About 4 weeks ago The Public Patent Foundation (PUBPAT) announced that it had formally asked the United States Patent and Trademark Office to reexamine eight patents held by Abbott Laboratories (NYSE: ABT) relating to the HIV/AIDS drug ritonavir, which is marketed by the Chicago, Illinois pharmaceutical giant under the name brand Norvir. According to PUBPAT, as it requested reexamination it submitted previously unforeseen prior art proving that the patents should not have been granted. Time will tell whether the reexamination requests are granted, but I am skeptical about the prospects for invalidating patents on drugs, particularly important or blockbuster drugs. I also question whether anti-patent do-gooders in the biotech and pharma space are really causing more harm than good through attempts to bust patents on blockbuster drugs.
The challenged patents are U.S. Patents Nos. 5,541,206, 5,635,523, 5,648,497, 5,674,882, 6,037,157, 6,703,403, 7,148,359, and 7,364,752, which are the eight patents listed in the FDA’s Orange Book for the 100mg ritonavir tablet approved on February 10, 2010. According to their own press release, PUBPAT acknowledges that the tablet is heat stable and does not need to be refrigerated like prior versions of the drug. They seemingly make the argument, although not directly, that because this makes it much more convenient for patients it is unfair to charge prices sufficient to recoup R&D and a premium to make the speculative R&D reasonably profitable for investors. Of course, the fact that the drug is extremely convenient for patients is not a reason to invalid the claims, and in fact is likely a compelling reason why the patent claims cover a truly novel and nonobvious innovation.
The very fact that PUBPAT admits in its own press release this fact about the tablet being heat stable and not require refrigeration makes me suspicious of the reexamination request. If the patents ought not to have issued covering a first of its kind heat stable HIV/AIDS drug then why hadn’t any other drug maker come up with a heat stable pill previously? It kind of makes you wonder, doesn’t it?
At least some of the charges raised by PUBPAT include attempts to prove that certain claims are obvious and should have never issued. The fact that no one has previously done something similar doesn’t mean as a matter of fact or a matter of law that an invention is nonobvious, but it can be persuasive evidence of nonobviousness and entitlement to a patent. The obviousness inquiry requires one to consider the claimed invention, the scope of the prior art and the level or ordinary skill in the art, which will inform the decision-maker whether it would have been obvious to combine one or more references to produce the claimed invention. So-called secondary considerations of obviousness are also required to be considered, and these secondary considerations, which are sometimes referred to as objective indicia of nonobviousness, provide a reality check. For example, how could anyone say in an intellectually honest way that an invention that addresses a long well known problem is obvious? If it were obvious and the problem was appreciated and well defined over a long enough period of time it would stretch the imagination to characterize the now present solution or invention as being obvious enough that it was already believed or understood to be in the public stores of knowledge.
So exactly how is a first of its kind heat stable HIV/AIDS drug obvious? That is a good question indeed. It beats me to think of any way that such a revolutionary and important advance could be viewed as obvious in any intellectually obvious way. Of course, the requests for reexamination filed by PUBPAT start out by explaining that the patents are causing public harm and that “American men, women and children suffering form HIV/AIDS are entitled to access the best pharmaceutical treatments available without undeserved patents making those treatments either too expensive or too limited in supply.” See, for example, Reexam Request re: 7,364,752; other Reexam Requests available at PUBPAT Ritonavir HIV/AIDS Drug Patents. This has absolutely nothing to do with the granting of a reexamination request, and is pure grandstanding. The question the Patent Office will answer is whether the evidence submitted suggests there is a substantial new question of patentability. Nevertheless, the grandstanding does suggest the real motive, which is to kill the patents so that generics can manufacture this revolutionary HIV/AIDS treatment for virtually free.
I would rather not get involved in a strict numbers debate regarding exactly how much it costs to go from discovery to market for a new drug. The industry says the number is somewhere between $900 million to $1 billion and the opponents would have that number be substantially less. I have heard estimates of $100 million, $300 million and $400 million. Whatever the actual number is can we at least all agree that it is a LOT of money? Of course we can, and anyone who doesn’t agree is just fooling themselves and ignoring financial and regulatory realities. Discovering new drugs and seeing them all the way through to market is an extremely expensive proposition and will only be undertaken when an acceptable rate of return can be obtained. So if you like new drugs that treat disease, including life threatening diseases, then you must be pro-patent because without a strong patent system we will get less, not more, of those treatments and cures we so desperately want.
The statistics I have seen suggest that 10% of drugs are blockbusters, 10% make a little money, 10% break even and 70% lose money. Whether you want to accept those numbers or not, can we also agree that the overwhelming majority of new drugs never make it to market, or make it to market and make little or no money? With the fall out rate due to drugs not showing the promise thought possible it is not at all a stretch to ask for everyone to accept that most drugs never make it to market. Those drugs that never make it to market and the ones that do and lose money eat up financial resources for the pharmaceutical industry just the same as the ones that do make money. This makes it all the more critical for the pharmaceutical industry to make as much as they can on the truly revolutionary blockbuster drugs they develop.
