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Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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July 23, 2008

Patents Stopping an Alzheimer's Wonder Drug?

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Posted by Derek

A longtime reader sent along a very interesting example that’s being used in a new book. The Gridlock Economy by Columbia economist Michael Heller is getting some good press, including this interview over at the Wall Street Journal>’s Law Blog. Heller’s thesis is:

“When too many owners control a single resource, cooperation breaks down, wealth disappears and everybody loses.” That is, the gridlock created by too much private ownership is wreaking havoc on our economy and lives. It’s keeping badly needed runways from being built, stifling high-tech innovation, and “costing lives” by keeping groundbreaking drugs from hitting the market.

It’s that last example that caught the eye of my correspondent, and I wanted more details. Fortunately, Heller went on the in the interview to talk about that very case, and I’m going to just quote him on it:

”Here’s a life or death example that’s happening right now: A drug company executive tells me he may have a better Alzheimer’s treatment. But to get FDA approval and bring it to market, he has to license dozens and dozens of patents relevant to testing for safety and side effects. So negotiations fail and the Alzheimer’s drug sits on a shelf, even though my informant is confident it could save countless lives and earn billions of dollars.”

Now, here’s the problem: I’ve actually worked on Alzheimer’s disease myself, and this story does not ring true. I don’t know if Heller’s “informant” is talking about animal testing or clinical trials in humans, but the same points hold in both cases. For one thing, I’m not aware of any patents that have to be licensed to do the standard testing for safety and side effects. There could conceivably be a couple for faster or more convenient tests, but I don’t even know of those. Otherwise, safety testing, in both animals and humans, is (to the best of my knowledge) done pretty much outside the realm of patent considerations. That “dozens and dozens of patents” line seems wildly off to me. I have never heard of a drug (for any disease) that has not advanced due to patent considerations related to safety testing.

Update - and that's partly for a very good legal reason: the safe harbor provisions of the 1984 Hatch-Waxman Act, as reaffirmed in the 2005 Merck v. Integra decision by the Supreme Court. There is specific protection from infringement in the use of a patented compound for purposes of submitting regulatory filings. And the language of the ruling makes it look like it's intended to cover all sorts of patented technologies as well.

Second, it’s important to remember that efficacy testing comes after safety, at least when you get to humans. So this contact of Heller’s is talking about a drug that has not been evaluated in humans for either quality, but he’s still “confident it could save countless lives and earn billions of dollars”. Right – for Alzheimer’s, where you have to worry about human brain levels, where we’re still arguing about what even causes the whole disease, where the clinical trials take years because the deterioration is so slow. Professor Heller is being had.

And let’s stipulate that there are, somehow, enough convincing data to make a reasonable observer confident that said drug would go on to earn billions of dollars. (There is never enough information to completely convince anyone of that in this industry before a drug hits the market, but let’s pretend that there is). In that case, those mysterious patent negotiations would not fail. Some sort of agreement would be reached, with money like that on the table.

The problem with Heller using this example is that there are indeed a lot of problems and potential problems with intellectual property in the drug industry. (I’ve talked about a few of them here). It’s a big, important, complicated, topic – and for all I know, it gets a good treatment in Heller’s book. (I’ll read it and find out). But this cartoon of an example is going to confuse anyone outside the field, and irritate anyone inside it.

Comments (24) + TrackBacks (0) | Category: Alzheimer's Disease | Patents and IP


1. RB Woodweird on July 23, 2008 8:52 AM writes...

Heller is in the law school:

Perhaps you should ask him directly.

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2. Petros on July 23, 2008 9:06 AM writes...

The owner of London's airports has just been caught trying to enahnce the case for a third runway at LHR by inventing a more enviromnetally plane than has even been postulated by either Boeing or Airbus.

Rather counters to Heller's point

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3. Still Scared of Dinosaurs on July 23, 2008 9:28 AM writes...

I once worked on a drug that was gonna "earn billions of dollars"* if is could be brought to market before drug one being developed by a competitor. Turns out our drug required a core patent held by the developer of the other drug and nobody at our company ever thought the issue was anything but a cost issue. I was told by a SVP that if they refused to license they would have to sue and would end up with less money than we were willing to pay up front to make the issue go away.

