are protein based medicines, like the ones being discussed here). Biopharma industry representatives are currently lobbying hard to make sure that 12-year data exclusivity provisions also become part of the Trans Pacific Partnership trade agreement that is being negotiated. Some public health care advocates worry that inclusion of such a clause will delay the introduction of biosimilars into the U.S. and thereby increase healthcare costs.
Data exclusivity provisions in the U.S. should apply to drugs created from molecules that have expired patents. The key question is: would drug makers attempt to revitalize a potential drug solely on the basis of the intellectual property protection provided by the data exclusivity provisions of the Affordable Care Act? Patents actually block competitors, whereas data exclusivity merely puts a roadblock in their path. Could other incentives be put in place to encourage biopharma firms to develop these older molecules into the medicines of tomorrow?
Resurrecting potentially useful (but never commercialized) proteins is distinct from another well-established process called drug repositioning, where biopharma companies look for new uses for older drugs. There are numerous examples of drugs that have been repurposed for new clinical indications. Perhaps the best known is Celgene’s thalidomide (Thalomid), which has been successfully used to treat both a complication of leprosy as well as multiple myeloma. This is the same drug that developed terrible notoriety in the 1960s for causing serious birth defects in the children of women who took it to combat morning sickness when they were pregnant.
A general solution that would encourage the development of molecules with expired patents would certainly help to foster medical advances and interventions. For example, the anti-inflammatory medicine oxyphenbutazone was patented and first marketed in the 1950s as a treatment for arthritis-like pain. More recently, however, this drug has been shown to sensitize drug resistant tuberculosis bacteria to other antimicrobial agents. Researchers have expressed doubts, however, that it will ever be tested in humans because drug companies couldn’t make any money on this off-patent drug. This argument, however, didn’t prevent doctors from demonstrating the effectiveness of using aspirin to treat a subset of individuals at high risk for developing colon cancer. It should come as no surprise that the NIH and foundations, not pharma companies, funded this latter trial.
It would most likely fall on the federal government to energize an alternative funding approach to test these older molecules in the clinic. This could be done in one of two ways. It could directly fund trials for some of these molecules. Given our nation’s massive debts and deficits, however, this approach doesn’t look too likely to be employed any time soon. The other possibility is to offer up incentives for effective treatments. Come up with a drug that is curative for drug resistant TB, for example, and earn a $3 billion reward for your efforts. No government payments would be required until and unless the treatment proves to be truly effective. I can envision investors funding companies that would compete for this (and similar) prizes; it would provide a third liquidation pathway for VCs besides acquisitions and IPOs. These large payments could turn out to be cost effective for the government. A cure for this and many other diseases could reduce, if not eliminate, the need to pay for costly treatments for Medicare and Medicaid patients. Non-profits might also be able to fund some of these clinical trials. They wouldn’t be bothered by the lack of financial return that will keep Big Pharma from focusing its attention on this area. However, the high cost of these trials will be a strong impediment for all but the best-funded organizations.
It’s a simple truth that patents on numerous proteins in the biopharma realm will expire before they reach clinical fruition. Smart scientists will eventually figure out which of these proteins may be useful as drugs, but their solutions may not be patentable. And without patent protection, many biopharma companies will simply avoid commercializing older molecules and technologies. Many complex issues will need to be resolved to facilitate this process, and making this happen won’t be easy. However, it’s time to start a dialog in the biopharmaceutical industry and work on coming up with creative solutions to this problem. We can then focus our attention on identifying and developing these biological diamonds in the rough.
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