Health Care Patents and The Interests of Patients

WHEC Practice Bulletin and Clinical Management Guidelines for healthcare providers. Educational grant provided by Women's Health and Education Center (WHEC)

Patent protection is intended to promote research and discovery and to act as a stimulus to progress in science and the useful arts. New technologies and the translation of research discoveries into clinical medicine are essential for improvements in patient care. The increasing commercialization of medical discoveries, however, may hamper the dissemination of new knowledge and the ability of physicians and patients to benefit from applications of this knowledge. The United States has occasionally been faced with potential public health problems relating to restrictive management of medication patents. As government-sanctioned monopoly, a drug patent allows its owner to prevent others from making, using, or selling a given medication for a set amount of time. Patents can also be used to inflate drug prices for consumers. The issues surrounding AIDS drugs illustrate the thorny balance between protecting the intellectual property rights of companies and the sometimes competing needs of patients. They also limit the ability of clinicians, patients, and researchers to obtain the right to use these discoveries commercially under reasonable conditions and at an affordable price. Furthermore, the issue of gene patenting poses unique challenges to knowledge development and academic collaboration because of gene sequence, unlike previous technical advances, is both a tool for pursuing scientific knowledge and the basis for any diagnostic or therapeutic application.

The purpose of this document is to discuss and evaluate the arguments on all sides and suggest a possible way out of the current impasse. Developing health technologies for the world's poor people increasingly requires the wise management of intellectual property (IP), and we hope this discussion treats IP as a strategic asset. It attempts to determine the ethical responsibility of the drug industry in making drugs available to the needy, while at the same time developing the parallel responsibilities of individuals, governments, and NGOs. We hope our forum helps to suggest the areas of future development of mutual interests (continuing medical education initiatives). Development needs the power of individual commitment, collective or national political will, and most importantly political action.

Patents that may affect the practice of medicine fall into 4 categories: 1) patents on medical and surgical procedures, 2) patents on surgical or diagnostic instruments, 3) patents on drugs, and 4) patents on genes and gene-based diagnostic or predictive tests. All of these types of patents raise ethical issues and may create conflicts of interest for physicians who contribute to the development of new products through research. Most of current therapeutics is based on private ownership of pharmaceutical discoveries, even if the origin of those therapies is based on publicly funded university-based research. Economic incentives for drug discovery and development clash with societal needs for low-cost pharmaceuticals in the United States and all over the world. Popular attention has focused on the skyrocketing health care costs in the United States and specifically on increasing insurance and prescription drug prices. Individuals and some local governments have advocated importing price-controlled prescription drugs from Canada to help ease the financial burden. What effects would this have on consumer prices, drug companies' incentives, and the development of new medications? In some circumstances, however, this ownership may jeopardize another widely regarded public good, namely the right of those who are ill to have access to life-saving medicine or other healthcare services. A stark choice arises if these two public goods are irreconcilable: when free enterprise and the freedom to live clash, which freedom will we limit?

Patent Issues in Drug Development:

The granting of patents to pharmaceutical companies for drugs that they have developed may appear to be relatively uncontroversial. Drug makers have successfully argued the need for patent protection to recoup the cost of their investment in drug research and to gain a profit before the makers of generic equivalent drugs are permitted to enter the market. Creating and protecting or attacking pharmaceutical patents requires close interaction between 2 groups of professionals, namely pharmaceutical scientists and lawyers. It also requires a good understanding of key concepts of each other's discipline. The division of labor can be summarized as "Scientists invent, Lawyers patent". However, these 2 groups do not communicate effectively because "...there is a general lack of understanding of each culture, and these interactions often lead to a cognitive friction that is both disturbing and costly to society". Patents on 65 drugs with weekly sales in the $2 to $10 million range expired in 2003. Loss of market share is estimated to be ~ 40% within the first year after patent expiration. In addition, the pharmaceutical pipeline is "drying up" (ie, fewer new drugs are entering the market). Therefore, when the patent on a drug expires, brand-name companies are increasingly seeking patent extension for the drug through innovative products such as clinically superior formulations of the drug (e.g., new drug delivery systems, controlled release and chemico-pharmacokinetics or side effect profiles, single isomer drugs, prodrugs). The U.S. Patent and Trademark Office (PTO) is guided by federal statutes, regulations, and case law in granting patents. Historically, physicians have taught and shared medical information without regarding this knowledge as trade secrets to be protected from others. The commercial potential of medical discoveries may motivate physicians to increase their own incomes in ways that may jeopardize the care of patients.

