BMJ: Innovative Solution to Medical Property Rights Problem

[Guest guest]

http://www.bmj.com/cgi/content/full/333/7582/1279

BMJ 2006;333:1279-1280 (23 December), doi:10.1136/bmj.39048.428380.80

Editorials

Scrooge and intellectual property rights

A medical prize fund could improve the financing of drug innovations

At Christmas, we traditionally retell Dickens's story of Scrooge, who cared

more for money than for his fellow human beings. What would we think of a

Scrooge who could cure diseases that blighted thousands of people's lives

but did not do so? Clearly, we would be horrified. But this has increasingly

been happening in the name of economics, under the innocent sounding guise

of " intellectual property rights. "

Intellectual property differs from other property—restricting its use is

inefficient as it costs nothing for another person to use it.

Jefferson, America's third president, put it more poetically than modern

economists (who refer to " zero marginal costs " and " non-rivalrous

consumption " ) when he said that knowledge is like a candle, when one candle

lights another it does not diminish from the light of the first. Using

knowledge to help someone does not prevent that knowledge from helping

others. Intellectual property rights, however, enable one person or company

to have exclusive control of the use of a particular piece of knowledge,

thereby creating monopoly power. Monopolies distort the economy. Restricting

the use of medical knowledge not only affects economic efficiency, but also

life itself.

We tolerate such restrictions in the belief that they might spur innovation,

balancing costs against benefits. But the costs of restrictions can outweigh

the benefits. It is hard to see how the patent issued by the US government

for the healing properties of turmeric, which had been known for hundreds of

years, stimulated research. Had the patent been enforced in India, poor

people who wanted to use this compound would have had to pay royalties to

the United States.

In 1995 the Uruguay round trade negotiations concluded in the establishment

of the World Trade Organization, which imposed US style intellectual

property rights around the world. These rights were intended to reduce

access to generic medicines and they succeeded. As generic medicines cost a

fraction of their brand name counterparts, billions could no longer afford

the drugs they needed. For example, a year's treatment with a generic

cocktail of AIDS drugs might cost $130 (£65; 170) compared with $10 000 for

the brand name version.1 Billions of people living on $2-3 a day cannot

afford $10 000, though they might be able to scrape together enough for the

generic drugs. And matters are getting worse. New drug regimens recommended

by the World Health Organization and second line defences that need to be

used as resistance to standard treatments develops can cost much more.

Developing countries paid a high price for this agreement. But what have

they received in return? Drug companies spend more on advertising and

marketing than on research, more on research on lifestyle drugs than on life

saving drugs, and almost nothing on diseases that affect developing

countries only. This is not surprising. Poor people cannot afford drugs, and

drug companies make investments that yield the highest returns. The chief

executive of Novartis, a drug company with a history of social

responsibility, said " We have no model which would [meet] the need for new

drugs in a sustainable way ... You can't expect for-profit organizations to

do this on a large scale. " 2

Research needs money, but the current system results in limited funds being

spent in the wrong way. For instance, the human genome project decoded the

human genome within the target timeframe, but a few scientists managed to

beat the project so they could patent genes related to breast cancer. The

social value of gaining this knowledge slightly earlier was small, but the

cost was enormous. Consequently the cost of testing for breast cancer

vulnerability genes is high. In countries with no national health service

many women with these genes will fail to be tested. In counties where

governments will pay for these tests less money will be available for other

public health needs.

A medical prize fund provides an alternative. Such a fund would give large

rewards for cures or vaccines for diseases like malaria that affect

millions, and smaller rewards for drugs that are similar to existing ones,

with perhaps slightly different side effects. The intellectual property

would be available to generic drug companies. The power of competitive

markets would ensure a wide distribution at the lowest possible price,

unlike the current system, which uses monopoly power, with its high prices

and limited usage.

The prizes could be funded by governments in advanced industrial countries.

For diseases that affect the developed world, governments are already paying

as part of the health care they provide for their citizens. For diseases

that affect developing countries, the funding could be part of development

assistance. Money spent in this way might do as much to improve the

wellbeing of people in the developing world—and even their productivity—as

any other that they are given.

