Bankrupting Big Pharma Isn’t a Solution

By Gene Quinn
August 11, 2021

“It is extremely disingenuous to be discussing pharmaceutical companies being incentivized to fail as they managed to have wildly successful vaccines ready for clinical trial within a few months, and widely distributed within 10 months of outbreak in the United States.”

https://depositphotos.com/72813317/stock-illustration-stamp-response-required-in-red.htmlBelieve it or not, a recent op-ed in the Washington Post written by Robin Feldman took the position that pharmaceutical companies should charge prices for their drugs that would surely guarantee that they go bankrupt. An absurd position even for a law professor who is ideologically predisposed to an irrational hatred of patents, but precisely the position Feldman articulated. How someone as smart as a law professor does not understand basic business reality raises important questions about her intellectual honesty—or at the very least raises questions about whether she is truly an expert on this topic.

The reality is that pharmaceutical science is difficult, which is hardly an earth-shattering observation. Practically everyone with a high school education had to take at least basic biology and basic chemistry, and many with various science or even liberal arts degrees were required to take at least basic biology or basic chemistry in college. These subjects are complicated, and on the level required to provide innovations of the most desired for the worst diseases, the science is uncertain, unpredictable, and extraordinarily complex. And the regulatory processes are fraught with hurdles, delay, long clinical trials and evaluations, and billions of dollars in expenses. Those are the facts, whether we wish them to be different or not.

It seems that one of Feldman’s primary arguments is simply against capitalism. She cites several examples where pharmaceutical companies made billions of dollars in profit. She laments the fact that these pharmaceutical companies merely acquired smaller innovator life-science companies and then shepherded the drugs through the Food and Drug Administration (FDA) approval process. To hear a so-called expert be so casually dismissive of the risk and hurdles associated with the FDA regulatory process is astonishing. To listen to Feldman, it is as if acquiring a promising drug is a guarantee that FDA approval is ensured and riches will follow. That is simply not the case.

They’re Not All Blockbusters

The pharmaceutical companies lose money on more than 90% of the drugs that are conceived. One study demonstrated that from 2006 to 2015, only 9.6% of drugs entering Phase 1 clinical trials even made it to market successfully. A more recent study by MIT suggests that 14% of drugs entering clinical trials make it to market, but there is a wide variation of between 33% in vaccines for infectious diseases to 3% for cancer treatments. So, no matter how you choose to look at the issue, upwards of 86% of drugs that even make it into clinical trials are never going to make it to market, and a far smaller percentage of those that do will ever become blockbuster drugs that make real money for the pharmaceutical company.

Notwithstanding, Professor Feldman in her infinite wisdom suggests that pharmaceutical companies should not be able to charge enough for the drugs that make it to market to cover the costs associated with researching, developing, engaging in clinical trials and the regulatory processes for those drugs that don’t make it to market. Or, that they should be limited on the profit they make because they simply acquired the drugs from a smaller life sciences company. The inconvenient truth that Feldman does not explain is that the FDA regulatory process is too burdensome and costly for any except for the largest pharmaceutical companies to navigate over the 12+ years it will take and billions of dollars in investment. That is why deals are struck between smaller innovative companies and large pharma. And let’s not forget that those smaller life science companies do extremely well monetarily, and so too do the investors, which is precisely why and how the system works.

When Feldman says the bulk of the patent reward is going to the company that “walked the last mile,” she is not telling the whole story—not by a longshot. Those small life science companies with the good ideas that take risk are able to obtain capital in order to pursue the treatments and cures they do precisely because big pharmaceutical companies are going to come calling if they look like they might be successful.

“If Big Pharma wants to start buying assets, more venture capital is going to start pouring into biotech because they know that Big Pharma will be interested in acquiring it down the road,” Bill Bolding, a senior analyst at Provident Healthcare Partners, explained for a recent article that described a 60% uptick in venture capital availability for small biotech companies in 2021 compared to 2020. So, there is a fundamental mischaracterization (to be kind) with the alleged problem identified by Feldman. She begrudges pharmaceutical companies making what she believes to be excess profits on an exceptionally small number of drugs, but those profits are what incentivizes investors to pay for very risky innovation that seeks to tackle the very problems for which we need solutions the most.

