September 25, 2018 at 5:00 am ET
There is wide agreement that some drug prices, particularly new discoveries, are expensive. There are multiple reasons for this, and some reasonable remedies have been put forth by people on all sides of the debate.
One way not to fix this problem is by stealing intellectual property.
Like it or hate it, the pharmaceutical industry is one of the last areas of American commercial and research superiority in the world. The industry, for whatever its faults, provides millions of high-paying research and manufacturing jobs in all regions of the United States.
In our rush to contain pharmaceutical costs, we have to avoid measures that kill the industry. One of these is so-called “compulsory licensing,” which essentially expropriates American intellectual property by refusing to allow the sale of any products in countries unless they allow knockoffs to be made locally. Russia, for example, brazenly breaks temporary patent protections that drive development of new medicines. Counterfeiters in India and China routinely knock off drugs discovered in America — endangering health and lives.
The experience of the few countries that have actually compulsory licensed new medicines should give everyone pause. Compulsory licensing does not necessarily deliver fast access to medicines at the best price.
When Brazil issued a compulsory license for a medicine in 2007, it took two years for a local drugmaker to start producing copies.
Late last year, the Colombian government launched a process that could lead to compulsory licenses for all hepatitis C treatments. Other health policies have already cost Colombian patients. The number of clinical trials tumbled from more than 100 in 2012 to just 40 in 2017. Breaking patents will only make things worse.
In Chile, lawmakers are also pressing President Sebastián Piñera’s new government to compulsory license hepatitis C treatments. No other country in Latin America conducts more clinical trials on a per-capita basis than Chile, raising concern that this challenge to patent protections will stifle drug development as it has in Colombia.
In the United States, by contrast, after the first hepatitis C drug was introduced, it took less than a year for other companies to introduce rival products that competed on price and clinical benefits. As a result, hepatitis C treatments are less expensive in the United States than any other Western country, according to data from the country’s largest pharmacy benefit manager. Evidence from Europe tells a similar story.
Some members of Congress now want the United States to follow the example of Russia and Colombia. Recently, legislation has been introduced that would not only break patents on new medicines but also eliminate other statutory protections that promote and protect health care innovation — from incentives for the discovery of rare disease treatments to safeguards for sensitive clinical trial data.
Actions like this will undercut our existing pipeline of groundbreaking treatments — and harm America’s innovative economy. Today, the United States leads the world in biopharmaceutical research and discovery, accounting for more than half of the world’s new medicines. Effective legal protections are a big reason for that advantage.
Bashing the American health care system has become a popular pastime for politicians from both parties, and there are certainly areas where we could benefit from vast improvements. But there is a reluctance among politicians to do real reforms, such as movement away from a fee-for-service medicine toward one focused on outcomes, which would finally convert our illness-based health care system into a wellness-based system.
Our task is to convince politicians to get serious, take the risk of making real changes and have less focus on bashing politically convenient targets with poorly thought-out solutions because it is the easy way out. America has the best research institutions in the world and an unrivaled investment pipeline, both of which attract top talent to develop the next generation of medicine. And the American health care system is much too expensive at nearly 18 percent of the gross domestic product.
What we need is real comprehensive reform that changes behavior inside the system from top to bottom. Making it easier to steal American intellectual property is not part of that reform.
Howard Dean is a physician, the former governor of Vermont and an adviser to Dentons, and the views expressed are his own and do not necessarily reflect the firm or its clients.
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