Pharmaceutical companies are among the loudest voices lobbying in favor of strong patent protections. Holding the exclusive right to market a product, without which many people will suffer or die, means big profits for a company unhindered by competitive pressure. While no one is saying drug developers shouldn’t be able to reap the rewards of their research, there is a distinction between using the legal system to protect an investment, and using it to shut down competition and deliberately keep prices high.
The aspect of the Trans Pacific Partnership I always found most troubling was the way in which it attempted to export some of our bad intellectual property laws — crafted at the behest of lobbyists — to other countries that would have been unable to afford such provisions. A key example of this is the process known as “evergreening.”
When intellectual property laws are used as a tool to shield companies from competition and keep prices high, it is the consumers who lose.
Evergreening is the term for when a patent holder makes a small adjustment to a product in order to claim it as a new invention, thereby extending its patent length. A clever company can exploit this loophole indefinitely to ensure that a product never enters the public domain, and is thus never subject to competition. The Trans Pacific Partnership would have allowed this practice to be protected in partner countries, where the need for affordable medicine is even more pressing than in the U.S. Now that TPP is dead, however, President Trump should look at ending evergreening here at home, so that more generic drugs can come to market and medicine can be made more affordable for consumers.
Another thing the TPP sought to do was to extend patent lengths to compensate for the long process of regulatory review. While regulatory delays are indeed a problem, the solution is not longer patens — which only drive up the costs of drugs — but rather regulatory reform that can put pharmaceuticals on the shelves more quickly. Patent terms already last for an extremely generous 20 years. While pharmaceutical companies no doubt would love longer patent durations in order to capture more profits, reducing the regulatory approval time not only speeds up delivery to consumers, but also gives developers more time to sell their products before generic drugs are permitted to enter the market. It’s a win-win policy that should be embraced as soon as possible.
If Trump is serious about lowering drug prices, he should not only look at modernizing and streamlining the FDA, which would reduce approval times, but also at the much neglected area of patent reform. When intellectual property laws are used as a tool to shield companies from competition and keep prices high, it is the consumers who lose. In the case of prescription drugs, that loss can be a costly one indeed.
Logan Albright is a researcher for Conservative Review and Director of Research for Free the People. You can follow him on Twitter @loganalbright73.