Alex Tabarrok calls our attention to prizes as a means to foster innovation in drugs here. In this case, Bernie Sanders has introduced the Medical Innovation Prize Fund Act of 2007 which provides $80 billion a year to pharmaceutical companies to place their patents in the public domain, thus allowing anybody to make the drug. Drugs developed without patents would also be eligible for prize money.

Tabarrok has some doubts about politicization of the awards but comes down in favor. More details on the bill are here

This blog has posted about prizes before. They still seem like a good idea for drugs because of the wide public benefits.

That's what Lara Santoro argues (to which I agree).

Santoro observes -

Countries such as Kenya and Uganda, not to mention South Africa, have not only the manufacturing base needed to copy and reproduce drugs for a fraction of their cost, they also have the right. So what's stopping them? "There is a history of trade pressures," Love said. "Very few countries are willing to face such pressures."

Despite death on an unimaginable scale, talk of compulsory licensing remains anathema in most of Africa, so millions of lives are left in the hands of a well-meaning yet ineffectual group of international donors, whose solution to the problem has been to purchase and distribute generic AIDS drugs made in India and Brazil. It's a noble effort, but with pitiful results. Fifteen years after the invention of antiretrovirals, only one in four Africans has access to them.

But it gets worse. For many of those who survived thanks to first-line treatments, the time has come to switch to newer, less-toxic drugs -- all of them patented, none of them even remotely available. "We're starting from zero again," said Buddhima Lokuge, U.S. manager of Doctors Without Borders' "campaign for access to essential medicines." By the time generic competition kicks in for the newer drugs, millions of people will have died unnecessarily.

Read the whole thing.

According to the Oct. 8 issue of Business Week, drug and medical-device companies give about $19 billion of gifts to doctors annually. Here's the story .

Hey, they gotta do something with those patent-enabled rents besides actual R&D.

Senators Grassley and Kohl want a national registry to record gifts worth more than $25. Why not opt for competition in drug development, starting with abolishing the patent raj?

One trick used by pharmaceutical companies to arbitrarily extend the life of their patents is to come up every ten years or so with small, sometime barely significant, improvements and variations that are recognized by the USPO as new inventions and patented accordingly.

After India, giving in to pharma-lobbying and international pressure from the US and the EU, adopted a new patent legislation that allows for patenting of drugs, big pharma decided to test it to see if the same trick could be played there.

The test was carried out first by Novartis, using the case of a relatively minor (in terms of Indian market size) leukemia drug, called Glivec. Was a small improvements on Glivec patentable in India as a new drug? More importantly, shouldn't the Indian courts order local producers of generic drugs to stop producing the generic version of Glivec and export it worldwide, now that its new version was covered by an Indian patent?

The answer, coming from Madras, is NO: the small improvement does not contain enough innovative content to support the claim for a new patent. Because the original version of the drug goes back to before 1995, it is not covered by an Indian patent and the local producers can continue competing with Novartis worldwide by selling their version of the drug at roughly 1/10 of Novartis' price.

To learn why this is good news not just for people suffering of the particular form of leukemia that Glivec is effective against, but also for a lot of other sick people, read the extended discussion in the excellent NYTimes piece.

This six-volume encyclopedia on pharma technology and regulation looks like it might be the last word on the subject, at least if having everything in one convenient place is the criterion. I haven't seen it and don't know if it covers the patent issue, but it looks worthwhile as a general reference. And at only $3,000 a set, you'll probably want two.

The Economist shows why the pharmaceutical industry is gradually overthrowing its blockbuster model in "Beyond the Blockbuster".

As many of Big Pharma's drugs go off patent, it is becoming increasingly difficult for drug firms to replace their lost revenues and earnings, let alone to meet the market's growth expectations. In 2006 $18 billion in revenues from these drugs disappeared.

That's why they are turning toward targeted therapies that are an important part of personalized medicine. Sales from specialty drugs have doubled since 2000, and were two-thirds of new revenue growth in 2006. Meanwhile only 25 per cent of new drugs treat chronic diseases, which seems to indicate that they are producing more specialty drugs.

A group of institutional investors produced a report questioning the viability of the blockbuster model, and expressing doubt that Big Pharma's business model can produce targeted drugs. Change is in the air.

The Economist reports that countries with major health problems are overruling international patents and switching to locally made generic copies at a fraction of the price link here. "Last month the World Health Organisation passed a resolution supporting compulsory licensing. America objected vociferously, but other rich countries supported the motion." Countries invoking compulsory licensing include Thailand and Brazil, with India, Malaysia and Kenya, making noises about doing so. The Economist notes that these are not poverty stricken countries, to which the generic exceptions are supposed to be limited.

Drug companies are upset, arguing that while compulsory licensing is legal, TRIPS rules allow it only under limited circumstances, such as national health emergencies, and only after they try and fail to negotiate prices with firms.

Benefitting from compulsory licensing is the generic-drugs industry (as well as the consumer, at least in the short run, depending on whether it reduces research on diseases afflicting poor countries). Canada encourages domestic firms to produce copycat drugs for precisely this reason. But their costs are so high that such exports cannot hope to compete with the cheaper pills produced by India. Countries unable to produce generics competitively are allowed to import them.

This story isn't over. Big Pharma is so profitable that it is hard to shed tears for it. Moreover, they haven't been all that eager to develop drugs for poor countries' diseases to date. They have instead been shamed into supplying poor countries when they have already developed the drug for the rich--like AIDS drugs. But the world would be unwise to wait for it to develop drugs for diseases confined to poor areas. Another way has to be found, like the Gates and Buffett initiative.

