Peter J. Pitts
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Most patents are applied for and granted to private industry and individuals. However, in a subset of instances, the government
applies for and is granted a patent. If the government receives a patent, there is a process that encourages the relevant
agency to license the use of the patent to private-sector companies, which in turn invest many millions of additional dollars
in the development of a marketable product. In the case of the SARS virus genomic map, if the government is granted a patent
by the Patent and Trademark Office, it is likely that NIH will develop a licensing strategy to maximize the chance that a
safe and effective vaccine will be developed quickly by the private sector. This strategy may include both exclusive and non-exclusive
licensing agreements.
Placing a vaccine or cure immediately into the public domain, however, thwarts the government's public health goal of identifying
treatments or cures expeditiously. Experience shows that without some sort of market exclusivity, investments in technology
to bring therapeutic products to market will not be made. The Orphan Drug Law is a good example of how providing exclusivity
results in new investment and, consequently, production of innovative life enhancing drugs.
According to a recent NIH report, more than 75 percent of licensed innovations amounted only to proof of concept, such as
the research that confirmed HIV as the cause of AIDS. It is up to private industry to take the basic science through the longer,
more expensive, more elaborate R&D process that leads, in some cases, to a commercial product.
Bringing a drug to market is an expensive, uncertain, and lengthy process. Even when the first step of identifying the genetic
map of a virus like SARS has been accomplished and results are publicly accessible, a long, difficult path remains before
a product can be used to help patients.
Even with significant investment of time and money, success is not ensured, making drug development a risky endeavor. According
to the Center for the Study of Drug Development at Tufts University (1995), only one in every 5,000 compounds screened becomes
an approved medicine. This means, of every 5,000 to 10,000 compounds tested, only 250 enter pre-clinical testing, five enter
clinical testing, and one achieves FDA approval.
Without financial incentives and intellectual property protection, no company—even with the most benevolent motivations—will
find it feasible to develop new, innovative life-saving and life-enhancing products for consumers.
Allowing the private sector to bear both the risk and the reward for successfully developing pharmaceutical, biologic, and
medical technology products has been, and remains, the most successful and efficient way to meet our public health goals.
Our technology transfer program is the envy of the world and is, in fact, the catalyst for our nation's dominance in drug
development.
Competition among companies, both here in the United States and abroad, ensures a diversity of expertise in various diseases.
This competitive model ensures that, when a public health crisis is identified, there will be an available pool of talent,
experience, and infrastructure to give us enhanced opportunities to successfully identify and produce cures and vaccines in
an expedited time frame.
Maybe someday the cost and uncertainty of developing and manufacturing a safe and effective product will be much lower than
they are today. Maybe at that point, the government will be able to take a patent and easily turn it into a safe and effective
product. Perhaps at that point, a meaningful public debate can occur as to whether it is appropriate and efficient for our
highly efficient and streamlined government to pursue this drug development role. But, at this point, the best alternative
is to encourage more and more investment by the private sector. This means we need to provide meaningful patent protection,
coupled with financial incentives to private industry to encourage them to develop these life-saving, life-enhancing products.
Peter J. Pitts is SVP at Manning, Selvage & Lee, and a senior fellow at the Pacific Research Institute.
He can be reached at peter.pitts@mslpr.com
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