26 March 2010

Patent system really has had its days?

My colleague Axel Horns, author of the popular IP Jur blog, has drawn my attention to the astonishing Guardian article "patent system has had its days" of Philip Soos, who considers himself an "intellectual property rights researcher".

Mr Soos is very concerned about pharmaceutical patents not only because of their enormous "tangible cost facing consumers and taxpayers, [including e.g.] expenditures for the patent office, patent enforcement, the judicial system" but primarily due to "numerous intangible costs, [such as] misdirection of R&D toward copycat and lifestyle medicines, corruption of journals, fraud, transaction costs, litigation, anti-social behaviour, high-pressure advertising, conflicts of interest within the medical profession, counterfeits" and since "the deaths caused by the patent system [...] is likely to number into the millions".

His straight forward suggestion for a "solution to this mess" is based on Dean Barker's 2004 study on "four alternatives to patent-financed prescription drug research",  who, in turn, referred to left-winged Congressman Dennis Kucinich's earlier proposal to finance pharmaceutical research through a set of competing publicly supported centers ("The free market drug act of 2004"). Mr Kucinich claims himself to have, inter alia, authored and co-sponsored legislation to create a national health care system and lower the costs of prescription drugs, and recently was accused by the New York Times to prefer a "fully government-run, Medicare-for-all approach".

From Mr Kucinich's ideas and Mr Barker's follow-up study, which in the six years from its publication did not receive too much attention, Philip Soos basically learned that instead of using "a 15th century medieval economic system [...] to finance R&D in the 20th and 21th century" 
the government should directly perform the R&D as a public good and let firms produce medicines, as a private good, at competitive free-market prices.
For obvious reasons, this approach is also liked very much by the (Swedish) pirate party.

While Mr Kucinich's original proposal does not appear to be public on the internet, the cited study of the "Center for Economic and Political Research" (CEPR), a Washington-based think tank, sketches a far more balanced and less revolutionary approach than one would expect from Mr Soos's "solution to this mess":
The proposal by Dennis Kucinich establishes a set (e.g. 10) of publicly funded research corporations to conduct drug research. [...] The corporations would each fund research, under an obligation to make all findings fully public in a timely manner, and would place all patents in the public domain. [...] Existing drug patents would remain in effect (although it does not preclude price controls or parallel imports), and pharmaceutical companies could still obtain new patents. However, they would run the risk that the new drugs they develop would be competing with comparable drugs that are being sold as generics.

The Kucinich system relies on competition between the government research agencies –with the threat of being dissolved due to poor performance – to ensure that research dollars are allocated efficiently. However, if some, or most, of the agencies are poorly managed, and/or the review commissions are incapable of effectively evaluating each corporation’s performance, then there is a risk that the research funds will be inefficiently allocated for sustained periods of time. Kucinich does not require eliminating the current patent system, if the public agencies did not pursue a particular line of research, presumably private drug companies would fill the gap.
And further, regarding the essential point of political interference in pharmaceutical research, Mr. Barker clearly sees the risk
that political factors will directly affect the direction of research. [...] The interference could either take the form of imposing inappropriate values on the process (e.g. downgrading the value of new contraceptive pills/devices) or using political connections to influence the process. An example of the latter would be using political connections to increase the effectiveness rating of a particular drug. For example, Congress could prohibit the funding of research into certain areas. Also, there would always be the possibility of using political connections to steer research funds to particular researchers.
Now, there appears not to be much left of Mr Soos' snappy interpretation of the Kucinich approach on funding pharmaceutical research. He is so enthusiastic about the idea of state-run R&D as public good, that he does not hesitate to equally suggest his solution for "software, journal, textbook, book, game, comic, film and fashion industries", completely disregarding the fundamental differences of the products of such industries over pharmaceutical products. Ms Soos' economic vision would in fact be the end of our present free market economy and would certainly not represent something new and modern, but, at best, another variation of socialistic economy - which, if comming true, meant that not only the patent system has had its days.

Before publishing striking articles, Mr. Soos should have better done some profound investigation on the approach he supports, and especially he should have considered Mr Barkers warning that his
assessment is obviously preliminary – and certainly does not consider all relevant factors, hopefully it will stimulate further discussion of the merits of these four proposals, as well as contribute to the development of other alternatives to the patent system.
Instead of contributing to the discussion, which of course would be much appreciated, Mr Soos not only took the Kucinich approach at face value without any critical review and, rather naively, published popular and oversimplified theses in the Guardian. Frankly speaking, the article does neither qualify Mr. Soos as an sufficiently accurate journalist nor as a serious intellectual property rights researcher, as which he apparently likes to be seen. In fact, in view of this article, one does not immediately feel the desire to learn more about Mr Soos' activities and expertise in the field of IP research, which, however, would not be not too easy anyway, since a google search does not reveal any related work.