Authors

Nicholson Price is an Assistant Professor of Law at the University of Michigan Law School. Previously, he taught law at the University of New Hampshire. He holds a PhD in Biological Sciences and a JD, both from Columbia, and an AB from Harvard. He clerked for Judge Carlos T. Bea on the Ninth Circuit, and was then appointed as an Academic Fellow at the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard. Nicholson teaches patents and health law and studies life science innovation, including big data and artificial intelligence in medicine. He recommends reading Bujold, Jemisin, and Older. His work has appeared in Nature, Science, Nature Biotechnology, the Michigan Law Review, and elsewhere. Nicholson is cofounder of Regulation and Innovation in the Biosciences, co-chair of the Junior IP Scholars Association, and a Core Partner at the University of Copenhagen’s Center for Advanced Studies in Biomedical Innovation Law.

Patent trolls/Monetizers/PAEs/NPEs and Bio/Pharma

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By Nicholson Price

There’s recently been a lot of focus on patent trolls (so called by those who dislike them; they’re also known as patent assertion entities, nonpracticing entities, and monetizers, each with slightly different definitions; I describe them a bit more after the fold*): there have been Congressional hearings, a bill passed in the House, White House statements, state legislation, and quite a bit of academic attention.  Most attention, though, assumes this is mostly an issue for the high-tech and software industries; in particular, it’s usually assumed that the biotech and pharmaceutical industries are insulated from the phenomenon.  Robin Feldman (at UC Hastings) and I decided to reexamine that assumption, and argue in this piece that the conventional wisdom is wrong, and that biopharma is a relevant target for monetizers.

The basic argument of our piece is as follows: conventional wisdom holds that pharma need not worry about monetizers: even though patents are very important for drug companies, each drug is usually covered by just one or a few patents, and the company either owns them or has licensed them; otherwise it wouldn’t make the drug.  So there just aren’t patents out there that can be asserted; ergo, no monetizer problem.  And indeed, there hasn’t been much action so far.  We point to three challenges to this wisdom: (1) regulatory oversight increases the costs of inventing-around an asserted patent; (2) monetizers are spreading past low-hanging fruit; and (3) the business of selling drugs involves much more than just coming up with an active chemical compound, so that “much more” is still vulnerable to monetizers.  But the main thrust of the paper is against the assumption that there aren’t assertable patents out there.

We thought the patent holdings of universities would likely include lots of patents that might be used by monetizers against pharma, and we were right.  In a deliberately light skim across patent holdings of 5 major research university systems, we easily found many such patents.  The paper describes multiple different categories of patents that could be used, and provides examples of each.  We didn’t aim to be exhaustive, just to point out that the issue is a relevant one to biopharma (whatever you think of trolls), and that that industry should be taken into account–and should participate–in the policy debates about what happens next.  Read More

More on drug quality: India

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By Nicholson Price

The New York Times had a troubling piece this weekend about major problems in drug quality in India, where FDA Commissioner Margaret Hamburg is visiting to discuss safety issues. India makes 40% of the U.S.’s generic prescription and over-the-counter drugs.

Quality issues seem to be unfortunately common (though of course there are many top-quality manufacturers and plants as well).  Half of all the FDA’s drug-related warning letters last year were issued to Indian plants, and recently popular drugs (including Neurontin and Cipro) have been banned from the United States if they’re manufactured in India.  Part of the explanation is differing standards for different markets; manufacturing standards are higher for the U.S. than for India, but the same companies are doing the manufacturing, sometimes at the same plants. Problems aren’t just about quality control in the plants – there are also major concerns with fraud.  In a particularly harrowing situation, “One widely used antibiotic was found to contain no active ingredient after being randomly tested in a government lab. The test was kept secret for nearly a year while 100,000 useless pills continued to be dispensed.”

(If you’re interested in pharmaceutical counterfeiting and are in New England, there’s what promises to be a terrific conference on pharmaceutical counterfeiting at UNH School of Law in Concord, NH on February 19 and 20; details are here.) Read More

Drug shortages continue: new report

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By Nicholson Price

The GAO released a report yesterday on the continuing problem of drug shortages, which unfortunately seem like they’re becoming a permanent part of the U.S. healthcare system.  Hundreds of drugs have at least temporary shortages–456 in 2012. The majority of drugs facing shortages are sterile injectable drugs, including some cancer drugs which have become part of the standard of care and other staples like nitroglycerin and basic IV fluids.