Feldman also claims that to allow pharmaceutical companies to charge a high enough price to make it worthwhile to stay in business creates an incentive to fail, in what has to be one of the most illogical, business naïve arguments one could possibly make.

No business can stay alive if they are prevented from making money, particularly when 86% of what is attempted is going to lose money. Perhaps it is Professor Feldman’s position that pharmaceutical companies should just focus on the 9.6% to 14% of drugs that will make it to market and stop spending money on the 86% to 90.4% of drugs that will lose money, but if that is her expert opinion, she really needs to consult with a science textbook. Only someone who thinks creating drugs and vaccines is as easy as waving a magic wand could form such an ignorant position. And ignorant it is, on both the science and the business.

Does This Look Like Failure?

Additionally, to suggest that pharmaceutical companies are being incentivized to fail is the type of argument that shocks the conscience and makes a mockery out of what we have all witnessed in plain view over the last 18 months. As the COVID-19 pandemic has unfolded there was a race to create vaccines that are so wildly successful they are upwards of 96% effective to prevent severe disease and 88% effective to prevent any symptoms, even with respect to Delta and other variants. See MayoClinic. So, it is extremely disingenuous to be discussing pharmaceutical companies attempting to fail or being incentivized to fail as they managed to have vaccines ready for clinical trial within a few months, and widely distributed within 10 months of outbreak in the United States.

Next Time, the Cupboard Could Be Bare

What good does forcing pharmaceutical companies out of business do anyone? In the United States, the Supreme Court has already made it virtually impossible to patent many different types of life sciences innovations, the Federal Circuit has doubled down, taking those decisions to the next level, and Congress has been absent. We should be thankful that the science and technology responsible for COVID-19 vaccines date back to 2003 to 2008, prior to the Supreme Court’s Mayo and Myriad rulings that effectively prohibit many kinds of patents relating to medical diagnostics and treatments. We may not be so lucky next time, when the cupboard of patented technology is bare, and that is if pharmaceutical companies aren’t driven into bankruptcy by fringe business positions like Professor Feldman’s.

Without the revenue from those drugs that make it to market, and the smaller subset of blockbuster drugs, pharmaceutical companies will cease to exist. And without the escalating prices being paid for promising small life science companies by big pharma we will see venture capital retreat and fewer companies in search of extraordinary cures and treatments be funded. What good does this do anyone?

If Feldman has better ideas, then she can and should put them forth. But pretending that the answer is a price cap on big pharma so they can’t possibly stay in business and expecting that to not have a disastrous impact on life science innovation is foolish.

Image Source: Deposit Photos
Author: kchungtw
FImage ID: 72813317 

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 56 Comments comments.

  1. Greg DeLassus August 11, 2021 3:59 pm

    Feldman’s argument depends on the premise that pharma prices are what they are because pharma companies are using their successful products to make good the losses of their failures. The implicit model here is that if drug development costs were lower, then drug prices would fall commensurately.

    The reality, however, is that R&D costs are not the reason for high drug prices. After all, when Christie’s auction house charges $2 million for a painting, it is not because of the exorbitant costs of manufacturing that painting. The reason for the high price of the painting is because someone out there is willing to pay that high price, and any good is worth whatever the buyers are willing to pay.

    A rational company (pharma or otherwise) will always set prices to maximize revenue. The more you charge for a unit, the more revenue each sale brings in. On the other hand, the less you charge for a unit, the more sales you are likely to make. Economists model these countervailing forces as “supply curves” and “demand curves,” and the point on the chart where the two curves intersect is the revenue-maximizing price point.

    Notice that nothing about that analysis depends on the costs of manufacturing or product-development. That is because a rational company does not take such costs into account when setting prices.

    The only rational considerations for price-setting are the countervailing forces of supply and demand. If the revenues that can be generated from selling a product at the revenue-maximizing price point are not adequate to cover a company’s costs, then the company simply should not try to bring that product to market (which is why market research is a necessary preliminary to any product development process).

    It would be simply irrational to say, however, “we cannot cover our costs from the revenues that will be generated at the revenue-maximizing price point, so we will raise our prices.” Raising prices beyond the revenue-maximizing price point will bring revenues down, not up.

    Therefore, there is no reason for a rational firm to take product development costs into account when setting prices. Product development costs are an irrelevant and irrational consideration to bring into the price-setting analysis.

  2. Greg DeLassus August 11, 2021 4:02 pm

    [M]ost Americans are sick of drug profiteers.