We just weren't going to negotiate the license until the drug was on the market's doorstep. No lost revenues for others to sue for until then, at least most of the time. This is just one story but it's a case where the drug could not have existed without a license from someone who would have preferred not to grant it and it didn't hold up the development by one day.

*Or was that "sell billions of dollars"? I'm not sure the distinction is thought to be relevant anymore. Especially in this case where both drugs got to market and struggled to sell tens of millions of dollars.

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4. Derek Lowe on July 23, 2008 10:23 AM writes...

Petros, I did just that after finishing up the blog post this morning. I'll let everyone know what I hear. . .

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5. AD Researcher on July 23, 2008 11:26 AM writes...

In the Alzheimer's field (especially with respect to the amyloid approaches) there is a complex thicket of intertwined patents on genes, tests, reagents, research tools, and compounds. In many cases, it is almost impossible to determine the appropriate entity from whom to license a required technology. The fear is that once there is real money being made on an Alzheimer's treatment the lawyers will descend on the company that brought it to market and significantly reduce the profitability of the treatment through lawsuits. Since every patent holder believes their patents broadly cover the pathway to a treatment, it will be next to impossible to successfully negotiate license agreements with all perceived stakeholders. This issue was certainly a headwind in my previous large pharma company as we advocated for development of a new AD treatment. The commercial and legal groups were very nervous and consequently did not strongly support the effort.

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6. qetzal on July 23, 2008 12:12 PM writes...

@AD Researcher:

Can you provide any specific examples that might be consistent with Heller's comment?

In other words, IP that would not cover a proposed treatment directly, but still might prevent testing for safety and side effects (or even efficacy, for that matter).

I can imagine a few possible scenarios. (Some proprietary knock-out model that everyone thinks is essential for animal efficacy testing? Maybe an Ariad-style patent that purports to cover any treatment that works through the amyloid gene or protein?) But if you're in the field, you can probably give us better insight than an economist's translation of a pharma exec's translation of what the pharma underlings told him.


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7. CMC guy on July 23, 2008 2:16 PM writes...

Without elaborating specifics I have seen projects play out the way #5AD describes. Seems many places would rather pay a small licensing fee (as insurance) even if only a potential for Patent infringement rather than risk getting sued once product launched (and agree that is the trigger event). I have seen usually involves some specialized technology as if a conflict arises in a composition of matter issue there is less willingness to consider advancing a compound unless very strong candidate (possible because the later harder to break). Also depends of who holds the Patent as many willing to deal with universities or smaller companies verses someone who is a direct competitor or big (due to less hassles plus IMO perceived position of advantage). I have also seen work-a-rounds developed to a clear pathway when deemed critical enough.

It is my understanding that using Patented technology/compounds for "research purposes" is basically unrestricted so it only does becomes an issue if aspects get integrated in the commercial applications/product.

This issue sometimes does not adhere to scientific logic and comes down to the lawyers so trust you have good ones on your side. This quote seen recently seems to fit:

"Engineers go to school to learn how to work together. Lawyers go to school to learn how to disagree with each other” attributed to co-worker of John Spevacek.

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8. AD Researcher on July 23, 2008 2:24 PM writes...

The conflicting and overlapping patents cover the production and use of antibodies that recognize amyloidogenic fragments of A-beta, mutations in A-beta that may lead to excess production of A-beta fragments, mutations in the secretase enzymes that process A-beta, the whole genes encoding these proteins, the measurement of A-beta itself by any means, and all of the standard animal models of AD (some of which probably were made using technology that infringed other patents). There are also a number of broad "Ariad-style" patents that attempt to cover the entire field. Most, if not all, have highly overlapping claims and include claims for discovering and developing drugs. Our patent attorneys simply threw in the towel when trying to map out a strategy for gaining clear rights to practice any of these inventions. The conclusion was that the first company to hit the market with a successful anti-amyloid drug could be in litigation for years. Not being a patent attorney, its difficult to properly evaluate whether this conclusion is true, but it certainly held back development of a potential AD treatment.