Can we also all agree that pharmaceutical research and development is extremely speculative in nature? Just look at how many drugs fall out in Phase 1 trials, how many fall out in Phase 2 trials and how many fall out in Phase 3 trials. There are even drugs that make the market and then are removed for various reasons. Also look at where pharmaceutical companies make their money; it is from a hand full of drugs usually. On top of that companies like Pfizer for years now have been in the news because they have and will continue to have important blockbuster drugs come off patent. They knew that years in advance and were researching and developing away and were not coming up with all that much that seemed exciting for a very long while. You simply can’t say we are going to invent a blockbuster pharmaceutical drug and do it on command. You need to do a lot of hard work, come up with some breakthroughs and then a little luck never hurts, and may in fact be required. This stuff is difficult science and then even more difficult application of the science so as to not harm those taking the drugs, something the FDA is extremely interested in.
Now I ask you whether those who seek to take down pharmaceutical patents so that the drugs can be made available for practically nothing are doing more good than harm? I suggest the clear answer that they are doing far more harm than good. Sure, it would be wonderful to have revolutionary drugs for practically nothing the minute they are approved for the market, but why would any pharmaceutical company ever again spend the many hundreds of millions of dollars to take a drug to market ever again? The answer is they simply wouldn’t. So if you prevent the pharmaceutical companies from making money then you are guaranteeing they will go out of business and if they are out of business it will be impossible for them to come up with further important blockbuster drugs. See, that logic wasn’t so hard to follow… was it?
I am also sick and tired of hearing the “we already paid for the research” argument. That is naive to an extraordinary level. The argument is that the federal government has funded early stage research that leads to something that is of keen commercial importance and, thus, it should be freely available to everyone. If you believe that rational please raise your hand — of course right after you remove your head from the sand firmly planted around it! Federally sponsored research and development plays a critical role in many industries, but it is simply factually inaccurate to believe that anything that is forthcoming from federally funded research is ready for commercialization on the market. Universities, for example, make scientific breakthroughs. They do not go through the FDA process and they do not engage in the translational research that is required to move from scientific discovery to commercial product. So you are believing a lie if you think that federally funded research is capable of filling the need for translational research required to get to market. You are also living a lie if you think the US government has enough money to invest in such research. Newsflash — thanks to out of control spending we are broke!
Now I am not advocating bad patents, and if the patents are bad then they shouldn’t issue; my beliefs on that have not changed and are well documented. It is, however, hard to imagine that the revolutionary first of its kind heat stable HIV/AIDS drug is or will be determined to be obvious, and it is difficult for me to believe the claims will be determined to be anticipated because they are identical to what is in the prior art. This is because unlike any other area of innovation the pharmaceutical, and perhaps the biotech, industry really only care about extraordinarily narrow claims. The claims that matter are the ones to the specific formulation that gets FDA approval, so extremely narrow claims can be tolerated without a second thought. That’s because all they need to do is prevent the generic drug makers from making exactly what is approved. If the generic drug makers want to make something similar but not the same then who cares? They won’t because they would have to go through and fund the rigorous FDA review process because what they want to make is not the same as what is already approved. That is why PUBPAT wants to invalid the patents, because they cover the specific drug approved and if the patents fall then generics can swoop in and make the drug relying on the hard work and extraordinarily expensive work done by Abbott to get through the FDA regulatory process. Talk about free-riders!
The reality is the generics and those who seek to bring down pharmaceutical patents that cover FDA approved drugs are interested in only a couple things. First, some are just straight out anti-patent and would rather see the entire patent system disappear, which is naive in the extreme. Second, there are others are not necessarily anti-patent but they want the pharmaceutical giants to fund all the research, development and the FDA regulatory review through at least 3 phases of trials so that they can copy all that work and sell the drug for pennies on the dollar. Of course generics can sell drugs for pennies on the dollar, they don’t innovate! All they do is copy! Is that what the patent system is supposed to promote? Is that what the Constitution says and what our founding fathers wanted? No. Innovators are to be rewarded and copyists are to wait until exclusive rights expire.
I am like everyone else. I like paying less for prescription drugs and am thankful when a generic is available. Unlike many, however, I do not begrudge paying for an on-patent prescription drug because I am just thankful the drug exists and know that in a few years it will be available for next to nothing. So in exchange for allowing market exclusivity for a few years, which is usually less than 12 years the pharmaceutical case, we get the benefit of the drug immediately and then have to pay pennies on the dollar once the patent expires. That is perhaps one of the best trade-offs of all time, and the fact that there are some who would rather punish big pharma and consequently not have the drugs (or as many) in the first place is perplexing.