Although the FDA has increased powers to deal with drug shortages under the Food and Drug Administration Safety and Innovation Act of 2012 (FDASIA), those powers are still quite limited.  Manufacturers are now generally required to report shortages in advance to the FDA (previously only some types of manufacturers were so required), and the FDA can try to help.  But the FDA cannot require manufacturers to make drugs if they choose not to, and can offer little in the way of incentives to encourage them to continue making drugs or to increase production.

The causes of drug shortages are complex, and include regulatory, technological, and economic aspects.  A 2013 paper by FDA officials identified manufacturing quality problems as the single biggest proximate cause of drug shortages, and I’ve argued elsewhere that these quality problems stem from a lack of innovation in drug manufacturing.  Though FDA will do what it can to try to decrease shortages, it seems to me that without addressing the root causes (poor quality and relatively uncontrolled drug manufacturing, in addition to challenging–and linked–economic dynamics), we’re likely to see drug shortages continuing for a long time.

Three Parents and a Baby

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By Nicholson Price

There’s an interesting post up on the New York Times’ Well Blog about children with three biological parents—in this case, three genetic parents.  Here, a mother and a father provided chromosomal DNA (i.e., the standard 23 chromosomes from each leading to the diploid 46 chromosomes), and another woman provided the egg, which included DNA found in the mitochondria (the “powerhouses of the cell” which are found in the cytoplasm of the egg).  The idea behind this practice is that women with problems in their mitochondria can still have healthy children with their own genetic material.  While it’s not that unusual to talk about children with three biological parents (two genetic and one gestational, as happens frequently with a surrogate mother or egg donor), we don’t often think on examples with three genetic parents (and the potential for a fourth biological (gestational)).

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Great piece on ER pricing

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By Nicholson Price

The New York Times has posted another installment of its excellent series, “Paying Till it Hurts,” by Elisabeth Rosenthal, this time on the astonishingly high costs of emergency room visits.  The piece is worth a read in full for its infuriating detail—really, I think the whole series is—but the message is pretty clear.  I’d also be remiss in not noting that the basic message, with its own set of excruciating details, was laid out in Steven Brill’s piece in Time magazine back in March.  But it’s such a big issue that it deserves this kind of attention.

The basic point is that the costs charged by hospitals are incredibly high, highly variable, and invariably opaque.  Hospitals price procedures, products, and everything else based on the typically secret (but not in California!) “chargemaster,” which lists sticker prices for everything.  Hospital executives speaking about the chargemaster say no one pays sticker price.  That may be true, but the discounts from sticker are almost totally opaque, which hampers the market’s cost-checking role (the Times piece describes Sutter Health contracts as having “gag clauses” so that insurers who negotiate with Sutter can’t tell the employers who are paying for the insurance what rates have been negotiated).  In addition, lots of locales are dominated by one or two hospital systems, which consolidate then raise prices without worrying much about competition.  Finally, most people aren’t comparison shopping for an ER visit anyway – even if they could.

The effect of opacity and consolidation looks to be pretty regressive—even if no one plays the sticker price, the people paying closest to it are those without insurance, who have no prenegotiated discounts and no one to argue on their behalf.  Cal. Pacific’s CEO, Dr. Warren Browner, argues for opacity for pseudo-progressive goal of fleecing rich foreigners (“You don’t really want to change your charges if you have a Saudi sheikh come in with a suitcase full of cash who’s going to pay full charges.”), but that seems a lot rarer than near-poor coming in to ERs uninsured and getting billed full fare (especially if, a la a certain recent presidential candidate, ERs are our health care system for the uninsured).

As in the rest of the US health care system, higher costs appear to be totally divorced from quality of care or outcomes (national variation here (pdf), international comparison here).

It’s hard to see what effect PPACA/ACA/Obamacare might have on this problem.  The Independent Payment Advisory Board has lots of power (or will once it has members), but is still Medicare-focused.  Cost-savings in Medicaid or Medicare payments might spill over into the private insurance market, but if the opacity and market power mechanisms remain, it’s not obvious to me how and why that would really happen.  Medicare is already paying by care episode much more than private insurers, who are still usually fee-for-service.  More competition and transparency might help (More vigorous antitrust enforcement?  Required disclosure of billed/paid costs? (maybe, but maybe not)).  Maybe the fact that more people will be insured will make a difference; if the biggest burden is borne by the uninsured, who have little leverage, lowering that numbermight lower the burden.  But it could also just make it even more unfair for those who remain outside the system.