The medical prize fund could be one of several ways to promote innovation in

crucial diseases. The most important ideas that emerge from basic science

have never been protected by patents and never should be. Most researchers

are motivated by the desire to enhance understanding and help humankind. Of

course money is needed, and governments must continue to provide money

through research grants along with support for government research

laboratories and research universities. The patent system would continue to

play a part for applications for which no one offers a prize . The prize

fund should complement these other methods of funding; it at least holds the

promise that in the future more money will be spent on research than on

advertising and marketing of drugs, and that research concentrates on

diseases that matter. Importantly, the medical prize fund would ensure that

we make the best possible use of whatever knowledge we acquire, rather than

hoarding it and limiting usage to those who can afford it, as Scrooge might

have done. It is a thought we should keep in mind this Christmas.3 4 5 6

ph E Stiglitz, professor

1 Columbia University, New York, NY 10025, USA

jb2632@...

--------------------------------------------------------------------------------

Competing interests: JES was chief economist of the World Bank from 1997 to

2000 and a member and then chairman of President Clinton's Council of

Economic Advisers from 1993 to 1997. He won the Nobel Prize for economics in

2001.

References

Médecins Sans Frontières. People not getting the treatment they need to stay

alive. Newer AIDS drugs unaffordable and unavailable. Geneva: MSF, 29

November 2006.

J. Novartis chief in warning on cheap drugs. Financial Times 29

September 2006.

Stiglitz JE. Making globalization work. New York: WW Norton, 2006.

Hollis A. Optional rewards for new drugs for developing countries. Geneva:

World Health Organization, 5 April 2005.

www.who.int/entity/intellectualproperty/submissions/Submissions.AidanHollis.pdf.

Pogge T. Human rights and global health: a research program. Metaphilosophy

2005;1/2(36).

Love J. Submission of CPTech to IGWG. 15 November 2006.

www.who.int/entity/public_hearing_phi/summary/15Nov06LoveCPTech.pdf

[Guest guest]

http://www.bmj.com/cgi/content/full/333/7582/1279

BMJ 2006;333:1279-1280 (23 December), doi:10.1136/bmj.39048.428380.80

Editorials

Scrooge and intellectual property rights

A medical prize fund could improve the financing of drug innovations

At Christmas, we traditionally retell Dickens's story of Scrooge, who cared

more for money than for his fellow human beings. What would we think of a

Scrooge who could cure diseases that blighted thousands of people's lives

but did not do so? Clearly, we would be horrified. But this has increasingly

been happening in the name of economics, under the innocent sounding guise

of " intellectual property rights. "

Intellectual property differs from other property—restricting its use is

inefficient as it costs nothing for another person to use it.

Jefferson, America's third president, put it more poetically than modern

economists (who refer to " zero marginal costs " and " non-rivalrous

consumption " ) when he said that knowledge is like a candle, when one candle

lights another it does not diminish from the light of the first. Using

knowledge to help someone does not prevent that knowledge from helping

others. Intellectual property rights, however, enable one person or company

to have exclusive control of the use of a particular piece of knowledge,

thereby creating monopoly power. Monopolies distort the economy. Restricting

the use of medical knowledge not only affects economic efficiency, but also

life itself.

We tolerate such restrictions in the belief that they might spur innovation,

balancing costs against benefits. But the costs of restrictions can outweigh

the benefits. It is hard to see how the patent issued by the US government

for the healing properties of turmeric, which had been known for hundreds of

years, stimulated research. Had the patent been enforced in India, poor

people who wanted to use this compound would have had to pay royalties to

the United States.

