Category: Ryan Abbott

Beyond the Patents-Prizes Debate

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By Ryan Abbott

In Beyond the Patents-Prizes Debate (forthcoming in the Texas Law Review), Daniel Hemel and Lisa Larrimore Ouellette articulate a new theoretical framework for thinking about R&D funding mechanisms. They note that patents, prizes, government grants, and tax credits for research all play an important role in facilitating innovation, although academic literature has disproportionately focused on the role of patents and prizes—this is the first detailed analysis of how tax credits compare as an incentive mechanism.

The Orphan Drug Act (ODA) illustrates how patents, grants, and tax credits can all be used to achieve similar goals. The ODA was passed in 1982 to incentivize R&D on rare diseases. It incorporates several different types of incentives, including direct government grants for research, a patent-like market exclusivity period for approved drugs, and tax credits for half of the cost of clinical research. The ODA has been widely acknowledged as successful. From 1973–1983, U.S. pharmaceutical companies only brought 10 orphan drugs to market. In the twenty-five years since the Act’s passage, 326 new drugs were approved for rare diseases. The ODA was also the model I proposed in an article last year for a new system to boost R&D for evidence-based complementary and alternative medicine (CAM).

Given that all these mechanisms can accomplish the same goal, possibly even with the same costs, and no single mechanism is always more efficient than the others, a framework is needed for determining which incentive is most appropriate for a given goal. The authors do this by providing a structure for balancing the benefits and detriments of each incentive on the basis of who should determine the reward size, when the reward should be provided, and who should pay.

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Of Evergreening and Efficacy, Part III

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By Ryan Abbott

This is the last in a three-part series (Part I, Part II) of posts I’ve written about the case between Novartis and the Union of India, in which the Supreme Court of India denied Novartis a patent for its anti-cancer drug Glivec. Today I’m continuing the discussion of the practical outcome of the case. What effect is the Glivec patent decision going to have on access to medicines in India and other developing countries?

Beyond issues specific to the transition period, the Supreme Court was considering challenges to Section 3(d) of its patent act, which prohibits patents for a new form of an existing drug without a change in therapeutic efficacy. It is designed to prevent evergreening, a term used to label practices where a small change is made to an existing product and claimed as a new invention. When Section 3(d) was enacted in 2005, it was unique to India—there was no analogous provision in any other country.

Novartis had at one point tried to argue that Section 3(d) was unconstitutional under the Indian constitution and non-compliant with TRIPS, but those arguments were rejected by the High Court at Madras in 2007. Novartis did not appeal those decisions. The High Court rejected the TRIPS claim because in India private plaintiffs may not challenge a national law based on its compatibility with an international agreement. However, the court also referred to the Doha Declaration, which affirms that “the TRIPS Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.” This means that WTO members can set their own standards for patent protection within the bounds of TRIPS. Section 3(d) establishes a higher standard for an inventive step, which means that drugs patentable in other countries won’t necessarily be patentable in India.

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Of Evergreening and Efficacy, Part II

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By Ryan Abbott

I wrote earlier this month about the case between Novartis and the Union of India, in which the Supreme Court of India affirmed denying a patent for Novartis’ anti-cancer drug Glivec. Adriana Benedict added an insightful post about the case last week.

In my last post, I talked about the theory behind the decision and what it means for a drug to be therapeutically efficacious. Today and tomorrow, I thought it would be interesting to focus on the practical outcome of the case. In other words, what does this case mean for the access to medicines more generally, both in India and around the world?

Judging by recent public comments, this will be a landmark case. On the Novartis website, where the company is hosting an impressive array of resources devoted to the Glivec patent case, it states that this “decision discourages innovative drug discovery essential to advancing medical science for patients.” Eric Althoff, a Novaris spokesman said, if “innovation is rewarded, there is a clear business case to move forward. If it isn’t rewarded and protected, there isn’t.” On the opposite side of the spectrum, Indian Trade Minister Anand Sharma called the ruling “a historic judgment” that reaffirmed the position of Indian law requiring substantive innovation for patent protection. The Supreme Court itself noted that the “debate took place within a very broad framework. The Court was urged to strike a balance between the need to promote research and development in science and technology and to keep private monopoly (called an ‘aberration’ under our constitutional scheme) at a minimum.”

Despite the controversy, this case won’t necessarily have a wide ranging impact. It involved some unusual elements, which require historical background in India’s patent system to understand.

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Big Data and Pharmacovigilance, Part II

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By Dov Fox

Yesterday, I wrote about Ryan Abbott‘s new article that proposes to use health information exchanges to improve the collection of data about the safety of approved drugs. Today, I want to address his recommendation that the government pay private parties to help the Food and Drug Administration conduct post-market drug surveillance.