[UPDATE 12/5/13: I missed Section 9007 of the act, which requires charitable hospitals to publish their chargemasters and prohibits charging chargemaster rates to individuals who qualify for financial assistance (instead, they’d be charged insurer-negotiated rates).  Unfortunately, the implementing regulations haven’t been promulgated by HHS or Treasury, so these provisions aren’t yet applicable.  But eventually they may help, once they’re implemented.  Steven Brill has a piece on this here, and Sarah Alder here.]

In any case, the Times piece is worth a read.  And so are the previous four entries (on colonoscopies, pregnancy, joint replacement (with a nice discussion of medical tourism), and prescription drugs).

Significant paper on GMO food risks retracted

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By Nicholson Price

In the debate over whether genetically modified organisms should be allowed in the food supply or labeled when they’re used, a central question is whether GMOs are any more dangerous to people eating them than other foods.  This is far from the only concern raised by GMOs—that list includes things like the dangers of pervasive monoculture over diversity, intellectual property issues about crop ownership, the loss of traditional food sources, and the unintentional spread of modified organisms—but it’s a big one, and a major lever of consumer engagement.

In this debate, a significant piece of evidence frequently cited by the anti-GMO camp was a 2012 study by Seralini et al. that rats fed Roundup-ready corn were more likely to develop cancers (Roundup-ready corn is sold by Monsanto and is resistant to its popular herbicide Roundup).  I say was because the journal, Food and Chemical Toxicology, has just retracted the paper.  The paper was hugely controversial—which certainly isn’t justification for retraction—but that controversy prompted the editors to take a closer look at the raw data, after which they concluded that the number of rats studied was too low to justify the paper’s conclusions.

This episode unfortunately illustrates, among other things, the problems with intense media attention to early scientific reports, and with research-as-weapon rather than research-as-information.  Part of the hubbub came from the draconian embargo imposed on journalists before the article was published: because journalists weren’t permitted to seek any independent evaluation before publication of the article, many media reports ran enthusiastic coverage of the article before the scientific community started pointing out the many flaws in the research.  The eventual feedback from the scientific community—part two of peer review, when publications are criticized in the literature and addressed by letters and other publications—was certainly powerful, and led to the retraction.  But that doesn’t change the fact of its initial publication, and I’d bet quite a bit that the article will be cited for years to come as evidence that there’s not scientific consensus on this issue.  In fact, in a depressingly unsurprising development, Seralini is threatening to sue the journal over the retraction.

(For more on GMOs on Bill of Health, Kuei-Jung Ni just posted about the failure of the GMO-labeling initiative in Washington state, Glenn Cohen has written on the frankenburger, and I’ve written briefly about GMO crops spreading and intellectual property issues with GMO seeds.)

GIM: Informed consent for return of incidental findings in genomic research

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By Nicholson Price

In the second installment of our new collaboration with Genetics in Medicine, we are highlighting an article released last week discussing informed consent for the return of incidental findings in genomic research.

As whole-genome and whole-exome sequencing become increasingly common in medical research, the potential grows for identifying genetic findings that are unrelated to the main focus of the study (often called “incidental findings,” or “IFs”).  There is substantial debate about the duties associated with incidental findings, including whether researchers should or must search for them under ethical or legal frameworks, and whether and how to return the results to research participants.  One understudied aspect of the issue, though, is how informed consent should be obtained for the return of such findings, and this paper begins the task of addressing that question. Read More

Foodborne illness and the government shutdown

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By Nicholson Price

This story is still developing, so this post will just be a quick pointer.  You may have seen news stories about how FDA isn’t inspecting foods, and 90% of seafood isn’t getting inspected.  And these are all worries about problems that we think might happen.

Well, the problems have started.  Salmonella-contaminated chicken has sickened 278 people across 18 states.  The USDA’s Food Safety and Inspection Service (FSIS) is still operating as an excepted activity (pdf link, see page 2), and has announced the outbreak but the CDC may be unable to do interstate surveillance of the outbreak (exactly what CDC is able to do during the shutdown is a bit unclear).  And FSIS only covers meat, poultry, and eggs.  FDA, which inspects most other foods, won’t be doing so as long as the government is shut down.

And for folks who happen to go to the USDA site looking for answers (as opposed to linking right to the FSIS), they’ll get this message: “Due to the lapse in federal government funding, this website is not available.”

Praise for Price’s “Making Do in Making Drugs”

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Check out this nice write up of PFC Academic Fellow Nicholson Price‘s paper, Making Do in Making Drugs: Innovation Policy and Pharmaceutical Manufacturing, over at the Written Description IP blog.  Says blogger , “Price’s paper leads to a host of new and interesting questions, and his thorough research revealing potential shortcomings of the FDA approval process is likely to be very useful . . . .”