[pp.int.general] The real 'party with a difference'

[Reinier Bakels]

> Actually Benkler in Wealth of Networks surveys econometric studies 
> investigating the nexus between patents and innovation and reports there 
> seems to be no correlation, which induces him to support open source also 
> for pharma. Altho it must be said neoschumpeterians (Dosi et al.) have 
> long argued there is (thus justifying temporary monopoly granted by 
> patents as reward for R&D).

The typical story is "... in most industries, patents are nmot really 
needed, such as software. BUT pharma development requires *zillions* of 
dollars - so in this field patents are indispensable".

Reality is that the pharma industry is in crisis *because of* patents. So 
there *is* a correlation, but it is negative. Pharma development is to a 
large extent financed by public money (either directly or e.g. via academic 
hospitals), and allegedly most of the patent income is spent to promotion 
(bribing doctors ...) And perhaps even more importantly, the major pharma 
firms are so focussed on shareholder value, that they devise all kinds of 
tricks to prolong the life of their patents - which appears more attractive 
than engaging into risky new drug development. Fighting generics with all 
possible means is one aspect of such strategies (see the recent seizures of 
drugs in transit at Amsterdam airport - smart pharma industry 
representatives managed to get legislation to be adopted that even 
(allegedly) prohibit pills to be transported from Brazil to Africa - which 
are legal in both countries, just not in transit!). Other actions incllude 
the obstruction of FDA-like agencies to be established in African countries: 
they may give generic medicines a *safe* image - which they want to avoid.
The patent system also favours medicines for "profitable" diseases: many 
patentients, rich countries, and chronical diseases. My father died of 
pancreas carcinoma, but that would be a commercially unattractive disease, 
because the average life expectation after diagnosis of this type of cancer 
is 7 weeks - not enough to please shareholders.

Lately we talk a lot about "perverse incentives" - in view of the present 
financial crisis. The patent system, in particular in relation to health 
care. is s dreadful example of "perverse incentives". Incidentally, patent 
portfolios represent a "patent bubble" that may burst one day, just like the 
financial bubble.

reinier