The article argues that health information exchanges will make far more data available for observational research, but the current drug regulatory system is not structured in a way that would allow it to use the information effectively. This is because pharmaceutical companies have powerful incentives to emphasize data favorable to their products. (The FDA’s own research is dwarfed by comparison to what industry does and could do, while insurance companies and academics have weaker incentives to investigate.)

So Abbott suggests encouraging private parties to submit evidence that an approved drug is ineffective or unsafe. Under his proposal, if the FDA determines the evidence warrants a change to labeling or approval status, the submitting party would receive a financial prize. Its size would depend on how much the government saved by avoiding the costs of ineffective and unsafe medicines. Abbott suggests that the prize come from taxpayer dollars, unless it’s determined that the pharmaceutical acted negligently (or worse), in which case the company itself would be responsible for paying it.

It might make more sense to put the burden on pharmaceutical companies, even when they haven’t been negligent, given that it’s their products that are found to cause harm. Not only do they have the most opportunities to seek out problems early in testing and development; they are also the parties deriving the most financial benefit from medicine sales. Claims by pharmaceutical companies that they can’t operate with additional costs or regulation sound exaggerated, at least for many of those companies, given that the pharmaceutical industry has some of the highest profit margins of any business sector.

The bounty system nevertheless deserves serious consideration as an innovative proposal for harnessing market-based incentives to improve the regulatory surveillance of approved drugs. And it need not be restricted to health information exchanges. Abbott suggests applying this system to the way agencies deal with scientific questions generally. We might worry competitors might trump up data hostile to approved drugs. The provocative question that Abbott’s article invites us to ask is whether we are better off evaluating medicines under an inquisitorial system or an adversarial system.

Big Data and Pharmacovigilance, Part I

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By Dov Fox

So much new data are created every day that 90 percent of all data worldwide has emerged in just the last two years. This information revolution has the potential, argues Bill of Health guest blogger Ryan Abbott, to transform how we develop new drugs, set clinical practices, and finance health care. His interesting new article paints an alluring “vision of a drug regulatory system powered by big data”:

“When the Food and Drug Administration (FDA) approved the cholesterol-lowering drug simvastatin in 1991, it was based on pre-marketing controlled clinical studies that included a total of 2,423 patients. In 2011 alone, just in the United States, almost a hundred million prescriptions were written for the drug. Imagine the impact of being able to analyze data from every one of those patients to evaluate whether simvastatin is safe and effective.”

The surveillance of pharmaceuticals after they’ve gone to market will matter more and more, Abbott argues, as personalized medicines become more difficult – and perhaps less necessary – to regulate before they’re released. He proposes a new plan for the post-market regulatory system that relies on the health information exchanges (HIE) created by the HITECH and Affordable Care Acts. These exchanges are slated to amass a vast repository of data on individual patients. Their large size and inclusive nature will enable more accurate analyses in observational research, Abbott suggests, and in ways that minimize the bias and selectivity problems associated with current data sets.

There are at least three obstacles to the integration of these exchanges in drug regulation. First, HIEs will be expensive. While the federal government provided considerable funding to get these exchanges off the ground, Abbott recognizes that in order to remain viable, they will probably have to sustain themselves financially. Second, their meaningful impact on post-marketing surveillance will require consistent reporting standards and information-sharing mechanisms. Third are important patient concerns about the privacy of their personal health information. States are experimenting with different patient participation models to address privacy concerns. For example, Abbott notes that in some states HIEs are free to exchange information without patient consent, while in others patients can opt-out of information exchange altogether. Either is permitted by HIPAA, so long as the information is de-identified so it can’t be used to identify individual patients.

Abbott argues that it’s worth tackling such concerns that the adoption of HIEs pose for citizens, policy makers, health care providers, and the health care industry, so we don’t squander the opportunity to use health information exchanges to their full benefit. Public support for data collection isn’t enough. That data must be translated into a format that regulators can use—something I’ll address tomorrow in my next post on the subject.

Introducing Ryan Abbott

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Ryan Abbott, M.D., J.D., M.T.O.M., is Associate Professor of Law at Southwestern Law School. He has served as a consultant on health care financing and regulation, intellectual property, and public health for international organizations, academic institutions and private enterprises including the World Health Organization, World Intellectual Property Organization and University of California, Los Angeles. Professor Abbott has published widely on issues associated with health care law and intellectual property protection in legal, medical, and scientific peer-reviewed journals.

Professor Abbott is a licensed physician, attorney, and acupuncturist. He is a graduate of the University of California, San Diego School of Medicine and the Yale Law School, as well as a Summa Cum Laude graduate from Emperor’s College (MTOM) and a Summa Cum Laude graduate from University of California, Los Angeles (BS). Professor Abbott has been the recipient of numerous research fellowships, scholarships and awards, and has served as Principal Investigator of biomedical research studies at University of California. He is a registered patent attorney with the U.S. Patent and Trademark Office and a member of the California and New York State Bars.

Some of Dr. Abbott’s recent publications include: Read More