The Drug Price Competition and Patent Restoration Act of 1984 (popularly called the Hatch-Waxman Act, "Act") was an attempt to resolve 2 major issues: 1) regulatory delays in marketing of pharmaceutical products faced by innovator (also called pioneer or research) drug companies and 2) difficulties generic drug companies had at that time in marketing generic version of pioneer products following expiration of pertinent patent(s). In practical terms, this Act made the following 3 important provisions: 1) it provided for the extension of the term of one existing patent for innovator drugs; 2) it made provisions for the marketing of generic versions of patented drugs on the day after patent expiration; and 3) it provided opportunities to challenge the validity of patents issued to innovator drug companies. Economic issues, as with any industry, will clearly dominate the debate in the patent litigation area. The patent battles are therefore likely to intensify. The Hatch-Waxman Act was a small step in this direction. Pharmaceutical scientists knowledgeable of intellectual property issues can play a key role in hastening the development of such policies.

Consumers and their "friends" support policies that improve availability of low-cost pharmaceuticals that prolong life and improve quality of life here in the United States and abroad. But, many times, in the heat of emotion, an obvious and simple fact is forgotten: no "generics" are possible without first having "brand-name" (almost always patented) drugs. An economic analysis, examining the consequences of removing all patent protection, concluded that every $1 saved today by providing easy access to generics will in the future cost the consumer $3 in enhanced health-care costs owing to lack of incentives for pharmaceutical companies to get into the high-risk, high-cost business of drug discovery and development. The daunting task of all stakeholders is the continued development of patent policies that fairly balance the interests of competing interests of generic and brand-name companies.

Relationships with Industry:

Manufacturers of pharmaceuticals and medical devices assist physicians in the pursuit of their educational goals and objectives through financial support of various medical, research, and educational programs. Industrial development of products is important to continuing improvement in healthcare. Corporations are primarily responsible to their stockholders, while physicians are primarily responsible to their patients. The goals of corporations may conflict with physicians' duties to their patients. The public expects physicians to avoid conflicts of interest in decisions about patient care. Such decisions usually involve the direct treatment of patients. They also may involve physician participation in purchasing decisions by medical organizations, such as hospitals and group practices, to which physicians owe fiduciary responsibility. Different segments of society stand to benefit in different ways from healthcare providers' actions, and finding a proper balance can be challenging. Healthcare providers have a responsibility not only to their individual patients but also to society as a whole. These activities may include the organization, administration, and evaluation of the healthcare system; public health activities; consultation with and advice to community leaders, government officials, and members of the judiciary; or expert witness testimony.

The implications of industry support on medical education have been addressed as they affect post-graduate training and continuing medical education. In 2002, the Accreditation Council for Graduate Medical Education issued guidance for the more than 7,700 residency programs in the United States. The Accreditation Council for Continuing Medical Education (ACCME) has issued guidelines that address the support of educational programs and the provision of related awards, grants, and contracts. Pharmaceutical Research and Manufacturers of America (PhRMA) has developed guidelines for the pharmaceutical industry's relationship with clinicians and for conduct of clinical trials and communication of clinical results. These voluntary guidelines took effect on July 1, 2002, and October 1, 2002 respectively. In addition, guidance has been issued by the federal government. In 2003, the Office of Inspector General (OIG) at the Department of Health and Human Services issued a notice regarding voluntary compliance programs for pharmaceutical manufacturers. The OIG guidance references and voluntary PhRMA guidelines states "Although compliance with PhRMA Code will not protect a manufacturer as a matter of law under the anti-kickback statue, it will substantially reduce the risk of fraud and abuse and help demonstrate a good faith effort to comply with the applicable federal health care program requirements".

In summary; industry continues to provide substantial and valuable support for medical education. Healthcare providers' relationships with industry should be structured in a manner that will enhance, rather than detract from their obligations to their patients. When creating and implementing pharmaceutical manufacturers' compliance programs and principles at the institutions; the written policies and procedures regarding code of conduct and potential risks, including relationships with purchasers, physicians, and sales agents (ie, gifts, entertainment, personal compensation, education grants, and research funding) should be disclosed to patients and colleagues when material is published. We hope our recommendations contribute to this goal.

Societal Responsibilities and Right-to-Health-Care Arguments:

The notion of intellectual property is contentious. Because intellectual property is significantly different from other kinds of property, the ethical defenses of intellectual property differ from the defenses of other kind of property and traditions. The different parts of the world treat intellectual property differently. We start with The UN Declaration of Human Rights, Article 25, because the Declaration is widely accepted worldwide. It states " Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing, and medical care and necessary social services, and the right to security in the event of unemployment , sickness, disability, widowhood, old age, or other lack of livelihood in circumstances beyond his control." Although there are a number of different rights included in this sentence, for our purposes two are central. One is the right to health; the other is the right to medical or healthcare. It is an obligation of states or governments to see that medical care is available to their people, whether or not the governments actually provide it. In a developed society the structures are in place to handle the needs of people at the appropriate level. If a government is unable to handle the need or needs it faces for its citizens, it might appeal to the international community. Thus the rights to health and to healthcare impose correlative obligations on many parties. So far the obligations of pharmaceutical companies are no different from the obligations of other companies. But this is only part of the story.