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9. Chrispy on July 23, 2008 2:47 PM writes...

At least part of the blame has to lie with the risk-averse lawyers in big Pharma. It is understandable, since if they green-light an effort which is subsequently found to be within someone else's patent then the lawyer's butt is on the line. They have nothing to lose by telling you that a project has "infringement risk".

Ariad's patents are a case in point: how many of you researchers are forced to do stupid end-runs around Ariad's patents on NF-kB for assays?

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10. drughunter on July 23, 2008 5:07 PM writes...

Although I think various posters are making good points about how complex it can be for small companies to sort out licensing and patenting issues, there is no way the original story by Heller passes the sniff test. I can't wait to here what Heller says when he speaks with Derek.

To really boil this down, there are only a few possibilities:

(1) The "drug company executive" works for a large company. In this case, he has no issues at all because his company will know how to deal with the mess.

(2) The executive works for a small, inexperienced, and/or timid outfit.

(2.1) Suck it up and go for it.

(2.2) If he can't navigate the issues, he has a plan B: he can license the drug, with a sizable downstream ownership, to a bolder or more experienced company. [Personally, I think this is crazy because of the safe harbour provisions Derek mentioned, but that's just IMHO.]

(2.2.1) If he is unwilling to do so, it is his own fault.

(2.2.2) If he is trying to license it, but can't, that suggests the rest of the world isn't as convinced as he is that he has found the miracle cure for AD.

"He was a cruel man, but fair" - Monty Python, the Piranha Brothers sketch

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11. L'écran de ma tante on July 23, 2008 9:58 PM writes...

Some biotech companies are making a genuine effort to speed up drug discovery and development, and if successful they deserve to profit. Others are making an effort to erect toll booths, in order to extract money from Big Pharma. Now, I'd be the first to admit we ain't perfect -- but we really are trying to find real treatments for real people suffering from real diseases. Most biotechs are also doing that, but some are emphatically not. Some also have delusional notions about how much we're willing to pay them.

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12. Morten on July 24, 2008 4:27 AM writes...

In some science fiction novel I read a treatment that gives basically eternal life is submitted for state approval. It is turned down - to avoid costs to+from supplying it to the poor unwashed masses in the developed world. With an anticipation from the ruling class that it would be released in Brazil instead so they could buy it from there...
To be cynical I could imagine a launch of a AD treatment in some island state desperate for income and willing to throw any contrary patent claims out of court. It would be unethical as hell but it would be good leverage in negotiations.

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13. burt on July 24, 2008 8:45 AM writes...

"In some science fiction novel I read a treatment that gives basically eternal life is submitted for state approval. It is turned down - to avoid costs to+from supplying it to the poor unwashed masses in the developed world."

I don't think the FDA would approve such a drug-- but for bureaucratic reasons. Aging is not recognized as a "disease". Same issue could bite "smart drugs".

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14. Morten on July 24, 2008 9:47 AM writes...

It was science fiction. Just a strange segue, ok? No such drug.
Point was that if it was valuable enough you could in theory drop markets that were more likely to allow litigation based on toll booth patents. And those with the money would travel anywhere to get treated. "A drug company executive" doesn't have a drug either though. So the point is moot.

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15. Derek Freyberg on July 24, 2008 11:13 AM writes...

Followers of patent law blogs (such as Dennis Crouch's "Patently-O") will be well aware of the Wall Street Journal's anti-patent stance, and I think this is yet another example, with Prof. Heller as their latest shill. In my opinion (certainly in my hope) Ariad will sooner or later get its comeuppance - a swift kick in the gonads by Federal courts on its patent claim - just as the University of Rochester did on its claim to every COX-2 drug, though they'd not found even one. There will always be junk patents in every field - the system isn't and realistically can't be perfect - but the idea that a genuinely useful therapy for a significant disease will remain undeveloped because of excessive private ownership of IP rings about as true as the old story of the Big Three automakers suppressing the 100 m.p.g. carburetor.

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16. Still Scared of Dinosaurs on July 24, 2008 1:50 PM writes...

