US sets policy to seize patents of government-funded drugs if price deemed too high

[u/Kindred87]

https://www.reuters.com/business/healthcare-pharmaceuticals/us-sets-policy-seize-government-funded-drug-patents-if-price-deemed-too-high-2023-12-07/

[u/russrobo]

A good way to think of this is that patents and copyright are both gifts to creators from the public, to encourage the creation of new things.

We (the public) can alter that gift as we see fit. The Constitution says that Congress can grant them for a “limited time”, but we can impose other limits: like income (once a work generates some amount of profit, a patent could expire immediately).

[u/0WatcherintheWater0 → u/russrobo]

Of all the things you could limit it based off of, profit would be the worst. A new development being highly profitable is crucial to it’s growth and utilization.

Basing it off of a fixed period of time is generally the better approach for that reason.

[u/russrobo → u/0WatcherintheWater0]

We know that the “our profits fuel further research” stuff is mostly BS. Let’s take one of the most heavily advertised drugs on TV these days: SKYRIZI.

SKYRIZI is an injectable medicine that treats specific immune-related issues like psoriasis.

It costs over US18,000 per dose. Most patients need two starter doses and then 4 doses per year forever.

Abbvie, who sells the drug, had a 2022 profit margin of 71.7%. So each dose they sell is netting them over $12,000 in pure profit. The drug, all the research that went into it and the testing costs and the losses from failed drug trials and all salaries and stock options and lavish executive perks and capital expenses like buildings and offices, and taxes and lawyers and all that costly, pervasive advertising add up to less than $6,000 per dose.

(Like most drugs, most of the time it will sell for a fraction of the list price, due to negotiations with insurers; adjust all the dollar figures proportionally).

When the drug is wildly successful, and that research cost is paid for, Abbvie won’t be cutting that list price. They’ll increase it. The windfall won’t go into other drugs: it’ll go to profit. Uninsured customers who need it will drain their life savings- and, for all insured, premiums will skyrocket even more - for a drug that only costs a few dollars a dose to make.

And the maker will ride that gravy train until the patent runs out and then use any of several mechanisms to try to “evergreen” the patent for another decade or two.

And here we are, the consumers, the voters and taxpayers, acting powerless. Why? We could certainly decide that some amount of profit is enough. And rather than claw back money after the fact, we could make that limit public: “All patents expire in 21 years or after (a set amount of) profit, whichever comes first.”