In 1995 the Uruguay round trade negotiations concluded in the establishment

of the World Trade Organization, which imposed US style intellectual

property rights around the world. These rights were intended to reduce

access to generic medicines and they succeeded. As generic medicines cost a

fraction of their brand name counterparts, billions could no longer afford

the drugs they needed. For example, a year's treatment with a generic

cocktail of AIDS drugs might cost $130 (£65; 170) compared with $10 000 for

the brand name version.1 Billions of people living on $2-3 a day cannot

afford $10 000, though they might be able to scrape together enough for the

generic drugs. And matters are getting worse. New drug regimens recommended

by the World Health Organization and second line defences that need to be

used as resistance to standard treatments develops can cost much more.

Developing countries paid a high price for this agreement. But what have

they received in return? Drug companies spend more on advertising and

marketing than on research, more on research on lifestyle drugs than on life

saving drugs, and almost nothing on diseases that affect developing

countries only. This is not surprising. Poor people cannot afford drugs, and

drug companies make investments that yield the highest returns. The chief

executive of Novartis, a drug company with a history of social

responsibility, said " We have no model which would [meet] the need for new

drugs in a sustainable way ... You can't expect for-profit organizations to

do this on a large scale. " 2

Research needs money, but the current system results in limited funds being

spent in the wrong way. For instance, the human genome project decoded the

human genome within the target timeframe, but a few scientists managed to

beat the project so they could patent genes related to breast cancer. The

social value of gaining this knowledge slightly earlier was small, but the

cost was enormous. Consequently the cost of testing for breast cancer

vulnerability genes is high. In countries with no national health service

many women with these genes will fail to be tested. In counties where

governments will pay for these tests less money will be available for other

public health needs.

A medical prize fund provides an alternative. Such a fund would give large

rewards for cures or vaccines for diseases like malaria that affect

millions, and smaller rewards for drugs that are similar to existing ones,

with perhaps slightly different side effects. The intellectual property

would be available to generic drug companies. The power of competitive

markets would ensure a wide distribution at the lowest possible price,

unlike the current system, which uses monopoly power, with its high prices

and limited usage.

The prizes could be funded by governments in advanced industrial countries.

For diseases that affect the developed world, governments are already paying

as part of the health care they provide for their citizens. For diseases

that affect developing countries, the funding could be part of development

assistance. Money spent in this way might do as much to improve the

wellbeing of people in the developing world—and even their productivity—as

any other that they are given.

The medical prize fund could be one of several ways to promote innovation in

crucial diseases. The most important ideas that emerge from basic science

have never been protected by patents and never should be. Most researchers

are motivated by the desire to enhance understanding and help humankind. Of

course money is needed, and governments must continue to provide money

through research grants along with support for government research

laboratories and research universities. The patent system would continue to

play a part for applications for which no one offers a prize . The prize

fund should complement these other methods of funding; it at least holds the

promise that in the future more money will be spent on research than on

advertising and marketing of drugs, and that research concentrates on

diseases that matter. Importantly, the medical prize fund would ensure that

we make the best possible use of whatever knowledge we acquire, rather than

hoarding it and limiting usage to those who can afford it, as Scrooge might

have done. It is a thought we should keep in mind this Christmas.3 4 5 6

ph E Stiglitz, professor

1 Columbia University, New York, NY 10025, USA

jb2632@...

--------------------------------------------------------------------------------

Competing interests: JES was chief economist of the World Bank from 1997 to

2000 and a member and then chairman of President Clinton's Council of

Economic Advisers from 1993 to 1997. He won the Nobel Prize for economics in

2001.

References

Médecins Sans Frontières. People not getting the treatment they need to stay

alive. Newer AIDS drugs unaffordable and unavailable. Geneva: MSF, 29

November 2006.

J. Novartis chief in warning on cheap drugs. Financial Times 29

September 2006.

Stiglitz JE. Making globalization work. New York: WW Norton, 2006.

Hollis A. Optional rewards for new drugs for developing countries. Geneva:

World Health Organization, 5 April 2005.

www.who.int/entity/intellectualproperty/submissions/Submissions.AidanHollis.pdf.

Pogge T. Human rights and global health: a research program. Metaphilosophy

2005;1/2(36).