    As well they should be. Americans have, however, no cause to be angry with the U.S. patent system, which has very little to do with the U.S.’s anomalously high drug prices.

  3. Anon August 11, 2021 5:27 pm

    Interestingly, I know of no one that is more pro-patent than I, and yet, MANY (and admittedly NOT all) of the items that Prof. Feldman picks up are NOT new to that professor, and in fact have been stated by yours truly.

    I would distinguish in that Pharms tends to ‘get breaks’ in patent law that most all other art fields do NOT get, and that the ‘answer’ is indeed NOT ‘abolishing’ or ‘wrecking’ patent law or strong innovation protection.

    At the same time, I have had the (dis)pleasure of seeing inside the belly of the beast of Big Pharma, and while I am ethically prohibited from sharing the details, I can share that it is indeed a squalid wasteland and that ALL would be far better off if the entirety of the flow of money (including pharmacies, insurance [especially insurance] and all other actors) were brought out into the sunlight and your ordinary people could see exactly why the US citizen inordinately supports all pharma progress in the world.

  4. Ron Katznelson August 12, 2021 4:39 am

    Gene,
    You ask how a smart patent law professor does not understand basic business reality. Unfortunately, Professor Feldman’s intellectual shortcomings also appear well within her own purported field of expertise — the patent system. The first sentence in her WAPO article gives it away: “Patents are supposed to incentivize success.”WRONG. Rather, patents are supposed to incentivize risk investment. Investments to develop and commercialize new inventions are much riskier than investments in established and proven technologies, and thus require much higher returns. Higher returns are required to make up for losses due to other risky investments that did not pan out. Higher returns — indeed sometimes “obscene” returns — are the only economically feasible incentives that will facilitate such risk investments. These high returns can only be secured by exclusive rights in the market. And that is what patents are for. For example, when only one of 250 candidate drugs succeeds in getting to market, and where pharmaceutical companies invest an average of $1B for getting that drug to market, only the patent system can sustain such highly skewed economic realities.

    Professor Feldman is not alone among her academic colleagues having misconceptions on the true nature of the patent bargain. They teach their students misleading notions such as those Professor Feldman repeats in her article: patents are intended to encourage “inventors to create and share successful innovations, in exchange for the right to exclude others.” This misses the true purpose of the “exchange” in two ways: First, the exclusive rights are directed to compensate the investors — not the inventors. Inventors are not compensated for their disclosure of the invention –- they are compensated financially by profits facilitated by their investors upon commercial success.

    Second, the benefit initially inured to the public from the risk investment in a new invention that is developed, commercialized, and brought to market, often dwarfs the benefits form its disclosure. And contrary to Feldman’s assertion, the disclosed invention need not be “successful” to warrant the exclusive patent right. One cannot divine in advance whether a patentable invention will be successful in the market; and the investment necessary to make that determination is unlikely to be forthcoming without first receiving the exclusive patent right. Ultimately, both successful and unsuccessful inventions contribute to the stock of knowledge the public gains from the disclosures of all patents.

  5. Night Writer August 12, 2021 5:13 am

    It has to be sorted out why we pay more than other countries. That is the only problem. Capitalism and patents are great or at least better than the alternatives.

  6. Steven M Hoffberg August 12, 2021 10:39 am

    Its not so simple. The issue seems to be whether patent damages should permit recovery of only the expenses for developing a particular drug, or all of the expenses for a drug development company with a 90% failure rate. While the latter helps companies build a business based on patent protection for the winners, that is not necessarily the role of a patent.

    If I squander my resources developing and patenting failed battery anodes, does that mean that other patents I own on successful but unrelated battery cathodes are worth more? Quinn argues that we look at the business entity, and its business model, to consider damages, which then are reflected in the value of the patent. Feldman argues that we should look only at the patented product, and not the business with its accompanying development failures.

    In the case of pharma, the business economic unit analysis seems to make sense; the success of some drugs drives the programs that include exploration, including failures. On the other hand, few other business could credibly argue that the correct damages for infringement of their patent includes compensation for losses on the remainder of their portfolio.

  7. Daniel Alecu August 12, 2021 11:21 am

    If one desire to judge the system by the abuses of the system then one may draw to the conclusion that the system needs changing. The result may be new systems new abuses.