There are limitations on the right to access, just as there are limitations on intellectual property rights. The right to access does not include the right to every treatment available regardless of cost, and the right to life has limits to the amount and kind of aid others are required to supply. Similarly, the right to adequate healthcare sets a minimum for such care to which one is morally entitled. That minimum is not and should not be equated with the maximum care available anywhere in the world. At some point even the richest societies may have to decide it cannot afford certain drugs. Given limited resources, if money spent on very expensive drugs can be more effectively spent on saving more lives if used differently, then the latter is a defensible course of action. In the United States payment for drugs, as well as for other aspects of healthcare, comes primarily from the third parties -- Medicare or private health insurance policies. The payment for the latter comes from employers or individuals or both; none of the parties have infinite amounts of money to spend; and money that goes to healthcare, including medicines, is taken from somewhere. If all life-saving drugs were exorbitantly priced, employers and individuals would have to make hard choices. If the result of healthcare providers not prescribing or of societies not buying medicines that are very expensive is that pharmaceutical companies have less incentive to develop new breakthroughs, that will be extremely expensive, that is arguably a decision a society may see as a less than optimal result, but overall one that it must choose as the lesser of two evils. Socially responsible action is usually praiseworthy and should be encouraged. But social responsibility is not the same as moral responsibility, although the two may overlap.

The United States Government funds billions of dollars worth of medical research, and it is appropriate that it does so because of its obligation to fulfill the rights of its citizens to health and to healthcare. In the United States the Orphan Drug Act has proven to be a successful marriage of government and pharmaceutical companies. The government provides tax incentives and guarantees seven years of exclusivity (after FDA approval) to encourage drug makers to develop drugs that affect fewer than 200,000 people and are generally unprofitable. The result has been, on the whole, positive, despite abuses. The U.S. Orphan Drug Act has been copied, with changes, by the EU, Australia, Japan, and other countries. In the EU, unlike in the U.S., if a drug is "extraordinarily profitable", after five years it loses its orphan drug status, which leads to an abuse, called "salami slicing". Nonetheless, whether one follows the U.S. version or some other, the basic concept has been successful in bringing needed drugs to market. Perhaps something comparable to this, an international orphan drug act can be agreed upon; perhaps governments can subsidize special research on the current World Health Organization list of essential drugs; perhaps companies agree to fund joint research for drugs that would not be covered by patents and would be produced and distributed at cost. The actual action taken should be the results of negotiations among all the interested and affected parties.

Continuing Medical Education Initiatives for the Globalized World:

A strong and vital health workforce is an investment in health for today and the future. The ultimate goal is a workforce that can guarantee universal access to health care to all citizens in every country. The country coordinating mechanism model has potential to encourage new and innovative alliances among partners in recipient countries, drawing on the active participation of civil society and the private sector. Such broad membership might help to improve the quality of funding proposals, increase information-sharing and trust between planners and healthcare workers and contribute to a strong sense of shared ownership. These initiatives strengthen and reflect high-level, sustained political involvement and can support the scale-up of programs within the health sector and across sectors. The focus should be building on, complement and coordinate with existing regional and nationals programs to create government / private / NGO partnerships. The ultimate decision about funding arrangements for continuing medical education activities must be the responsibility of the accredited sponsor. The use of information science and telecommunications to support the practice of medicine when distance separates the caregiver from the patient is the way forward to make medical care more affordable and more accessible in every country. Internet-classrooms have potential to manage knowledge; can create environment where knowledge flows easily and you get the knowledge you want -- reducing the chasm between what is known and what we do in health; the so called "know-do gap". Imagine what we could achieve if all of us knew what each of us knows. Where you have a common goal it is much easier to help one another to get there. In a world rich with resources and knowledge, closing the gap between unnecessary human suffering and the potential for good health is one of the foremost health challenges of our times.

