Patents are worse for biotech.

Patent law in the United States is historically premised on advancing the interests of society. From the store of productive activity available to all, the government restricts some activities for a limited time in hopes this will redound to the benefit of all by incentivizing innovation1. The law thereby restricts competition, forgoing the concomitant advantages of the free market, but only during the patent period. After that time, the law expects that competition will enter, driving down prices and spurring new innovation. From this perspective, US patent law centers on the benefit to the public, with the inventor’s reward providing the vehicle for accomplishing this jurisprudential goal.

In the health care space, these incentives have resulted in extraordinary success stories, but the same incentives can also result in a range of undesirable consequences, including excessive development of similar (but not better) products (‘me-too drugs’), the focus on drugs for diseases that affect wealthy people and wealthy countries rather than diseases that disproportionately affect the poor and developing nations, and a lack of innovation for types of medicines that may return fewer profits, such as antibiotics2,3,4. Similarly, drug companies will not research the utility of a known (and hence unpatentable) chemical, since the ability to obtain patent protection is central to their business model5.

Past literature has highlighted these problems but has largely overlooked the problem of ‘negative innovation’, in which patent law drives innovation into spaces that are affirmatively harmful to patients. By this, we mean scenarios whereby patents create incentives to bring a product to market in a way that is relatively harmful to consumers, and the existence of a patent (and the associated rents) discourages the patentee from taking steps to improve the product so as to prevent the adverse health outcomes.

Of course, there are other patent-driven situations of problematic utility, including scenarios that result in purely financial harms, such as drugs that are no better than existing options but are more expensive; scenarios where a small, heightened risk of direct physical harm is offset by lower prices for the drug in question6; and scenarios where there is no existing product on the market and inadequate incentives to develop such a product, so any physical harm is the result of the underlying disease or illness7. Finally, there is a general concern that inadequate new information about existing products is generated in the current system8. All of these scenarios are different in kind from negative innovation, which results in a harmful (but profitable) product. We focus on this dangerous but overlooked space of the patent landscape, wherein patents themselves lead fairly directly to patient harm.