Yesterday President Bush announced his proposal for new pharmaceutical patent regulations. Bush's plan, like a Senate bill passed months ago, calls for better U.S. patent regulation of the pharmaceutical industry'though, for once, not regulation geared disproportionately to the advantage of major drug companies.
The function of the proposed regulations is basically to prevent major pharmaceutical empires from elbowing out generic drug manufacturers for too long. Under current law, drug companies have fallen into the deplorable habit of filing meaningless lawsuits and reapplying for new patents after superficial changes to the drug itself, all for the sake of preventing generic competition. The longer the company can stall, the more money they make off people that need their medicine and do not have access to cost-effective alternatives. The new regulations would make this practice less fruitful for drug companies by explicitly limiting the period of time in which a generic drug can be kept off the market because of a court challenge to a single 30-month stay, while disallowing a stay of any length for patents based on superficial changes.
The president predicted these two changes will save individual Americans billions without fundamentally changing U.S. patent law. Because generic drugs are vastly less expensive, if the regulations succeed in making more generic drugs available to the public they will save Americans, especially senior citizens, a great deal of money.
It is not perfect. It is first and foremost a blatant plea for the elderly vote and the Senate is way ahead of the president, having passed their own bill on the matter, but it is something. At the very least, Bush's identification of the problem'pharmaceutical companies use of U.S. patent law to unfairly restrain competition from generic manufacturers'is remarkably clear for a man whose party received approximately $17 million from the pharmaceutical lobby in the last election.
Pharmaceutical companies shamelessly defend their exorbitant drug prices with arguments around the same theme: Research and development is expensive. Innovating costs hundreds of millions and the sale of the drug needs to justify this expenditure. It is a business, after all.
Without a temporary monopoly on an innovative drug, there is no incentive for companies to research and develop drugs. This goes especially for the most desperately needed drugs that people need most cheaply. Why research AIDS or osteoporosis drugs, when drugs for male pattern balding or erectile dysfunction bring in the money? Even the poor must pay their exorbitant prices or the drug companies will, by the high and holy law of capitalism, only research and develop luxury drugs.
Of course pharmaceutical companies need large sums of money for research and development'but there is a fine line between eturning the seed to the source"" to sow new drug ideas and acting like a pack of greedy jerks. Numerous studies link the high cost of prescription drugs not to research and development costs as drug companies claim, but to marketing costs. In 2001, a survey of nine drug companies found that ""all but one spent more than twice as much on marketing, advertising and administration than they did on research and development."" The one exception only spent nearly twice as much. Another study conducted in the same year pointed out that massive tax breaks and credits bring the real cost of research and development down dramatically.
The fact is, drug companies can still make a killing under whatever tougher'or rather, less coddling'regulations come about. They could make a killing under much tighter regulations than Bush or the Senate are suggesting in their plans. They could probably even make a killing without hiring armies of lawyers and lobbyists to subvert the intended consequences of U.S. law. In any case, better regulation has the potential for saving Americans rather than just American corporations, billions of dollars at a time when many need it.
Now the only question that remains is whether or not Bush, in a further attempt to secure his image as a great and good crusader for the drug consumer, will extend this radical notion of fair intent to international patent law. This columnist isn't holding her breath.