Love J. Submission of CPTech to IGWG. 15 November 2006.

www.who.int/entity/public_hearing_phi/summary/15Nov06LoveCPTech.pdf

[Guest guest]

http://www.bmj.com/cgi/content/full/333/7582/1279

BMJ 2006;333:1279-1280 (23 December), doi:10.1136/bmj.39048.428380.80

Editorials

Scrooge and intellectual property rights

A medical prize fund could improve the financing of drug innovations

At Christmas, we traditionally retell Dickens's story of Scrooge, who cared

more for money than for his fellow human beings. What would we think of a

Scrooge who could cure diseases that blighted thousands of people's lives

but did not do so? Clearly, we would be horrified. But this has increasingly

been happening in the name of economics, under the innocent sounding guise

of " intellectual property rights. "

Intellectual property differs from other property—restricting its use is

inefficient as it costs nothing for another person to use it.

Jefferson, America's third president, put it more poetically than modern

economists (who refer to " zero marginal costs " and " non-rivalrous

consumption " ) when he said that knowledge is like a candle, when one candle

lights another it does not diminish from the light of the first. Using

knowledge to help someone does not prevent that knowledge from helping

others. Intellectual property rights, however, enable one person or company

to have exclusive control of the use of a particular piece of knowledge,

thereby creating monopoly power. Monopolies distort the economy. Restricting

the use of medical knowledge not only affects economic efficiency, but also

life itself.

We tolerate such restrictions in the belief that they might spur innovation,

balancing costs against benefits. But the costs of restrictions can outweigh

the benefits. It is hard to see how the patent issued by the US government

for the healing properties of turmeric, which had been known for hundreds of

years, stimulated research. Had the patent been enforced in India, poor

people who wanted to use this compound would have had to pay royalties to

the United States.

In 1995 the Uruguay round trade negotiations concluded in the establishment

of the World Trade Organization, which imposed US style intellectual

property rights around the world. These rights were intended to reduce

access to generic medicines and they succeeded. As generic medicines cost a

fraction of their brand name counterparts, billions could no longer afford

the drugs they needed. For example, a year's treatment with a generic

cocktail of AIDS drugs might cost $130 (£65; 170) compared with $10 000 for

the brand name version.1 Billions of people living on $2-3 a day cannot

afford $10 000, though they might be able to scrape together enough for the

generic drugs. And matters are getting worse. New drug regimens recommended

by the World Health Organization and second line defences that need to be

used as resistance to standard treatments develops can cost much more.

Developing countries paid a high price for this agreement. But what have

they received in return? Drug companies spend more on advertising and

marketing than on research, more on research on lifestyle drugs than on life

saving drugs, and almost nothing on diseases that affect developing

countries only. This is not surprising. Poor people cannot afford drugs, and

drug companies make investments that yield the highest returns. The chief

executive of Novartis, a drug company with a history of social

responsibility, said " We have no model which would [meet] the need for new

drugs in a sustainable way ... You can't expect for-profit organizations to

do this on a large scale. " 2

Research needs money, but the current system results in limited funds being

spent in the wrong way. For instance, the human genome project decoded the

human genome within the target timeframe, but a few scientists managed to

beat the project so they could patent genes related to breast cancer. The

social value of gaining this knowledge slightly earlier was small, but the

cost was enormous. Consequently the cost of testing for breast cancer

vulnerability genes is high. In countries with no national health service

many women with these genes will fail to be tested. In counties where

governments will pay for these tests less money will be available for other

public health needs.

A medical prize fund provides an alternative. Such a fund would give large

rewards for cures or vaccines for diseases like malaria that affect

millions, and smaller rewards for drugs that are similar to existing ones,

with perhaps slightly different side effects. The intellectual property

would be available to generic drug companies. The power of competitive

markets would ensure a wide distribution at the lowest possible price,

unlike the current system, which uses monopoly power, with its high prices

and limited usage.

The prizes could be funded by governments in advanced industrial countries.

For diseases that affect the developed world, governments are already paying

as part of the health care they provide for their citizens. For diseases

that affect developing countries, the funding could be part of development

assistance. Money spent in this way might do as much to improve the

wellbeing of people in the developing world—and even their productivity—as

any other that they are given.