Derek F -

You've got a range of real-world experience here. Mine is that a competitor's patent on a step in our mfr'ing process (a BIG step) was a minor issue. Others are pointing out that decisions were made to avoid potential areas of development because of murky patent issues. We'll likely never know if genuinely useful therapies were missed due to such issues because the data aren't there, but I suspect they have been.

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17. SRC on July 24, 2008 3:11 PM writes...

too much private ownership is wreaking havoc on our economy and lives

This is the operative phrase, and speaks volumes about its author, and his agenda.

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18. milkshake on July 24, 2008 7:21 PM writes...

Here in our medchem department, we have a fairly young boss under a tremendous pressure and our higher superiors are rather twichy also. Instead of finding the best compound and then worrying about its patentability, we are being direceted away from series that fall into structure classes with crowded patent space. We are not suppose to make and test in animals compounds that are hard to patent, etc. The bosses worry about the litigation potential alot - and they think we cannot afford fight patent trolls and their sky-and-moonshine patents as a non-profit research institute.

By the way, Derek, I have participated in some "prophetic" kinase patents myself (I am not too proud of it but at least we made those imaginary compounds within one year period after provisionals; they were only mediocre) - and from your current employer I saw some very dubious patented stuff also - I remeber cursing the name of your company since I was asked to "re-synthesize" these prophetic examples...

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19. weirdo on July 24, 2008 7:28 PM writes...

What, exactly, is the concern here? You can do anything you want -- basic research is never blocked by patents. As a non-profit research institute, you have no pockets, let alone deep pockets.
Somebody is dropping the ball here.

Regarding the original topic -- the Alzheimer's cure that is being blocked by patents -- this is clearly total BS spewed by whomever. One of those stories that sound great to people outside the business, but CRAP to those within.

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20. CC on July 24, 2008 8:32 PM writes...

Although I think various posters are making good points about how complex it can be for small companies to sort out licensing and patenting issues, there is no way the original story by Heller passes the sniff test.

Agreed, and I think that was Derek's point in the first place. It's certainly possible to have a promising project held up by inefficiencies in the patent system, but I can't imagine any set of circumstances where one could be confident of having a blockbuster yet be unable to perform Phase I studies.

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21. milkshake on July 24, 2008 9:15 PM writes...

the idea is to not to waste (our limited) time and resources, such as DMPK, on things that won't directly improve our own IP position. The whole purpose of our groups existence is to develop a good drug candidate - and that means a compound which could be patented by us.
I think this kind of obsession with some baloney patents is contraproductive because you can hardly build a good SAR understanding when you censor yourself in this way...and optimizing a highly druggable structure to bust someone's patent is a lot easier than optimizig a marginal series for a good PK, cell activity and selectivity.

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22. Skeptic on July 25, 2008 10:39 AM writes...

"Some biotech companies are making a genuine effort to speed up drug discovery and development, and if successful they deserve to profit."

Ha. More and more biotech firms look like scam financialization outfits and exist for the sole purpose of selling stock to a gullible public. The fascination with IP in the western world is also espeically humourous in the context of the China phenomenon: once the chinese have finished with the knowledge transfer from the west, the MBA's and their partnerships and relationships bs will be left holding the bag. The Red Army will take over and oust the western fools for good.

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23. Anonymous on July 25, 2008 10:48 AM writes...

depends - big companies have deep pockets and can afford the occasional (or even perpetual) law suit. Small companies sometimes have to avoid even the appearance of evil - while the potential liability may in actuality be small, the threat of a lawsuit can scare a nervous nellie board member/potential investor/lincensor/collaboator. Agreed, these things can almost always be resolved, but it can be tough for even a very, very good CEO to convince all of the people he/she has to convince.

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24. Dan Woodard on August 5, 2008 2:18 PM writes...

While other manufacturers of methylene blue would be unable to market their products for Alzheimer's, physicians are permitted to prescribe "off label". Consequently I will be a little surprised if the drug can be sold for a high price. But hey, for the patients that's a good thing.

We have been working with tau, trying to define the aggregation process using atomic force microscopy. But funding for basic research is difficult. NIH funding has actually declined since 2000 and new proposals have little chance. If Singapore supports research and the US does not, we will eventually fall behind, perhaps permanently.

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