Why Patent Protection In The Drug Industry Is Out Of Control

I cover the business and culture of health care every other Thursday.

In the United States, the patent protection process as it relates to the drug industry has been distorted by the political system, intense lobbying and large campaign contributions. The result has been pricing contrary to the greater good of the nation.

Patents originated in ancient Greece. This legal protection assumed greater importance in 15th-century Venice as a means to protect the nation-state’s glass-blowing industry. The first patent granted in the United States was in 1790.

Across history, governments created patents for two important purposes. The first was to stimulate interest in research and find solutions to problems that vexed the nation and the world. The second was to promote the broader good of the country. The duration of time designated for exclusive use of the new technology or approach was intended to be relatively short, with the public gaining the resulting benefits in perpetuity. As such, the granting of a patent was designed to advance not only the interests of its creator, but also, equally, the economy and well-being of the nation.


Photo by TheDigitalWay/CC0

The intent of the patent process and the balance between the dual objectives have been warped over the past decade. Increasingly, drug companies are not investing in R&D proportional to the profits they earn from the drugs they bring to market, despite their protests to the contrary. Instead, many have figured out that it’s simpler and safer from a financial perspective to either buy the rights to drugs developed by others and raise the prices many times over, as with Sovaldi, or to obtain a medication already in existence and, using monopolistic control, raise the price as much as 500% or more, as in the case of the EpiPen. As a consequence, the patent protection process now primarily serves the drug companies, most often not on behalf of the American people, but, rather, at their expense.

What Patents Originally Intended

Patent protection was never intended for use in a situation when human life would be endangered through its use. In other areas of society, broad legal prohibitions exist to protect human life and the well-being of citizens. For example, individuals are prohibited from yelling “Fire!” in a theater, and utility monopolies that control all of the electricity for a city are prohibited from price gouging. Patents make sense in a retail or manufacturing context. If you don’t want to purchase Venetian glass, you can decide it’s too expensive. In contrast, if your child is born with a genetic defect, you have no choice but to obtain the medication available for treatment regardless of price.


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