Peeling the Onion: How to Promote Pharmaceutical Innovation and Access to Medicine

By Timo Minssen

As mentioned in my earlier blog post, I decided to conclude this year by publishing a introductory speech that I gave on April 14th, 2015 at the 2015 Broad Institute Innovation & Intellectual Property Symposium. The speech was part of the session “Bringing Therapies to the Patients” and introduced a panel-discussion with Entrepreneur and Professors of Law and Business about the failures of the patent system to support new therapeutics. The text is below:

Peeling the Onion:
How to Promote Pharmaceutical Innovation and Access to Medicine

Speaking about frustrations over the IP system in pharmaceutical innovation, sometimes feels like – to lend the words of the late German Nobel Prize winner Günter Grass – “peeling an onion:”

First you are amazed by the number of overlapping layers of interacting laws and regulations and the many aspects of the debate.  However, once you peeled long enough you might start to cry out in frustration about the many misconceptions in the debate and unwanted side-effects of recent political and judicial developments in patent law and pharmaceutical regulation. But there also many opportunities embedded in this complexity.

In both Europe and in the US some of the current frustration can be directly addressed within patent system, which will probably remain the most important incentive for the pharmaceutical industry, pharmaceutical innovation and thus the availability of drugs. However, as we have heard before, it does not all come down to patents. In particular in certain areas of drug development, other legal frameworks and aspects, as well as alternative and complementary innovation models also need to be carefully considered.

Let me therefore start out with a few remarks about what I think could be done within the patent box  before I turn to related issues to be found outside the world of patent law.

Talking from the perspective of a legal researcher specialized in comparative US and European biopharmaceutical patent law and regulatory law, I firmly believe that the checks and balances already existing within the patent system can tackle at least some of the problems envisaged by my colleagues, as long as they are properly and coherently applied within a sufficiently funded and well-designed procedural framework. A stringent application of the patentability requirements contributes to achieving desirable outcomes, such as patent quality and that the scope of protection granted for an invention corresponds to the inventor’s actual contribution to the state of the art based on sufficient human intervention. This in turn may provide justification for the patent system as such in both Europe and the US. The novelty and inventive step/non-obviousness requirements play of course a particularly important role. But also the evolution of the doctrine for utility/industrial application and sufficient disclosure can help us in making sure that patent applications directed to interesting “up-stream” research results (the paint) are not becoming a “hunting license”, but are instead granted for truly useful inventions (the picture).

In that context it can only be welcomed that crucial substantial requirements, such as the European and US assessments of the inventive step/nonobviousness assessment, have both procedurally and substantially become more similar. However, it also became clear that some important challenges and differences still remain: One example, is the current US eligibility doctrine after the confusingly formulated US judgments in Myriad, Prometheus and Alice. Interestingly the European eligibility doctrine is now (still) more permissive with regard to both the patent eligibility of isolated naturally occurring molecules (Art. 3 and 5 of the Biotech Directive) and natural processes/ correlations (the Prometheus patent would most likely have been held eligible but not inventive). At the same time, the European situation is complicated by the patent exclusions (e.g. Tomato and Broccoli cases) and the morality clause (Brüstle and ISCC). Also Europe has become more restrictive with regard to the scope of protection that is made available (Monsanto, national implementations of Biotech Dir.).

So it is an interesting time for comparative studies of patent and regulatory law, as well as for  debating the impact of these developments on the innovation system and access to medicine. As it is demonstrated by the very unfortunate current US uncertainty after the Supreme Court Judgments in e.g. Prometheus, Myriad and Alice, both an overly restrictive or lenient application of the requirements for patents may entail risks for an effective innovation, which should be debated on an international level.

Several other things could also be done, and have been done, on the organizational level, i.e. with regard to improved examining procedures, new software tools, a better transparency of patent ownership and a better collaborations with the scientific community in the prior art searches. So called peer –to-patent projects represent just one example of many opportunities.

Considering the increasing attacks on the patent system it appears to be crucial to communicate the importance of these factors, as well as the rationales and positive effects of stringently and coherently applied patentability criteria to the public and research communities.