  8. Night Writer August 12, 2021 12:07 pm

    @5 Ron Katznelson

    Thanks that was well written. And that was nasty little goal post shifting on the part of “Professor” Feldman, who as far as we know may be actually producing this “academic work” as a work product for a client.

    You might want to add some commentary about the problem that working for a solution to a single problem is often not worth the effort. For example, to build a new and better plough might take a person that owned a farm 1000’s of hours and, thus, not be worth the return to that single person. And without patents the single person would not be able to reap rewards or at least it would be difficult in selling the product to others.

  9. CR August 12, 2021 12:58 pm

    Whether through evergreening or bribing generic competitors, Big Pharma has routinely abused the patent system. While one could appreciate the risk and investment associated with regulatory approval (BTW, most failures occur in the smaller/cheaper phase 1s and 2s, and new developments in trial designs and statistics have made it less costly overall), US drugs are off-the-wall crookedly priced. And changes to the patent system

    Well-established non-patent ways in which companies can be rewarded include regulatory-conferred exclusivity, which rewards successful innovation, and is essentially iron-clad protection available in all G20 economies.

  10. CR August 12, 2021 1:08 pm

    Apologies for the cutoff sentences

    …And changes to the patent system are unlikely to appreciably affect pricing. IMO, that will take legislation that 1) requires pricing transparency throughout the healthcare system, and 2) modification of Medicare part D to allow the government to negotiate.

  11. Monica Ravanello August 12, 2021 1:23 pm

    Well written article Gene. Thank you.

  12. Greg DeLassus August 12, 2021 1:26 pm

    [F]ew other business could credibly argue that the correct damages for infringement of their patent includes compensation for losses on the remainder of their portfolio.

    You are falling for Prof. Feldman’s erroneous framing. Damage for infringement of a valid pharma patent do not “include” costs of their failures. Rather, pharma patent damages simply reflect the price that buyers are willing to pay for pharma products.

    As it happens, that willing-buyer price is high enough to cover the losses that pharma companies realize in their hit-or-miss business model of new product development. That does not mean that courts are awarding damages to make good business losses. It simply means that the market is rich enough that the price that is rightfully calculated as lost profits or reasonable royalties happens also to be a sum large enough to make good business losses on failed products. The damages calculated, however, would be exactly the same even if the patentee never suffered any failures.

  13. Anon-noyed August 12, 2021 1:48 pm

    Another factor to consider is Big Pharma vs. Generics, and the elephant in the room is the Opioid Crisis, and Big Pharma’s enablement of same.
    We can talk about rational companies all we want, but companies are no more rational than the personal goals and motivations of those leading them.

  14. B August 12, 2021 2:01 pm

    @ Night Writer “It has to be sorted out why we pay more than other countries.”

    Much has to do with the government-mandated or permitted non-transparency of the system. Non-patented, non-hormone drugs are ridiculously expensive for no good reason. Made in China or India for a fraction of a penny per dose, U.S. distributors manage to sell the same drugs for $2-$10/dose.

    As to certain hormone-related drugs, such as HGH, these drugs are harder to manufacture correctly. Still, if you directly bought from the same Chinese manufacturer as certain unnamed drug companies, you’d pay less than 1/10th the price with the only downside being . . . well, there is no downside except consumers aren’t allowed to make such purchases.

    Capitalism doesn’t work because capitalism isn’t allowed to work.

    As to Feldman, her take on patented drugs is the sort of tripe I expect from a person incapable of running a newspaper stand. Let Feldman start her own pharma company and discover how businesses work, rather than whine about how other people run their own businesses.

    Hey, you know what is OBSCENELY EXPENSIVE? Robin Feldman’s books, which should sell for no more than a dollar a book. That darn Constitution, Art 1, Section 8, clause 8, however, keeps the money-grubbing law professor unduly enriched. Copyright law is broken.

  15. B August 12, 2021 2:11 pm

    @ Anon “At the same time, I have had the (dis)pleasure of seeing inside the belly of the beast of Big Pharma, . . . and that ALL would be far better off if the entirety of the flow of money (including pharmacies, insurance [especially insurance] and all other actors) were brought out into the sunlight[.]”

    Transparency is forbidden.

  16. B August 12, 2021 3:13 pm

    @ Annoying “Another factor to consider is Big Pharma vs. Generics, and the elephant in the room is the Opioid Crisis, and Big Pharma’s enablement of same.”

