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Social Contract On Drugs

By Jim Chen et al.

Each year at BIO, Ernst & Young offer a numerically intensive update of the biotechnology industry, rich in charts, tables, graphs, pie charts, and Venn diagrams. However, this year's update managed several moments of philosophy as well. The most interesting involved several panel members discussing the "social contract" between the public and the bio/pharmaceutical industry.

According to the panel, this contract involves public tolerance of relatively strong patent protection for truly innovative new drugs in return for these new drugs to be abundant and,...well,...truly innovative. Apparently each party to this bargain has increasingly been shirking its obligations to the other.

Apparently, rather than ensure consistent, predictable, and strong patent protection for new drugs, public distrust has led to pressure on both Congress, the United States Patent and Trademark Office ("USPTO"), and even the courts to diminish patent rights. Why would this happen? Well, simultaneously, the public has apparently begun to feel cheated by trivial improvements in patent drugs, such as time-release or newly formulated versions, rather than the development of radically new drugs.

Who is to blame? The panel called for the bio/pharmaceutical industry to start developing truly new drugs in return for stronger, more reliable patent protection. Rather than allowing drug development to languish, industry was asked to embrace true innovation. True innovation would then be rewarded with stronger patent protection.

Perhaps a period of confidence-building is in order to convince both parties to renew their social contract. Without reconciliation with consumers, bio/pharma may continue to suffer a surfeit of trivially new patent applications claiming variations on previously patented molecules, not to mention a retreat to traditional therapeutic approaches, such as small molecules or monoclonal antibodies, while consumers may try to punish the industry by supporting patent weakening disguised as patent reform.

Of course, there is a chicken/egg challenge in avoiding this spiral of blame. Which needs to come first: - (1) renewed vigor in patent protection, thus creating an incentive for more truly innovative drugs, or (2) redoubled efforts to develop truly innovative drugs, thus justifying stronger patent protection? It will be interesting to watch efforts to renew the social contract surrounding drugs. If unsuccessful, the biotechnology industry and consumers may continue to play their current game of patent chicken, to the detriment of both.

Full post as published by Biolaw Blog on June 19, 2008 (boomark / email).