Institute for Policy Innovation: Pot Calls the Kettle Black: Patent Protection for BAM Members but Not for Drug Companies?

Business Editors & Health/Medical Writers

DALLAS--(BW HealthWire)--July 25, 2002

IPI:

Setting the Stage:

It's the old story of the pot calling the kettle black, but played on a new stage: companies with patents trying to weaken the patents of other companies.

Characters:

GM, Kodak, Motorola and other members of the Business for Affordable Medicine (BAM) vs. drug companies.

Opening Scene:

Patents play an important role in any company- including BAM members - who aggressively defend their intellectual property as much as do drug companies.

In fact, according to the U.S. Patent and Trademark Office in 2001:

-- Motorola was granted 778 patents and ranked 19;

-- Kodak was granted 719 patents and ranked 20; and

-- GM was granted 176 patents, ranking 93-- about the same as Pfizer and Merck.

The Plot Thickens:

BAM members want to amend the 1984 Hatch-Waxman Act in order to gain access to cheaper generic drugs sooner. But their scheme would have the effect of weakening drug company patents.

Yet all the while, BAM companies aggressively defend their own patents: GM has litigated 11 cases, Kodak 11 cases and Motorola 14 (according to a non-exhaustive search).

BAM claims amending Hatch-Waxman would be beneficial - but would it? Since its passage, the generic drug industry's sales have increased from 19% to 47% (volume of drugs sold). Plus, new R&D investment (sponsored only by the "innovator" pharmaceutical companies) has increased more than sevenfold, from 3.4 billion to 23.9 billion.

Closing Act:

"Congress should be very careful about changing the current system of checks and balances, as legislation introduced by Senators Charles Schumer (D-NY) and John McCain (R-AZ) would do," writes IPI visiting scholar Dr. Merrill Matthews.

"Generic drugs play an extremely important role in health care, but they aren't the innovator companies that create, research and market new life-saving drugs. This is a struggle not over lower health care costs, but the constitutional protections provided for innovators. Undermining drug company patents is the first step in undermining all intellectual property."

Standing Ovation?

Not if BAM's efforts prevail. Current actions are sure to weaken patents, increase cost and kill innovation.

This information taken from IPI report: "Patent Protection for Me, But Not for You" Available at www.ipi.org.