    How has the opioid crisis led to increased drug prices?

    FWIW, I actually agree on the roll of certain big pharma miscreants, but who has enabled the opioid crisis more? Big Pharma or the open boarders politicians? https://www.rollcall.com/2021/06/11/bidens-border-policies-are-worsening-the-opioid-crisis/

    “We can talk about rational companies all we want, but companies are no more rational than the personal goals and motivations of those leading them.”

    Now substitute “government agencies” for “companies.”

  17. ipguy August 12, 2021 3:17 pm

    “Capitalism doesn’t work because capitalism isn’t allowed to work.”

    No, capitalism is working because capitalism is working as capitalism works in the real world. See Post #1 above. Capitalism is defined as “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.” Emphasis on “for profit.” Even Adam Smith believed that there should be a moral component to capitalism. When the bottom line or shareholder price is all that matters, that is capitalism as it works (dysfunctionally or not depending on your point of view) in the real world. See Smith’s The Theory of Moral Sentiments (1759). Smith believed that capitalism should include a commitment to the good of humankind that trumped economic self-interest.
    Anon-noyed is correct that corporations are only as rational as those leading them. Case in point, Martin Shkreli aka Pharma Bro.

  18. Greg DeLassus August 12, 2021 4:18 pm

    [W]ho has enabled the opioid crisis more? Big Pharma or the open [borders] politicians?

    Do you see a correlation between political regime and overdose deaths in the data? I confess, none is evident to my eye.

    https://www.drugabuse.gov/drug-topics/trends-statistics/overdose-death-rates

  19. B August 12, 2021 4:46 pm

    @ ipguy “No, capitalism is working because capitalism is working as capitalism works in the real world.”

    I respectfully reply that, when government picks favorites or installs rules/regulations that favor some over others, capitalism is hindered as trade and industry are de jure and de facto controlled (or at least heavily distorted) by the state.

    “Anon-noyed is correct that corporations are only as rational as those leading them. Case in point, Martin Shkreli aka Pharma Bro.”

    I don’t disagree. However, how rational is a federal government that takes large sums of money from big pharma, big tech, etc.?

    BTW, Shkreli’s pharma business strategy involved medicines that were out-of-patent medicines and had no associated R&D or significant barriers to entry. Nothing stopped anyone from competing.

    “Smith believed that capitalism should include a commitment to the good of humankind that trumped economic self-interest”

    Smith was very pro-morals and public good, but I’m pretty sure Smith’s Theory of Moral Sentiments makes no statement about capitalism including “a commitment to the good of humankind that trumped economic self-interest”

  20. Moderate Centrist Independent August 12, 2021 5:09 pm

    Pharma Bro is a prime example that the changes needed don’t involve patents.

  21. Steven M Hoffberg August 12, 2021 5:10 pm

    Greg: I am not “falling” for anything. I was comparing and contrasting the opposing positions.

    In fact, the value of a patent is based on its potential value as a result of successful litigation. If a court refused to award damages in pharma cases beyond the scope of “reasonable pricing” (determined according to socialist “ideas want to be free” economics), then a rational infringer would certainly risk infringing a patent, leading to lowered incentives by pharma to invite such infringement.

    Why, in patent litigation, is a critical feature of a cellphone worth less than $0.25 per unit, but a few milligrams (or micrograms) of a cheap chemical worth $$$$? It is because the judiciary has discounted high tech IP, and championed pharma IP.

    Just wait until American Axle hits pharma/biotech. The argument goes something like this: all chemicals are made from atoms. Their arrangement is merely a matter of information, and when information is not technological. Therefore, chemicals/drugs which differ from the well known, routine and conventional materials only by the arrangement of their atoms/quarks is an abstract idea, and patent ineligible. Besides, given quantum physics, is that molecule really not a product of nature which with some finite probability existed in nature?

    In fact, I’m not sure that IP damage compensation based on the profits of the business (pharma assertion model), rather than the incremental contribution of the patent (big tech defense model), is incorrect. But, I focus on the inconsistencies rather than the correctness of one position over the other.

  22. Greg DeLassus August 12, 2021 7:47 pm

    I am not “falling” for anything. I was comparing and contrasting the opposing positions.

    Fair enough. My apologies for the implication.

