Are Patents Leading to Drugs that Cure the Wrong Patients?

A version of this Health Alert appeared at Forbes.

That’s not a headline you’ve read before, I’ll bet. New evidence suggests that drug companies invest too much in therapies targeting diseases at late stages and not enough on prevention or early-state therapies.

It is emotionally satisfying and socially acceptable to say that buying an extra few months of life is priceless, but if resources invested in such drugs could have been invested in drugs that would have dramatically increased the quality or length of lives of other patients, it is not evil to suggest that the resources were misallocated.

Eric Budish of the University of Chicago, and colleagues, have observed that drug companies invest significantly more in researching and developing therapies for late-stage than early-stage cancers. They have identified the patent system as the culprit. As summarized in the Economist’s Free Exchange blog:

The economists find that pharmaceutical companies conduct 30 times more clinical trials for recurrent cancer drugs than for preventive drugs (the effect persists even after adjusting for market size). The authors also show that firms divert their R&D expenditures away from more curable, localised cancers and focus on incurable metastatic and recurrent cancers instead. The patent system encourages pharmaceuticals to pump out drugs aimed at those who have almost no chance of surviving the cancer anyway. This patent distortion costs the U.S. economy around $89 billion a year in lost lives.

To put it (a little too) simply, patents have a term of twenty years. If a drug-maker has to do a clinical trial that lasts ten years until it reaches its endpoints, it will have only ten years of patent life. If a trial for a late-stage cancer only takes one year to reach its endpoints, it will have up to nineteen years of patent life. Here is an example from the study:

A first study, de Bono et al. (2011), analyzed a treatment for metastatic prostate cancer (an advanced stage of prostate cancer with a five-year survival rate on the order of 20 percent). The study tracked patient survival for a median time of 12.8 months, and estimated statistically significant improvements in survival (a gain of 3.9 months of life on average). A second study, Jones et al. (2011), analyzed a treatment for localized prostate cancer (an early stage of prostate cancer with a five-year survival rate on the order of 80 percent). The study tracked patient survival for a median time of 9.1 years, estimating statistically significant improvements in survival. As expected, this stark difference in patient follow-up times translates into a large difference in clinical trial length: 3 years for the metastatic patient trial versus 18 years for the localized patient trial. All else equal, the drug treating localized patients would receive 15 fewer years of effective patent life relative to the drug treating metastatic patients.

The Economist’s Free Exchange blogger agrees that the patent system is to blame. However, that may be the wrong conclusion. The Food and Drug Administration (FDA), not the patent office, imposes the burden of clinical trials on drug-makers, and these costs have spiraled upwards.

The research-based pharmaceutical industry has endorsed patent-term restoration, which means adding the time chewed up in FDA-mandated R&D to the back end of the patent. This was partially achieved in the U.S. via the Hatch-Waxman Act (1984). Patent-term restoration mitigates the problem for the industry, but it is a weak solution for society. It reduces the incentive for the industry to advocate reforms that reduce the FDA’s power. Instead, firms are largely satisfied with paying user-fees in an attempt to speed up the FDA’s unreformed regulatory processes.

As Budish and colleagues note, the use of surrogate endpoints can help solve the problem. However, the availability of surrogate endpoints is disease-specific. (The widespread use of statins to reduce cardiovascular risks would not have occurred unless blood-cholesterol was accepted as a surrogate endpoint.)

A better solution would be dramatic change in the FDA’s demands for clinical trials. In his recent book, The Cure In The Code, Peter Huber explains how adaptive clinical trials can speed up R&D. Sophisticated statistical techniques could allow clinical trials to “learn” as they proceed and permit earlier and wider use of new medicines without jeopardizing the FDA’s so-called “gold standard.”

To improve the benefits of pharmaceutical R&D, let’s focus on fixing the FDA first, before fiddling with a patent system that has successfully promoted medical innovation.

Comments (14)

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  1. Dale says:

    “To improve the benefits of pharmaceutical R&D, let’s focus on fixing the FDA first,”

    I agree. It seems much more effective to fix a inefficient government agency than to simply reform patent laws. Patents are effective and stimulate innovation.

