September 23, 2020

Everyone’s Got A Pet Project: Patent Maximalist Says We Need Longer Patents To Incentivize Coronavirus Vaccines

Adam Mossoff is one of the most vocal IP maximalist law professors around. He’s never seemed to have met a form of artificial monopoly that he didn’t want to expand. His latest is that he’s claiming, laughably, that we should be extending patent terms in order to incentivize the creation of coronavirus vaccines. His argument is based on a misleading complaint that has been raised by plenty of pharmaceutical companies: they need to file their patent applications at the point of discovery, but they can’t market a drug until it receives FDA approval, and that can take years, which cuts into the years over which they hold a monopoly and can extract insane monopoly rents.

Mossoff says that now is the time to revisit that and to roll back the law that made it so the clock started so early, and to enable patent extensions to incentivize drug makers to create a coronavirus vaccine.

Congress can easily fix this mistake in innovation policy. It can enact legislation that reverses the changes made in 1993 and increases the patent term extensions. Instead of attacking patents, Congress should pass legislation providing more protections. It is an easy fix that will save countless more lives from cancer, diabetes, and viruses like the coronavirus.

This is utter nonsense on so many different levels. It assumes — incorrectly, though a core to all of Mossoff’s thinking — that the ridiculous monopoly profits are the only thing that incentivize creation. Given that tons of companies are already researching coronavirus cures, knowing full well that the reason to do so is to save millions of lives and that governments will easily pay handsomely for such a vaccine, it’s difficult to say with a straight face that these companies need more monopoly rents to work on these kinds of solutions.

Even more to the point, there’s an obvious fundamental flaw in Mossoff’s reasoning. A patent only goes to those who get there first. Every one else trying to create the same drug still has the same capital expenditure upfront to try to develop the drugs or technologies — but can get blocked by whoever gets to the PTO first. If we take Mossoff’s simplistic model that only if a company is guaranteed monopoly rents will they invest in the first place, his own model breaks down, because so many players will invest heavily and get nothing in return, because they were a day or week late.

It seems that a much better model is the way most of the economy works: if you build a good product people and companies and governments pay you for the product, and you don’t need the government to step in and say no one can compete with you for two decades (or more, if Mossoff got his way).

Especially at a time when we see patent-related price gauging around COVID-19, all the evidence suggests we should be moving in the other direction — opening up the ability for more companies to innovate and compete in a free market. Indeed, if Mossoff actually wanted real incentives that also compensates drug developers, you’d think he’d be much more supportive of the innovation prize approach, that basically gives a ton of cash over to those who develop breakthrough drugs in a prize format, but then still allow the drugs to be offered to those who need them at a reasonable price. Then you actually have people who can afford the drugs to stay healthy, rather than just acting as a siphon to drain people’s bank accounts to pay off pharma companies who bought most of the research off of smaller labs who did the actual work with government funding in the first place.
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