Patenting can only ever hurt innovation; monopolies incentivize low-quality medicines, and R&D is feasible without patents

1. Medical research without patents: It’s preferable In this section, we argue that abolishing patents on the results of medical research is not only possible but also preferable. In debates on this issue, it is often declared to be an undeniable fact that medical research without patents is simply impossible. Generally speaking, the actual manufacture of drugs is much cheaper than the research and development (R&D) required to get a drug approved and registered. Therefore, the pharmaceutical industry claims it needs a period of patent protection, usually 20 years, that first, gives them the opportunity to test their drugs and have them approved; and second, grants them an exclusive legal right to sell the approved drugs (or to license others to sell them). The basic claim, then, is that only this patent system allows the pharmaceutical industry to recover its high R&D investments. In this sense, David Resnik writes: If companies could no longer patent products, they would greatly decrease their R&D investments, which would lead to a drastic reduction in the funding for scientific research. Since governments do not have the money that would be needed to compensate for this reduction in private funding, it is likely that scientific research—and the public interest—would suffer greatly. (Resnik Citation2020, 173) Thus stated, this argument applies to all product patents, but it is also frequently used with respect to the patenting of drugs as the products of medical research.Footnote2 The aim of our article is to refute this argument. Briefly stated, our refutation consists of two steps. The first addresses the first sentence of the above quotation. We show that the excessive profits (resulting from highly overpriced drugs) made by the pharmaceutical industries and their shareholders are made possible by substantial public investments. In the second step we argue that the money that will be saved in a system with normal rather than excessive profits can be employed to establish a publicly funded and regulated R&D system for drugs (and possibly for other results of medical research). Thus, our second step explicitly questions the second claim of the above quotation. In an abstract way, the claim that drug research without patents is economically impossible is clearly false. The reason is that, apparently, there is a huge amount of money available that is being paid for our current drugs by governments, insurance companies and individual patients. In principle, this same amount could be spent on the basis of a different system, a system without patents. Of course, in practice the abstract possibility of creating a new public system is not enough. In addition, we have to demonstrate that medical research without patents is scientifically, socially and morally preferable, that it is economically and financially profitable, and that it is socio-politically and organizationally practicable. This section argues for the scientific, social and moral preferability of such a policy change. For this purpose, we provide a concise review of the problems of the current system of drug research, which is strongly dependent on the interests of private, and usually big, multinational pharmaceutical companies. Our review is based on a large body of academic literature that analyzes and critically assesses the role of these pharmaceutical companies. For a start, there are the many general criticisms of the commercialization of medical research. In addition to patenting practices, they address a whole range of dubious aspects of this commercialization. In particular, these studies analyze and assess many cases of the epistemic and moral corruption that occurs as a consequence of conflicts between epistemic and moral standards, on the one hand, and the economic and financial interests and power of the big pharmaceutical companies, on the other.Footnote3 In a recent article, Bennett Holman advocates a balanced overall view of the relations between industry and academia, which takes into account both the more positive assessments by policy researchers and the more critical evaluations by philosophers of science. He is, however, unreservedly negative about the specific case of the past and current impact of pharmaceutical industries on medical research. In this case, “we have in-depth accounts of numerous drug disasters” (Holman Citation2021, 9). To illustrate, consider how Lisa Cosgrove and coauthors summarize the results of their study of the development of vortioxetine, a new anti-depressant. The economies of influence that may intentionally and unintentionally produce evidence-biased—rather than evidence-based – medicine are identified. This is not a simple story of author financial conflicts of interest, but rather a complex tale of ghost management of the entire process of bringing a drug to market. This case study shows how weak regulatory policies allow for design choices and reporting strategies that can make marginal products look novel, more effective, and safer than they are, and how the selective and imbalanced reporting of clinical trial data in medical journals results in the marketing of expensive “me-too” drugs with questionable risk/benefit profiles. (Cosgrove et al. Citation2016, 257) This and many similar studies have been crucial in raising academic and public awareness of the questionable practices of the pharmaceutical industries. However, in addition to these studies we need a more general analysis and assessment of our entire system of drug production, thus including the research, development, manufacture, marketing and sale of drugs. A common claim in support of patenting the results of medical research is that it is the pharmaceutical companies that bear all, or almost all, of the risks and expenses of the system of drug production. Therefore, granting them a monopoly on the sales of approved drugs is seen to be justified. However, a more detailed account of what constitutes this entire system