Irrespective of this debate, however, it is also important to point out that patent law alone should not and cannot solve problems that it was never created to solve. Just as it is important to monitor the misuse of the exercise of patents rights, it is equally important to avoid misinformation and to base the necessary debates on a proper understanding of the patent and the patent-system. In that context it is important to understand that while patents are certainly interrelated with – and might contribute to – pressing issues such as health care, democratic and ethical concerns, access to medicine (in both developing and developed countries), human rights or competition law etc., patent law is primarily concerned with rewarding and enhancing the creation of useful inventions. It is time-limited, negative exclusionary right, and not an instrument that has been specifically designed to address crucial problems relating to i.a. ethics, health-, competition- and human rights/access policies. This is particularly true for the bio-pharmaceutical sector which is troubled by multifaceted and inherently complex debates that go beyond the horizon of what the patent system should and could achieve.

It has further been revealed by e.g. Ben Roin and in Europe by i.a. J. Laddie (article) and J. Robin Jacob (Angiotech), that by only granting protection to nonobvious inventions, even a more sophisticated application of the patent requirements will leave gaps in the innovation and R&D process that should be filled by alternative forms of protection or governmental involvement.

In my view, reasonable sustainable solutions can therefore only be achieved if changes in patent law and procedure, that should be both coherent with the rationales underlying the patent system and absolutely indispensable for a well- functioning innovation system, are complemented by well-balanced changes on the post grant level. This requires i.a. taking into consideration a more predictable interpretation of research and the so-called “Bolar”- exemptions, compulsory licensing, competition law, procedural changes in patent litigation, the multiple instruments provided by pharmaceutical regulatory law and reimbursement schemes, as well as more elaborated guidelines on new models of cooperation, such as PPPs, patent pools, standard setting, clearing houses or other user generated ordering & licensing solutions. Numerous court decisions,  reports and legislative reform initiatives, indicate that decision makers on both sides of the Atlantic seem to share this view and that they have started to address the future challenges accordingly.

If these changes are conducted carefully and respect the costs and mechanisms that drive successful innovation systems, then modifications of the legal rules on the post-grant and regulatory level might give us an efficient “surgical” tool to carefully counterbalance the potentially negative effects that patents and other IPRs (or the lack of those) might have. However, as it is for example demonstrated by the enormous current activism by US antitrust and EU competition authorities and court in the pharmaceutical sector, the knives should be used very carefully if the patient is supposed to stay alive. Conducting this surgery requires thinking in larger dimensions, i.e. both in terms of the multiple issues involved and with regard to the time frames required for innovation. Only then it will be possible to close the innovation gap – sometimes also referred to as the “Valley of Death”- and to minimize the risk of technological wells running dry for the next generations.

In light of the current paradigm shift in pharma R&D and the massive challenges that the traditional “closed innovation” model of Big Pharma is currently facing, a vigilant re-consideration of all the above mentioned factors both inside and outside the patent law box is more important than ever.

This is also highlighted in recent US and European reports and biomedical innovation initiatives such as, such as the European Innovative Medicine Initiative and the US 21^st century Cures Act. These reports and initiatives regularly emphasize problems with affordable access to truly innovative medicine and the gravity of the challenges that the pharmaceutical innovation is facing. They also warn that “venture capital to start new biotechnology firms and fund innovative drug development activities appears to be declining” and that “many companies are exiting important fields of critical public health need”. Often figures are presented indicating that:

“(d)espite dramatic advances in biological knowledge, the rate of new drugs applications and new drug approvals has remained relatively constant for several decade, total R&D investment by industry in drug discovery and development have grown exponentially.”

Besides identifying key challenges affecting the ecosystem for innovative medicines, these reports usually also identify areas of drug development where economic patent based- incentives may be insufficient to promote efficient investment in innovation and access to medicine, such as with orphan drugs, antibiotics and complex diseases. Also it is typically stressed that the efficacy of translational medicine can only be improved by optimally integrating health care, academia and industry.

More specific recommendations that are frequently proposed include i.a. (1) the improvement of drug discovery, development and evaluation, (e.g. by adaptive licensing); (2) better FDA/EMA management; (3) development of new “push” and “pull” tools to create economic incentives, such as new tax regimes, vouchers for priority review, more governmental involvement, or new and more flexible regulatory exclusivity periods; (4) new models of public-private collaboration; (5) further studies on new incentives to promote drug innovation; and last but not least (6) new performance-based pricing regulation and access-centered innovation models – such as Health Impact Funds.

