This post was written by Deniz Temelli, Business Analyst at TechAlliance.
Earlier this week, I attended the monthly TechAlliance Breakfast Club with speaker David Canton and learned about IP and copyright laws for the music industry and online photo content. From David’s comments, it was clear that each industry has its own issues with IP, so I couldn’t help but think about how IP impacts the life science industry.
When I think of IP and life sciences, I immediately think of big pharma companies who are very aggressive in their patenting of drugs. This is one of the reasons why big pharma is so easily vilified as greedy corporations who have no regard for the patients they help.
One case that perfectly displays this vilification has to do with dichloroacetic acid (DCA) which recently made headlines as a miracle cure for cancer. DCA, which has been used for years to treat metabolic disorders, is a common compound that can be manufactured in bulk and has been shown to significantly decrease tumor size.
So why is this drug not being used across the world to help cancer patients? No pharma company has expressed any interest towards this drug because it is not patentable and, therefore, it can’t make any money from it. As this is an emotionally charged topic, it’s very easy to become outraged over this stance and claim it is an injustice.
However, emotion aside, let’s look at this objectively. The science behind the use of this drug as a cancer treatment is still preliminary, as the safety and efficacy have not been proven on a large scale. Full-scale clinical trials starting from phase 1 must be completed, which can cost hundreds of millions of dollars.
The main purpose of a drug patent is to ensure exclusivity for a certain period of time, which translates into a target ROI to cover the cost of R&D and clinical trials. For DCA, which is a generic molecule, if a single pharmaceutical company was to take on the cost of the trials, upon completion and drug approval, all other companies would be able to sell the drug, and the DCA market would become very fragmented. This would result in a huge loss for the initial company, effectively shutting down its pipeline of future drug development.
I think this is the point that many people gloss over when thinking of pharma companies as patent grabbing, money hungry corporations. In order to have the hundreds of millions of dollars to fund the clinical trials for the next potential blockbuster drug, a company has to make a significant profit on the previous drug. The exclusivity and profits that drug patents provide allow this business model to be sustainable.
Interestingly, as I am writing this, I came across an article in the Globe and Mail, which talks about how the Supreme Court of Canada has decided that the patent for Viagra is invalid. Reading through the comments at the end of the article, it was interesting to see readers express their opinions about the same two sides of the issue I have just talked about above.
In general, IP impacts the life science industry in many different ways, and this is just a single case. Although many will either criticize or support patents, in the case of pharmaceuticals, patents are a necessary evil that is dictated by the business model. And this is not likely to change any time soon.