shows that a vast amount of public money is already being invested in this system. Because this fact is crucial for the purpose of increasing general awareness about the urgency of a substantial change in our healthcare policies, we provide a brief sketch of the stages of drug research, development, manufacture, marketing and sales. First, there is the creation and maintenance of a public infrastructure of medical education and research. This is a stage that is usually overlooked in discussions and policies of drug pricing, perhaps for the reason that it is difficult to put an accurate price on having an appropriate infrastructure available. However that may be, the amount of invested public money must be huge (especially in the wealthy parts of the world). Hence these public contributions should not be overlooked, nor, as is usual in mainstream economics, should they be defined away as an “externality” that is irrelevant to the price of the produced goods. Second, this infrastructure enables the actual performance of medical research at (public or nonprofit) universities and research institutes. It includes both basic and application-oriented research. A significant part of this public knowledge is used by pharmaceutical industries in the subsequent stages of the system of drug production. A common arrangement is that public medical researchers who have a promising idea about potential drugs enter into a contract with private companies. A basic element of this contract is the application for a patent that, if granted, will be held by the involved companies. Again, it is difficult to quantify accurately the total public expenses that have facilitated the medical research that is later privately exploited by commercial parties.Footnote4 What we can conclude, however, is that during the past decades the public contributions to early-stage drug research have significantly increased as compared to the private contributions. Consider the following two examples. Mark Robinson has provided a carefully documented study of the development of translational biomedical knowledge in the US between 2003 and 2014. He concludes that in the case of translational medicine (broadly, the research to turn basic science into clinical applications) the partnerships between universities and pharmaceutical companies must be understood as part of a larger strategy of R&D externalization, through which companies could outsource projects onto partners, enabling companies to retain a pipeline of R&D innovation without the costs and risk of executing these projects internally.Footnote5 To a significant extent, this externalization implied the transfer of translational research from the private to the public sector. A similar conclusion is drawn by Irene Schipper, Esther de Haan and Roberta Cowan. Their detailed report focuses on drugs developed with Dutch public money. It provides a wealth of information about the public funding of biomedical R&D in the Netherlands, including a case study of the development of a drug for a type of lymphomic cancer. Their report shows that the strategy of large pharmaceutical companies has been shifting from “Research & Development” to “Search & Development.” That is, these companies are “stepping away from playing a part in early drug development, preferring to leave this phase to universities and publicly funded research institutes.” The conclusion is that these findings “contradict the pharmaceutical industry’s mantra that it pays for all expensive clinical trials” (Schipper, de Haan, and Cowan Citation2019, 10). This brings us to the third stage, the stage of testing the effectivity, safety and possible side effects of potentially useful drugs, usually by means of RCTs (randomized controlled/clinical trials). The estimates of these costs vary widely, in part due to lack of transparency on the side of the pharmaceutical companies. However that may be, what is clear is that these companies try to limit these costs, both with the help of a range of epistemically and morally unacceptable methods (see the literature mentioned in note 3) and by means of their strategy of passing on risks and expenses to the public sector. Fourth, to have their drugs approved and registered for general use pharmaceutical companies need to submit the results of their tests to regulatory agencies. The task of these agencies (for instance, the Food and Drug Administration in the US and the European Medicines Agency in the EU) is to assess the (claimed) effectivity, safety and side effects of proposed drugs. Relevant for our article is that their decision procedures do not take into account the financial aspects of the new drugs and the question of what they add in terms of clinical value. These regulative organizations clearly serve the public interest in the availability of effective and safe drugs. Even if most of their budgets are covered by the fees of their users, the remaining public investments constitute a necessary condition for an appropriate system of selling drugs, which also serves the pharmaceutical industry. The final stage concerns the manufacture, marketing and sale of approved drugs. As in the first stage, there is a substantial public contribution by means of an infrastructure that takes care of the education of physicians, pharmacists and their associated personnel. The general approval of a drug does not tell you when its prescription is appropriate for particular patients. Without the knowledge and skills of physicians and pharmacists (made possible by a publicly funded knowledge infrastructure) a working system of prescribing and selling effective and safe drugs is unthinkable. As a matter of fact, drug producers (and their economic results) depend on such a “market infrastructure” to a much larger extent than most other manufacturers (for instance of soap or chocolate). Their extensive advertising, lobbying, pampering and bribing activities show that pharmaceutical companies are sharply aware of this fact. Therefore, in analyzing and making healthcare policies, this fact should play an equally significant role.