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Justinian Lane

More evidence that the tort system isn’t what’s keeping new drugs off the market

It's become popular in certain "reform" circles to argue that fear of lawsuits is what prevents pharmaceuticals from developing new drugs.  Pardon me, new "lifesaving" drugs; the argument always presumes the drugs purportedly not on the market because of the tort system are lifesaving.  They never want to consider the possibility that the tort system kept another Vioxx, or Trasylol, or other defective drug off the market.  But, I digress.

Michael Heller, law professor and author of the new book Gridlock Economy tells us that because of the patent system, a new drug to treat Alzheimer's disease isn't on the market:

Walk us through what you think is your most vivid example of this.

Here’s a life or death example that’s happening right now: A drug company executive tells me he may have a better Alzheimer’s treatment. But to get FDA approval and bring it to market, he has to license dozens and dozens of patents relevant to testing for safety and side effects. So negotiations fail and the Alzheimer’s drug sits on a shelf, even though my informant is confident it could save countless lives and earn billions of dollars.

Very few people or organizations are speaking out against this – against the underuse of property rights. Whom do you lobby for drugs that don’t yet exist or for cures that people can’t yet see? Gridlock, that is, resource underuse, is invisible in comparison with overuse – everyone can see the dramatic results of fisheries being depleted or air being polluted. But with wasteful underuse, the effects are almost always hidden. So when drugs, wireless services, DVDs, and runways go missing, we don’t really have champions ready to set it right. The flip side of gridlock is that it’s one of the great entrepreneurial and political opportunities of our era.

Well, I’d think that if a pharmaceutical company can’t get a drug made due to overly restrictive patent regulations, they’d certainly take this to Congress, right?

It’s interesting. One of the most lobbied bills in recent years is the Patent Reform Act, which has now been killed three times. On that bill, Big Pharma was on the side of protecting the current old-style patent laws, not reforming them. On the one hand, they’re concerned about the bringing forth the next drug, but they’re more concerned with protecting their existing patents, about fending off generics. It’s not a left/right issue. Both Orrin Hatch (R-UT) and Patrick Leahy (D-VT) are sponsoring the bill. There must be room to strike a deal: on the one hand, protect the interests of small inventors and ensure the ability of drugmakers to earn a profit; on the other let the rest of high-tech America fairly and efficiently assemble the resources needed for next-generation innovation.

Source: Law Blog - WSJ.com : Michael Heller and the Perils of Too Much Ownership

The fact that pharma will support legislation that keeps new "lifesaving drugs" from coming to market in order to protect existing revenue streams strongly suggests that pharma is more interested in protecting profits than patients, doesn't it?

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Posted at 11:46 AM, Jul 22, 2008 in Pharmaceuticals
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