Areas for Future Development:

  • There should be serious efforts to promote interdisciplinary educational programs in the area of pharmaceutical sciences and patent law. It is also hoped that training of future pharmaceutical scientist will include an effective dose of patent fundamentals. It will enable them to appreciate the strengths and weaknesses of individual patents, which is critical in developing strategies amidst the ongoing tug-of-war between brand-name and generic companies.
  • Physicians should feel obligated to provide advice to their patients about the most appropriate care, without being influenced by any profit they might gain through associated commercial ventures. Open communication of information gained from research and experience with medical and surgical procedures is essential if safety and efficacy are to be validated or refuted by colleagues. Scientific freedom of independent investigators (those not employed by the funding organization) should be preserved. Principle investigators should be involved in decisions regarding the publication of data from their trials. Investigators should control the use of their names in promotions. Project funding should not be contingent on results. Once a clinical investigator becomes involved in a research project for a company or knows that he or she might become involved, the investigator, as an individual, should not ethically buy or sell the company's stock until the involvement ends and the results of the research are published or otherwise disseminated to the public.
  • Eminent Domain: it was originally designed to facilitate public works projects, such as building roads or schools. The common law tradition, codified in the Fifth Amendment, lets "private property be taken for public use" by the government, as long as "just compensation" is provided. Even if not applied, governmental willingness to use such power could help move the country toward a more fairly balanced intellectual property policy by helping to prevent companies from exerting their patent rights even to the detriment of the public's health.
  • The need for a global fund for continuing medical education (a vision for the globalized world). With the turn of century, the global community has recognized that basic health is a prerequisite for sustainable development. It has profound effect on the citizens of the world and political, economic, social systems. Continuing medical education is beneficial to both donor and recipient countries and can engage public and private stakeholders towards common goals. Creating a global fund and partnership for continuing medical education has potential to increase resources to fight infectious diseases in developing countries and to direct those resources to areas of greatest need. Healthcare providers should support and participate in activities that enhance the community. Care rendered to an individual patient does not take place in a vacuum but rather within a community. Decisions made in one sphere affect those in the other.
  • In a free enterprise system governments do not engage directly in production of essential medicines, although they can encourage and promote production through their system of intellectual property protection and their tax system, among others. To the extent that the pharmaceutical industry fails to produce the needed medicines, it is up to governments to ensure that they are produced. Development of international orphan drug plan has potential to increase access of needed drugs, and in the process to help serve the common good.

Editor's Note:

The first step in any solution, however, is to recognize the obligation. Discussions of intellectual property are very complex and involve knowledge of convoluted laws, legal decisions, economic and business analyses. Typically, at any negotiation involving intellectual property prior to the drafting of legislation, the parties are government officials, lawyers, and corporate representatives. Thus the best defense of the policies is given not in ethical but in legal and economic terms. To some extent the gap represents a tension within the pharmaceutical industry. The tension comes from the fact that on one hand the pharmaceutical industry is part of the healthcare industry, and so has as its primary aim the health of people, which is morally praiseworthy aim; and yet on the other hand the industry can achieve this aim only if it makes a profit, which becomes its driving concern. The industry almost systematically refuses to speak in moral terms because that possibly opens the floodgates to demands it feels it cannot meet or to arguments it cannot persuasively answer, while it can and has defended its policies in economic and legal terms.

With this background, we can now ask: what are the obligations, from an ethical point of view, of the pharmaceutical industry as a whole and of individual pharmaceutical companies? Can we come up with general obligations that stem from the rights of those in need of medical care? Clearly, pharmaceutical companies are not the only health care providers and the entire obligation to fulfill the rights in question does not fall on them. And clearly if they have special obligations, that does not mean that governments, individuals, families, NGOs, and so on do not also have obligations. Intellectual property rights deserve enough protection to promote the common good. Existing structures are under great strain because the system is failing to do this. The structures also do not give enough scope to other rights claims that may in some cases override intellectual property rights, especially with respect to essential drugs.

Intellectual Property (IP) is almost always a result of a long history of scientific or technological development and numbers of networks of creativity, not the act of a single person or a group of people at one moment in time. Thus, thinking about and evaluating IP requires, thinking about IP as shared rights. A network approach to IP challenges a traditional model of IP. It follows that the owner of those rights has some obligations to share that information or its outcomes. The language of ethics is not as ambiguous as the language of social responsibility. The question of access to any medicines is a pressing need. Although governments have the responsibility to enable or provide access, it is beyond the ability of many of them to do so.

Suggested Reading:

  1. World Health Organization
    Commission on Intellectual Property Rights, Innovation and Public Health (CIPIH)
  2. The Global Fund
    To fight AIDS, Tuberculosis and Malaria
  3. The Orphan Drug Act
    Health Care and Intellectual Property: The Orphan Drug Act
  4. Federal Trade Commission
    To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy (requires Adobe Reader)
  5. United States Patent and Trademark Office
    General information concerning patents

© Women's Health and Education Center (WHEC)