Regulation and Patents
Medical innovation is a worldwide multibillion dollar industry which operates on two axels; humanitarian advancement and profit. Though the former evokes a more emotional response in the masses, it is the latter which stimulates the industry to push the boundaries of medical capability. Rebecca Eisenberg, a scholar in biomedical research, develops an interesting dimension regarding the intellectual and regulatory protection which governs innovation of this industry. Eisenberg delves into the allegedly black and white nature of patents and drug regulation in the US to reveal the actual inverted roles these two market interventions play. This essay explains the new world of medical intellectual property and how it has evolved while also identifying future implications
Intellectual property protection is the mechanism which has placed financial value on successful medical innovation promoting further innovation by ensuring payoffs for successful development. Historically, medical innovation has been a business highly sensitive to intellectual patent protection; new products are patented promptly this is to ensure the best possible chance of recouping high development costs associated with drug development. Expensive research and development of new chemical compounds and costly medical trials coupled with the large quantity of failed drugs ensure the biomedical innovation industry is one with staggering costs. Due to these outstanding costs it is imperative in regard to innovation, and particularly medical innovation, there is a need for market intervention to ensure post development profits are high enough to entice further medical innovation. Though intellectual property protection is sometimes disputed as a market inefficiency, through creating a market educed monopoly, a lack of financial payoff may stunt the level of medical advancement hence hindering patients from receiving the best medical care possible available. In regard to instrument of protection patents have been deemed most suitable for medical innovation protection. Patents involve short but intense protection giving medical corporations the opportunity to reap the rewards of their discoveries’ by having monopoly power while ensuring the patented product will be quickly available for use by other drug companies and for a much lower price once protection expires. Moreover the enabling of patent protection has facilitate and even promoted private investment in the medical field, Eisenberg in her seminar points out that regardless of the accelerating budget of the US National Institute of Health (NIH) private sector spending has still managed to surpass this substantially suggesting the industry has been made extremely profitable.
Despite this inherent demand for patents in medical innovation Eisenberg in her seminar discusses a new approach to intellectual property protection in the medical field with implications proving that patents are not purely a form benefit for budding innovators. Though patents have historically been an instrument to encourage financial reward for innovation and development it seems to be the sheer bulk of patents have lead to a new discourse where patents subsequently offer more of a cost or a “sift” of profits. This analysis relates to the concept of a patent thicket; a web of patents which must be overcome for a new innovation to emerge. The result of such a patent thicket is a reduction in profits due to increased costs of bypassing existing patents and as mentioned above the “siphon effect” in which the profits from new innovation are dwindled away by a series of previously established patents which claim credit for enabling the discovery and development of the new innovation. Although this recently realised cost of patent has been discovered there has been no reduction in patent protection but rather an increasing acceleration of patent issue as more innovators endeavour to siphon profits from more significant innovations. This increasing medical modernization business is growing along with patents into an industry of its own opening up an entire new scope for patents to thrive through research and development innovations and diagnostic tools. This new world of intellectual protection in the medical field has thus evoked fresh avenues for incentives related to innovation in the form of medical regulation in order to facilitate and promote new innovation.
This contradicting argument about the role and actual effects of intellectual property protection ensue that other forces must be interacting to produce the highly profitable and thriving medical innovation industry that is currently apparent in the US. Beyond the seemingly ambiguous nature that has encapsulated the patent circuit lies the second influential driving force of the medical innovation industry: drug regulation. Drug regulation by the Food and Drug Administration (FDA) was initially created as a firewall for consumers to ensure all drugs and medical products are safe for consumption and use. However, in recent years this primary occupation has been shaded by seemingly economic protectionist regulations to promote profit among investors rather than consumer protection. Such examples of this include the FDA offering ‘exclusivity’ offering 5 years exclusivity protection for the development of new chemical entities, 3 years exclusivity protection for product changes that require clinical trials and six months exclusivity protection for performing paediatric trials (effective or not). Moreover in regard to arbitrage, a major concern for budding innovators, it is the FDA which offer most comprehensive protection while patent protection across borders maybe vague the FDA has more stringent control restricting importation of many drugs. Through the cases motioned above the FDA has been able to create monopoly power for innovating firms in the US and has taken on the role of market regulator rather than its original responsibility to protect the medical health and safety of consumers. Though the FDA’s increased economic protection for medical innovators may not impede on the health of consumers it blurs the distinction between what regulation is in place for health and safety as opposed to economic market intervention.
To conclude, the world of intellectual property protection and regulation have numerous forces acting in different ways to produce substantive outcomes, particularly in the market of medical innovation, these forces are under scrutiny due to the poignant nature that is the health field. The role of patent protection is no longer the black and white issue once thought while the role of regulation has also taken a new stance regarding the market stakes of medical innovation.