Former President Bill Clinton has just made a deal to get affordable generic AIDS drugs to patients in Third World countries. Kudos there.

Clinton said, "I believe in intellectual property and ensuring that manufacturers earn the profit margins they need to keep the discovery and supply of AIDS drugs sustainable. But that shouldn't prevent us from getting essential life-saving medicines to those who need them in low and middle-income countries alike."

If that's the case then he should be in favor of more robust IP/patent reform. In order to sustain his goals, he can still believe in some forms of intellectual property restraints, but it is impossible to support the current IP system as presently constituted in order to maximize both innovation and distribution.

A group of Wisconsin researchers have tried to claim that they own broad patents relating to embryonic stem cell research. To grant a monopoly in that key area of research would be catastrophic for scientific and health related advancements. Fortunately, the Patent office has rejected the claim. However, don't give the Patent office too much credit here. This was only done after some public interest groups took the trouble to jump through the bureaucratic hoops and raise a stink about it. (Kudos to the Public Patent Foundation!)

The issue can still be appealed by the Wisconsin group, so be sure to follow this important case closely. The question remains if it will have broader ramifications over the stem cell patent cottage industry.

I seem to recall certain celebrities speaking out against politicians with a restrictive stance on federal funding for embryonic stem cell research (Michael J. Fox, the late Christopher Reeve, etc.). This site is not the proper forum for that particular underlying debate. However, it is notable that like-minded celebrities have never spoken out publicly against overly broad patent restrictions - even though that issue will likely impede progress in scientific medical research more than the position of any politician with regards to the federal funding issue. If these people are truly interested in medical progress (and I presume that they are), they might want to consider speaking up on the issue of patent reform.

Some cynics have accused Fox, Reeve and others of using the stem cell issue as merely a way to score cheap partisan points against Republicans. I never doubted their sincerity on the stem cell issue, but here is a perfect opportunity to prove the cynics wrong. I would respectfully suggest that they start by targeting the current Governor of Wisconsin.

[Michael Perelman previously wrote about another group involved in the Wisconsin patent challenge when it was first filed. Be sure to check it out.]

[Here's an idea for you sci-fi writers out there to explore: What if our current patent system had been in place during the discovery of fire? It would be interesting to try and project the ramifications for today's world.]

Here is a story from the New Scientist. A new drug is discovered that appears to cure cancer. So far, so good. Unfortunately, it is cheap and has no patent. As a result, nobody has an incentive to do tests on it.

Ideally, we need a drug that that can be made expensive.

Here is the article

Coghlan, Andy. 2007. "Cheap, 'Safe' Drug Kills Most Cancers." New Scientist (21 February). link here

"It sounds almost too good to be true: a cheap and simple drug that kills almost all cancers by switching off their 'immortality'. The drug, dichloroacetate (DCA), has already been used for years to treat rare metabolic disorders and so is known to be relatively safe. It also has no patent, meaning it could be manufactured for a fraction of the cost of newly developed drugs."

"Evangelos Michelakis of the University of Alberta in Edmonton, Canada, and his colleagues tested DCA on human cells cultured outside the body and found that it killed lung, breast and brain cancer cells, but not healthy cells. Tumours in rats deliberately infected with human cancer also shrank drastically when they were fed DCA-laced water for several weeks."

"DCA attacks a unique feature of cancer cells: the fact that they make their energy throughout the main body of the cell, rather than in distinct organelles called mitochondria. This process, called glycolysis, is inefficient and uses up vast amounts of sugar."

"Until now it had been assumed that cancer cells used glycolysis because their mitochondria were irreparably damaged. However, Michelakis's experiments prove this is not the case, because DCA reawakened the mitochondria in cancer cells. The cells then withered and died."

"Michelakis suggests that the switch to glycolysis as an energy source occurs when cells in the middle of an abnormal but benign lump don't get enough oxygen for their mitochondria to work properly. In order to survive, they switch off their mitochondria and start producing energy through glycolysis."

"Crucially, though, mitochondria do another job in cells: they activate apoptosis, the process by which abnormal cells self-destruct. When cells switch mitochondria off, they become 'immortal', outliving other cells in the tumour and so becoming dominant. Once reawakened by DCA, mitochondria reactivate apoptosis and order the abnormal cells to die."

'The results are intriguing because they point to a critical role that mitochondria play: they impart a unique trait to cancer cells that can be exploited for cancer therapy,' says Dario Altieri, director of the University of Massachusetts Cancer Center in Worcester."

"The phenomenon might also explain how secondary cancers form. Glycolysis generates lactic acid, which can break down the collagen matrix holding cells together. This means abnormal cells can be released and float to other parts of the body, where they seed new tumours."

"DCA can cause pain, numbness and gait disturbances in some patients, but this may be a price worth paying if it turns out to be effective against all cancers. The next step is to run clinical trials of DCA in people with cancer. These may have to be funded by charities, universities and governments: pharmaceutical companies are unlikely to pay because they can't make money on unpatented medicines. The pay-off is that if DCA does work, it will be easy to manufacture and dirt cheap."

"Paul Clarke, a cancer cell biologist at the University of Dundee in the UK, says the findings challenge the current assumption that mutations, not metabolism, spark off cancers. 'The question is: which comes first?' he says."