Some of these proposals have now taken effect in the wake of the US Orphan drug and GAIN acts and corresponding European initiatives for stimulating the development of antibiotics and orphan drugs. Recent statistics show that the industry has responded rather well in some of these areas, so it has been argued that we have reached a turning point.  But are the current market-based solutions truly sustainable and does the bridge over the so-called innovation gap really hold for everybody?

Recent events, such as the dramatic emergency actions taken by the FDA and the EMA during the EBOLA crisis and new appearances of antibiotic resistance due to a lack of use-limitations, have shown that many challenges with regard to clinical trials design and drug evaluation still remain. Also, the costs of developing orphan drugs and the resulting prices enforced within a system of strong market exclusivities might result in obstacles for more sustainable solutions.

Moreover, recent clinical trial transparency initiatives in both Europe and in the US might lead to unwanted side effects for both patients and IP. While the benefits of more transparency cannot be ignored, such as better collaboration and an easier detection of adverse effects or further medical indications, companies that are most suited to develop the new uses towards market approval might find it more difficult to patent new uses due to the publication of the clinical trials data. In Europe and in the US those companies could then still rely on regulatory exclusivities. Yet, at least the European 8+2+1 system is not very flexible with regard to 2^nd and further medical uses developed by the original global marketing authorization holder (+1 year). Moreover, the data is globally available and some countries do not grant this form of protection due to a creative interpretation of the TRIPS treaty and worries about access to medicine.

I am convinced that these developments – in combination with a stricter US and European approach on patent eligibility – will lead to a more pronounced role of Trade Secrets protection with new legislation emerging in Europe. The question is then if this is desirable or if we should better thing about a more flexible, yet predictable regulatory exclusivity system as proposed by Benjamin Roin, myself and most recently Nicholson Price in Harvard Journal of Law and Technology (personalized medicine) and Science (effect of trade secrets in production of biosimilars). It is thus clear that any regulatory and patent policies will have to be further discussed within this bigger picture and in light of such complementary and alternative incentives.

I would now like to conclude my little speech by illustrating how we are actively taking part in this challenge at the University of Copenhagen:

Among other things, we are currently waiting for the results of a major grant application, which I submitted to the European Research Council in February. The PHALANX project does not question the enormous significance and necessity of the patents in pharmaceutical innovation. But it aims to develop a new conceptual framework for complementary and alternative drug development incentives by tackling legal challenges, and exploring new conceptual approaches in emerging areas of innovation. Building upon 4 concrete studies of personalized medicine, orphan drugs and antibiotics, new uses for old drugs, and drug manufacturing, PHALANX would be the first European legal study to broadly conceptualize non-patent based incentives and to test them against new innovation trends, economic studies and principles of good law making.

Moreover, our Centre is heavily involved in 4 big inter-faculty projects exploring global challenges to Biobanking, Personalized Medicine, Synthetic Biology and the governance of large European research infrastructures. We are also collaborating closely with different stakeholders in establishing the Copenhagen Centre for Regulatory Sciences (CORS) at UCPH.

In that regard it appears almost impossible not to be fascinated by the amazing complexity of the technology, the legal rules and the practices that attempt to enhance and regulate pharmaceutical innovation in a utilitarian and safe manner. Perhaps our discussion today will touch upon put one or two pieces of a puzzle, while the optimal solution might consist of thousands of pieces. At the same time, it appears as if it is going to be an eternal puzzle. Perhaps, the complete and perfect solution will never be revealed, since the shape of the perfect solution is continuously shifting in the face of technological, legal, sociological and economic changes and realities.

Thus it is probably better to speak of a calibration process, where the ultimate goal is to find a dynamic and sustainable balance between competing and interacting values, such as access to technology and health care, dynamic and static competition, ethical values legal certainty and practicability, as well as the goal to provide incentives for research for the greatest public good.

Considering global health threats and the rapidly evolving complexity of science and technological applications, which is reflected in an ever more sophisticated network of relevant legal rules and interests, it seems to be increasingly important that interdisciplinary research develops its channels of communication and brings together academics, practitioners, stakeholders, and decision-makers from various scientific fields in order to refine the system both on the pre- and post-grant level. This might make it possible to at least narrow down the amplitude in which the scale should be allowed to swing and thereby to reduce the costs of the system and increase its benefits.

How exactly an optimal balance could be achieved would be the ultimate result. I predict that our discussions today will boil down to a mutual finding that – for some reason – is very common in this area :

“We need more research and evidence!”

Thank you!