    • Pat says:

      It’s the wrong kind of innovation. It’s deadly. The emphasis should be on discovering natural ways of healing. What a wonderful world it would be for people if they would just stop poisoning us and get to root causes, stop persecuting people with answers, and go back to the remedies that have been tested for hundreds or thousands of years.

  2. Thomas says:

    If the burden that the FDA puts on drug companies lightens, perhaps many companies would focus R&D for preventative measures rather than late stage. Longer approval times are creating disincentives to develop preventative meds.

  3. Devon Herrick says:

    I’ve heard all manner of criticisms of drug patents and drug makers. Marcia Angell complained too many drugs are “me too” copies of successful drugs (which is actually a good thing). It’s well known that drug makers have strong financial incentives to pursue drugs for chronic conditions that millions of patients will take for years on end. I never really thought about how the patent system creates an incentive to pursue late stage cancer drugs, since impending death creates a measurable endpoint. Oddly enough, this also suggests drug makers have an incentive to get a marginal (late-stage) cancer drug to market quickly, rather than continually improve its efficacy(e.g. the better it works, the longer it takes to get it to market). Of course, a drug that is really showing improvement would be fast-tracked to market.

    • Matthew says:

      “Marcia Angell complained too many drugs are “me too” copies of successful drugs (which is actually a good thing)”

      I don’t know if there can be such a thing as too many for consumers. This increases choice and drives costs down. If Lipitor was the only “statin” drug on the market, this would be a much higher cost drug.

      • Pat says:

        Lipitor is a deadly drug. Making it more expensive would spare more people. To Devon: it is my understanding that Penicillin didn’t require trials. People could see immediately that it worked. If we had that kind of standard for drugs, what a different world it would be!

      • John R. Graham says:

        I was at a meeting on Sovaldi, the Hep C wonder-drug. I asked the pharmaceutical-industry spokesperson on the panel if she preferred the days when the industry was rapped for “me-too” drugs or the new situation, when it is rapped for inventing innovative new drugs.

        • Pat says:

          That would be fine with me. We don’t need drugs. We need safe, effective remedies. Drugs are dangerous and violate medical ethics. Don’t make the mistake of thinking that pharmaceutical companies are out there to help people become healthy. They’re out there to make a killing, and they do, both figuratively and literally.

          It was the shock of my life to learn that not even aspirin is safe. I got tinnitus from taking it.

          • Pat says:

            Oddly, this got stuck on the wrong comment. It applies to where you said we would get one drug every 100 years or so.

  4. Buddy says:

    Perhaps late stage drugs are just a more lucrative option that committing revenue to R&D on preventative drugs.

  5. Linda Gorman says:

    Why do people who criticize the pharmaceutical companies for what they work on never seem to recognize that when doing new things it is really important to work on problems that one has a chance of solving?

    Problems that can be solved usually get that way after long periods of preliminary work understanding the mechanisms used to solve them. If one can’t locate, and doesn’t understand, the biology of “early stage cancers,” how is one to supposed to work on preventing them?

    • John R. Graham says:

      I really admired the insight of the article (obviously, or I would not have written about it). However, I wonder if we can really generalize from the sample these scholars examined?

  6. Pat says:

    Wrong solution. Your idea will simply increase the number of DEADLY drugs on the market, with more danger to end users who didn’t agree to be guinea pigs. I say, abolish patents for substances. Patents should be given for PROCESSES, not substances. Of course, that will never happen. Big Pharma has too much political clout, and they don’t want that.

    I’m not sure how we can bring this about. It needs to be done. I am sickened by the damage I see which is happening to my loved ones who won’t listen to me about the dangers and lack of efficacy of these drugs. Statins are particularly notorious. They’re my main gripe with respect to my loved ones. Cholesterol is NOT the issue, and allowing the companies to substitute these fake end points has been very damaging to the health of the people who take drugs.

    We also need to outlaw any contact between doctors and drug companies. Force the doctors to read peer reviewed journals, and cut the ties between Big Pharma and the journals.

    There is way too much conflict of interest. Medicine has abdicated its basic principle: First Do No Harm.