Patent Lawyer Gives her Opinion

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1

Hello everyone, I don't come on the forums much, but today I had the opportunity to talk with a Patent Lawyer at a Biotech firm, and I want to share my experience and see if anyone else had some rebuttals or responses to it. 

While I was at the firm, I had a chance to tour the facilities, during which I walked all around a massive building sporting million dollar bio-technology machinery and over 100+ scientists, chemists, and doctors. The sheer amount of brain power in this one firm was astonishing, but it surprised me when the project manager explained to me how the entire firm, after 10+ years of work, had only released one product. This product, which will remain nameless to spare the company is a life-saving drug that is injected to prevent the sudden onset of potentially fatal symptoms of a very rare hereditary disease affecting less than 6000 people in the US. This drug, took over 800 million dollars to produce, which sounds ridiculous, but if you look at the average amount of money needed to release a new drug (1.2 billion) it seems less outrageous. For over 10 years, 100+ people spent their waking lives pushing the boundaries of their respective fields, cloning and refining cells that are able to create the protein from which this drug is derived. That means that this company went profitless for over 10 years. They were only able to keep up their facilities and research by leasing out their skills to other companies and by convincing capital investors to invest millions of dollars in their company. All this work culminated to a drug that costs $10,000 a dose.

Before you attack the pharma industry because of the prices of this drug, please consider that almost every single dollar of every dose of this medicine is covered by insurance, so most patients don't pay out of pocket. And for those that have co-pay, the biotech firm pays the copay in full for them, just so they can have access to the drug.

With all this in mind, I was able to talk to the patent lawyer for this company, who is in charge of making sure that the companies patents are not infringed on by other pharmas or companies that make bio-similiars. I asked her this one question "How can you, with a right mind, sue other companies that try and create this drug for cheap, knowing that it costs $10k a dose?"

With all the information in mind, I think you know what her answer was. With over 800M invested, she fights to make sure that this money is made up. The drug has been on the market for almost 2 years now, but the company doesn't expect to see a profit for another 2 years. To me, this seems like the system is working fine. "The advancement of medicine" is not being impeded, because the patent system gives companies an incentive to work towards something without fearing their idea being stolen. If anything, this encourages creativity because companies are more willing to work on newer and better drugs for profits instead of trying to make it big modifying others drugs.

Now, what does this have to do with technology? This is a tech forum after all. Well, the way I see it, at least for technology, the cost to make a new product are much less, but still great, meaning that the potential profits of creating a new product is still a big incentive. But if the patent system is changed to be more lenient, what's to stop companies from making small adjustments to other products and making huge money off of that. If anything, shouldn't that force companies to invest more in changing how we see the products? Now I know that there is a limit to this. There's not many other shapes you can make tablets, but what this experience has shown me, is that a lot of people spend a lot of money making their own products, and the patent system protects that.

Finally, even after this, I still think patent trolls are stupid. Buying patents for the sole purpose of suing others is stupid. It should be illegal. For other technology however, I am unsure how the patent system can be changed without hurting the companies that benefit from it. Logan talks about how it should be changed, but how? How can changes to the patent system better the technology industry without hurting others?

Thanks, Diet.

2

The reason they doe this is Money they hope that they land a Patiant that a Big company wants 

But who started all this Apple they even took a Greengrocer to court as he logo looked simular to Apples (looked nothing like it)

But buy taking people to court they brought this to the lime light showing money can be made

This also put the fear up people and has impacted the Tec industry

The rest of the world thinks the USA pataint laws are a Joke and play in to Apples Hands

Any company taking on Apple will loose even if Apple was the one coping

The whole patent law needs changing  

3

You're using a very niche example for a very diverse industry.  The company you are referring to has a customer base of only 6,000.  Compare that to companies that develop cancer treatment drugs which have a customer base of tens of millions.  They very quickly recoup their R&D costs by charging people $10,000 or more for just a month supply (and people generally spend between 6 months and a year fighting cancer).

Another thing to keep in mind, though difficult to prove, a fair number of researchers have pegged the cost to bring a drug to market is actually in the $90 million range.  Not the $1 billion range that pharmaceutical companies often cite to justify the high costs of their drugs.  There's a reason that the pharmaceutical industry is the first or second most profitable industry in the US.

Does it cost a lot of money to develop a new drug?  Yes.  Whether it's 90 million or 1 billion, it's still a hefty investment with a lot of risk and a long wait for return on investment.  Yet, they are still able to turn massive profits.  And a patent system that favors large corporate entities is a major reason for that. It allows them to essentially charge whatever they like for their drug, rather than basing it off of actual costs.  

Some companies, like the one you talk about, may need a longer period of time to recoup their costs due to the limited market for that drug.  But that is likely the exception in the pharma industry, not the rule.

 

4

Exactly. 

Plus you say it is okay for them to charge that much because insurance covers it? I'm sorry but many insurance plans do not cover prescription drugs. At least not fully or not the most expensive ones. They often have ridiculous copays as well. What about all the people too who don't have insurance, can't get it or can't afford it? Not to mention the millions of people in developing nations like India or in Africa where AIDs is decimating the incredibly poor population. They could never afford these drugs. But like the Bayer Executive said. "We made this drug for rich westerners who could afford it not poor or Indian people." 

It is fine for corporations to make money. That is totally okay. Nothing wrong with it at all. Profit is good. That being said how much of an incentive do they need? Like WhiskeyRanger said, the costs associated with pharmaceutical development isn't as high as they claim. Aww they don't make a profit for 4-5 years? The patent lasts for 20. Even if it they filed for it before clinical trials that means it would last anywhere between 10-14 years before it expired or needed to be renewed. If they can't make a profit in that time then there is seriously something wrong. Even after it expires they will make a slight change that does nothing to change the effect of the drug and repatent it. But I mean Pfizer only made $15 billion last year no incentive there and what HELPING PEOPLE? What kind of incentive is that?

You say it isn't hurting development either, but I don't believe that. What if all the large drug corporations, Bayer, Pfizer, Astra Zeneca, Merck and the like, pooled their resources? Shared their research and worked together along with doctors and researchers in hospitals and universities around the world? Or if they could borrow off each other and make  changes and developments? I think the world would probably be a better place. They may not make as much money, but isn't human health worth more than cash?

I feel like you heard a biased view as well. You took a tour of a company that is in the business and talked to a lawyer who represents that business. What do you really think they are going to tell you? Something that makes them look bad? I don't think so. They are going to make themselves out as the injured party. I highly doubt they went profitless for 10 years. Maybe they didn't see any money from selling that particular drug, but I'm sure they made money from other sources. Like other drugs they made or research and data they sold. 

Patents need to be reformed in several ways. People are getting patents for things that shouldn't even have ever gotten a patent in the first place, like a rectangle with rounded edges. The kind of reform talked about wouldn't really affect a company like the one you are describing or at least not to the degree it would affect a patent troll. They aren't advocating getting rid of the patent system. It is necessary. Changes just need to be made to protect people from trolls and to protect the consumer from monopoly. 

5

I completely agree with you. And want to add something:

  1. Don't trust numbers if they are not from a completely independent study.
  2. Much money for research comes from governments, charities and other non-commercial investments.
  3. Money is NOT a reason to let ANYONE die. End of the story.