Re: Dominant Patents

[rlande@UBmail.ubalt.edu]

Why dosn't the drug manufacturer agree to use the method that reduces
the need for the drug by 50%, but then double the price of the drug?
Is the problem that it is locked into a payment schedule that would
prevent it from doubling the price of the drug, or that doubling the 
price would create bad will and give it a bad corporate image?

Bob Lande

On Sun, 12 Apr 1998, James Love wrote:

> Yee Wah Chin wrote:
> 
> > how many years are left on the biotech firm's patent?
> 
>     The new invention was first discovered in 1991, only six years after the
> first patent was issued (in 1985) for the drug.  I'm not sure when the
> effective protection for the first patent will expire.  There is the primary
> term, which I believe is still 17.  But often companies can get effective
> extension, sometimes by "evergreening" the patent, with patents on treatment
> regimes (as was done with Taxol recently).  This typically gives an
> automatic 30 months extra, at a minimum, and it can give much more.
> 
> > what substitutes
> > are there for the patented product, both during and after the life of
> > the patent?
> 
>       I don't believe there are any significant substitutes available now.
> 
> > how locked in are reimbursement schedules realistically?
> 
>       I would say pretty locked in.  Negations over reimbursement schedules
> are prominently mentioned in company 10k reports.  There is much resistance
> to the high price of drug.  A new product+ with a higher price is a
> possibility, but might be difficult to sell to payers.  For one thing, the
> new  invention would benefit some patents much more than others.
> 
> > what basis might the biotech firm have to sue the inventor?
> 
>      I'm not sure about this.  However, companies that were approached about
> licensing the invention specifically mentioned this as a reason not to work
> on the product.  One company had already spend a reported $40 million (I am
> told) in litigation with patent owner in dispute over drug.
> 
>     There is a possiblity that a claim would be made that the new invention
> is covered in part by the old patent.
> 
> > how much would total demand for the patented product rise if less of it
> > is needed for effective treatment?
> 
>     Inventor tried to persuade the orginial patent owner that this would
> compensate for lose of unit sales for established base.  The orginial patent
> owner was not impressed with this argument.
> 
> 
> > in other words, how much is current
> > demand for the product constrained by the amount, and the therefore the
> > cost, of the product needed for effective treatment?  are we talking
> > about a cancer cure or an acne treatment?
> 
>      It is a an expensive drug $1,000 to $3,000 per treatment, I was told.
> It is for life threatening medical problems.   The drug saves lives, for
> those who can afford it.    There are many patients worldwide who do not use
> the drug because of its high cost.
> 
> --
> James Love
> Consumer Project on Technology
> P.O. Box 19367, Washington, DC 20036
> love@cptech.org | http://www.cptech.org
> voice 202.387.8030, fax 202.234.5176
> 
> 
>