The medical prize fund could be one of several ways to promote innovation in

crucial diseases. The most important ideas that emerge from basic science

have never been protected by patents and never should be. Most researchers

are motivated by the desire to enhance understanding and help humankind. Of

course money is needed, and governments must continue to provide money

through research grants along with support for government research

laboratories and research universities. The patent system would continue to

play a part for applications for which no one offers a prize . The prize

fund should complement these other methods of funding; it at least holds the

promise that in the future more money will be spent on research than on

advertising and marketing of drugs, and that research concentrates on

diseases that matter. Importantly, the medical prize fund would ensure that

we make the best possible use of whatever knowledge we acquire, rather than

hoarding it and limiting usage to those who can afford it, as Scrooge might

have done. It is a thought we should keep in mind this Christmas.3 4 5 6

ph E Stiglitz, professor

1 Columbia University, New York, NY 10025, USA

jb2632@...

--------------------------------------------------------------------------------

Competing interests: JES was chief economist of the World Bank from 1997 to

2000 and a member and then chairman of President Clinton's Council of

Economic Advisers from 1993 to 1997. He won the Nobel Prize for economics in

2001.

References

Médecins Sans Frontières. People not getting the treatment they need to stay

alive. Newer AIDS drugs unaffordable and unavailable. Geneva: MSF, 29

November 2006.

J. Novartis chief in warning on cheap drugs. Financial Times 29

September 2006.

Stiglitz JE. Making globalization work. New York: WW Norton, 2006.

Hollis A. Optional rewards for new drugs for developing countries. Geneva:

World Health Organization, 5 April 2005.

www.who.int/entity/intellectualproperty/submissions/Submissions.AidanHollis.pdf.

Pogge T. Human rights and global health: a research program. Metaphilosophy

2005;1/2(36).

Love J. Submission of CPTech to IGWG. 15 November 2006.

www.who.int/entity/public_hearing_phi/summary/15Nov06LoveCPTech.pdf

[Guest guest]

http://www.bmj.com/cgi/content/full/333/7582/1279

BMJ 2006;333:1279-1280 (23 December), doi:10.1136/bmj.39048.428380.80

Editorials

Scrooge and intellectual property rights

A medical prize fund could improve the financing of drug innovations

At Christmas, we traditionally retell Dickens's story of Scrooge, who cared

more for money than for his fellow human beings. What would we think of a

Scrooge who could cure diseases that blighted thousands of people's lives

but did not do so? Clearly, we would be horrified. But this has increasingly

been happening in the name of economics, under the innocent sounding guise

of " intellectual property rights. "

Intellectual property differs from other property—restricting its use is

inefficient as it costs nothing for another person to use it.

Jefferson, America's third president, put it more poetically than modern

economists (who refer to " zero marginal costs " and " non-rivalrous

consumption " ) when he said that knowledge is like a candle, when one candle

lights another it does not diminish from the light of the first. Using

knowledge to help someone does not prevent that knowledge from helping

others. Intellectual property rights, however, enable one person or company

to have exclusive control of the use of a particular piece of knowledge,

thereby creating monopoly power. Monopolies distort the economy. Restricting

the use of medical knowledge not only affects economic efficiency, but also

life itself.

We tolerate such restrictions in the belief that they might spur innovation,

balancing costs against benefits. But the costs of restrictions can outweigh

the benefits. It is hard to see how the patent issued by the US government

for the healing properties of turmeric, which had been known for hundreds of

years, stimulated research. Had the patent been enforced in India, poor

people who wanted to use this compound would have had to pay royalties to

the United States.

In 1995 the Uruguay round trade negotiations concluded in the establishment

of the World Trade Organization, which imposed US style intellectual

property rights around the world. These rights were intended to reduce

access to generic medicines and they succeeded. As generic medicines cost a

fraction of their brand name counterparts, billions could no longer afford

the drugs they needed. For example, a year's treatment with a generic

cocktail of AIDS drugs might cost $130 (£65; 170) compared with $10 000 for

the brand name version.1 Billions of people living on $2-3 a day cannot

afford $10 000, though they might be able to scrape together enough for the

generic drugs. And matters are getting worse. New drug regimens recommended

by the World Health Organization and second line defences that need to be

used as resistance to standard treatments develops can cost much more.

