Six years from now, when my daughter turns 11, she will get a three-part human papillomavirus vaccine that will reduce her chances of getting cervical cancer by around 70 percent. Currently a little over half of American girls get the HPV vaccine, a public health intervention that will prevent tens of thousands of cancers. It’s one of modern medicine’s few success stories in finding a means of preventing cancer.
Maybe the reason we have so few cancer vaccines is that they’re harder to develop than treatments for patients who already have cancer, which are more common. But in an as yet unpublished study, economists Eric Budish and Heidi Williams teamed up with patent lawyer Ben Roin to argue that the scarcity of preventive measures and relative abundance of late stage cancer treatments can also be blamed on the distorting effects that the U.S. patent system has on medical research.
The duration of patent protection in the U.S. is 20 years. All drug innovations get patented at the time of discovery, but late-stage cancer treatments will work their way through the clinical trials required for FDA approval much more quickly, since the effect on patient survival will be apparent within a couple of years. That means fewer years of the patent clock ticking without revenues coming in. For a preventive treatment like the HPV vaccine, the 20 years of patent protection will be long expired before any clinical trial can show whether lives are being saved, which in turn makes vaccines far less alluring investments for biotech companies. It’s yet another indication of America’s patent system’s desperate need for a makeover.
To appreciate what’s wrong with the American system of granting fixed-length, 20-year patents, you first need to understand why we grant patents—and make them expire—in the first place. A patent gives an inventor ownership over her intellectual property, in much the same way a homeowner holds title to her house. This affords the inventor a period of exclusive rights to profit financially from the fruits of her innovation. Without this protection, who would go through the time and trouble of inventing anything in the first place, when someone could just take the idea and run with it?
At the same time, this license to exploit an idea for private gain needs to be balanced against the social benefits that come with universal access to new knowledge. After a patent expires, other innovators can build on earlier breakthroughs and competitors can market similar products without worrying about licensing contracts, patent litigation, or other headaches. The need to encourage invention and to let ideas be free leads to the compromise of giving patent protection for a limited period of time. Thanks to patent protection, we have biotech companies that spend billions developing next-generation drugs, and thanks to patents’ limited lifespans, we have generic manufacturers waiting to rush in with lower prices as soon as the patent ends.
The authors’ argument for how fixed patent terms distort R&D is simple. In most cases, inventors need to file for patents early on in the process, before they even enter trials, lest word get out and competitors beat them to the patent office. Consider a drug that takes two years to bring to market. Given our 20-year patent term, the drug’s manufacturer would get 18 years of patent protection after the drug goes on sale. Now consider a drug that takes 18 years to bring to market. Its manufacturer would get only two years of protection once it hits the market. For drugs that take more than 20 years to develop, there won’t be any post R&D patent protection at all.
The heart of the new study shows how these incentives have affected biomedical research in America over the past few decades, with a focus on cancer. Why cancer? Obviously, given the suffering caused by the disease, we care a lot about anything that might be holding back the development of better treatments. And if you’re interested in the connection between time to commercialization and biotech investments, cancer affords an additional set of advantages. The lag between invention and going to market is dictated primarily by the length of trials required for Food and Drug Administration approval, and trial length, in turn, is determined by patients’ survival rates. Generally, to get approval for a new cancer drug you need to show that patients live longer. It doesn’t take long to determine whether a new treatment adds months of life in the case of metastatic cancers (those that have spread throughout the body): 90 percent of patients with such cancers are dead in less than five years. But it can take more than a decade to see whether survival is affected for localized cancers that remain confined to a single organ. And for treatments aimed at cancer prevention—the holy grail of cancer research—it could take multiple decades to prove a treatment’s efficacy.
Using records from the National Cancer Institute, the authors link data on survival rates by cancer type (e.g., prostate) and stage (i.e., local versus regional versus metastasized) to clinical trial data on treatments targeted at a particular stage-type (e.g., metastatic prostate). They find that there are many more trials for deadlier cancers, a pattern that persists after they account for other considerations such as the frequency with which a cancer occurs or the type of individual (gender and age) most likely affected by it. Their calculations indicate that a 10 percentage point increase in the five-year survival rate of a given cancer type leads to an 8.7 percent decrease in R&D investment, an enormous effect when you consider the fact that metastatic cancers have an average five-year survival rate of 10 percent, versus 70 percent for localized cancers.
It’s not exactly wrong to devote resources to improving the prospects of metastatic cancer patients—theirs is the deadliest type. But as the saying goes, an ounce of prevention is worth a pound of cure: We’d be saving more years of life if we had more research on early-stage treatment and vaccines that prevented people from facing metastatic cancers to begin with. The authors provide some rough (and highly speculative) calculations for how many lives might have been saved with a better-designed patent system, and come up with a figure of 890,000 life-years saved for patients diagnosed in 2003 alone.
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