Developing countries paid a high price for this agreement. But what have

they received in return? Drug companies spend more on advertising and

marketing than on research, more on research on lifestyle drugs than on life

saving drugs, and almost nothing on diseases that affect developing

countries only. This is not surprising. Poor people cannot afford drugs, and

drug companies make investments that yield the highest returns. The chief

executive of Novartis, a drug company with a history of social

responsibility, said " We have no model which would [meet] the need for new

drugs in a sustainable way ... You can't expect for-profit organizations to

do this on a large scale. " 2

Research needs money, but the current system results in limited funds being

spent in the wrong way. For instance, the human genome project decoded the

human genome within the target timeframe, but a few scientists managed to

beat the project so they could patent genes related to breast cancer. The

social value of gaining this knowledge slightly earlier was small, but the

cost was enormous. Consequently the cost of testing for breast cancer

vulnerability genes is high. In countries with no national health service

many women with these genes will fail to be tested. In counties where

governments will pay for these tests less money will be available for other

public health needs.

A medical prize fund provides an alternative. Such a fund would give large

rewards for cures or vaccines for diseases like malaria that affect

millions, and smaller rewards for drugs that are similar to existing ones,

with perhaps slightly different side effects. The intellectual property

would be available to generic drug companies. The power of competitive

markets would ensure a wide distribution at the lowest possible price,

unlike the current system, which uses monopoly power, with its high prices

and limited usage.

The prizes could be funded by governments in advanced industrial countries.

For diseases that affect the developed world, governments are already paying

as part of the health care they provide for their citizens. For diseases

that affect developing countries, the funding could be part of development

assistance. Money spent in this way might do as much to improve the

wellbeing of people in the developing world—and even their productivity—as

any other that they are given.

The medical prize fund could be one of several ways to promote innovation in

crucial diseases. The most important ideas that emerge from basic science

have never been protected by patents and never should be. Most researchers

are motivated by the desire to enhance understanding and help humankind. Of

course money is needed, and governments must continue to provide money

through research grants along with support for government research

laboratories and research universities. The patent system would continue to

play a part for applications for which no one offers a prize . The prize

fund should complement these other methods of funding; it at least holds the

promise that in the future more money will be spent on research than on

advertising and marketing of drugs, and that research concentrates on

diseases that matter. Importantly, the medical prize fund would ensure that

we make the best possible use of whatever knowledge we acquire, rather than

hoarding it and limiting usage to those who can afford it, as Scrooge might

have done. It is a thought we should keep in mind this Christmas.3 4 5 6

ph E Stiglitz, professor

1 Columbia University, New York, NY 10025, USA

jb2632@...

--------------------------------------------------------------------------------

Competing interests: JES was chief economist of the World Bank from 1997 to

2000 and a member and then chairman of President Clinton's Council of

Economic Advisers from 1993 to 1997. He won the Nobel Prize for economics in

2001.

References

Médecins Sans Frontières. People not getting the treatment they need to stay

alive. Newer AIDS drugs unaffordable and unavailable. Geneva: MSF, 29

November 2006.

J. Novartis chief in warning on cheap drugs. Financial Times 29

September 2006.

Stiglitz JE. Making globalization work. New York: WW Norton, 2006.

Hollis A. Optional rewards for new drugs for developing countries. Geneva:

World Health Organization, 5 April 2005.

www.who.int/entity/intellectualproperty/submissions/Submissions.AidanHollis.pdf.

Pogge T. Human rights and global health: a research program. Metaphilosophy

2005;1/2(36).

Love J. Submission of CPTech to IGWG. 15 November 2006.

www.who.int/entity/public_hearing_phi/summary/15Nov06LoveCPTech.pdf