    Why, in patent litigation, is a critical feature of a cellphone worth less than $0.25 per unit, but a few milligrams (or micrograms) of a cheap chemical worth $$$$?

    Anything is worth what a buyer is willing to pay for it. It rarely makes sense to wonder why buyers are willing to pay $$ for X but $$$$ for Y. Buyers are not always rational (or at least their reasons are not always intelligible).

    Just wait until American Axle hits pharma/biotech.

    Sure, I agree. I would not be surprised (distraught, but not surprised) to see a judge pen a Mayo-style invalidation along the lines you suggest. Mayo/Alice are the universal acid that dissolves all patent claims eventually.

    That is why Mr Quinn (rightly!) urged pharma patentees and E.E. patentees to come together in favor of the Coons/Tillis statutory fix a few years ago. Regrettably, the perfect became the enemy of the good back then. Now that compromise looks to have fallen off the table, and we are essentially doomed to keep sliding indefinitely further toward the Mayo/Alice abyss.

    I’m not sure that IP damage compensation based on the profits of the business (pharma assertion model)…

    Pharma damages are not calculated based on the profits of the business. They are calculated based on what real, live, actual buyers in the actual market are willing to pay.

  23. Lolprofs August 12, 2021 9:04 pm

    Why are we listening to the opinion of a failed third year associate who writes articles with no apparent customer or business objective? Because that is what an IP professor is.

  24. ipguy August 12, 2021 9:34 pm

    @B

    “I respectfully reply that, when government picks favorites or installs rules/regulations that favor some over others, capitalism is hindered as trade and industry are de jure and de facto controlled (or at least heavily distorted) by the state.”

    I respectfully reply that you are complaining about how capitalism works in the real world as opposed to how it works on paper. Your comment reminds me of Rodney Dangerfield’s classic movie, “Back to School”. When his character, a very successful businessman, goes back to college and takes a business course, he gets into an exchange with his professor because his professor is not giving the students a realistic understanding of how business works in the real world and the professor failed to mention some very practical things:
    Thornton Melon : Oh, you left out a bunch of stuff.
    Dr. Phillip Barbay : Oh really? Like what for instance?
    Thornton Melon : First of all you’re going to have to grease the local politicians for the sudden zoning problems that always come up. Then there’s the kickbacks to the carpenters, and if you plan on using any cement in this building I’m sure the teamsters would like to have a little chat with ya, and that’ll cost ya. Oh and don’t forget a little something for the building inspectors. Then there’s long term costs such as waste disposal. I don’t know if you’re familiar with who runs that business but I assure you it’s not the boy scouts.
    Dr. Phillip Barbay : That will be quite enough, Mr. Melon! Maybe bribes, kickbacks and Mafia payoffs are how YOU do business! But they are NOT part of the legitimate business world! And they are certainly not part of anything I am doing in this class. Do I make myself clear, Mr. Melon!

    Hey wait! You refer to yourself as “B”! Does that stand for “Barbay”? LOL

    “I’m pretty sure Smith’s Theory of Moral Sentiments makes no statement about capitalism including “a commitment to the good of humankind that trumped economic self-interest””

    I’m pretty sure you haven’t actually read The Theory of Moral Sentiments even in part. Have you read Wealth of Nations in its entirety? In any event The Theory of Moral Sentiments is widely regarded as providing the ethical, moral, and other underpinnings for The Wealth of Nations, and that the Wealth of Nations is not taken in context without understanding the precepts set forth in Moral Sentiments. While it is not exactly a page turner, Moral Sentiments lays the groundwork for understanding that Smith’s concepts of capitalism, and you have a different understanding of Wealth of Nations when taken in that context. I suggest you give it a read.

  25. B August 13, 2021 11:16 am

    @ ipguy “I respectfully reply that you are complaining about how capitalism works in the real world as opposed to how it works on paper.”

    Dude, in case you’ve missed recent events, I responded to THE DEFINITION you provided. Further, you also missed that you never mentioned that government was interfering with the pharma business as you complained about big pharma. Hence, my statement about government interference in the market is on-point.

    Finally, your complaint about “Pharma Bro” has what to do with the patent system?

    “I’m pretty sure you haven’t actually read The Theory of Moral Sentiments even in part.”

    I was thinking the exact same thing about you, but feel free to cite the chapter and page you rely on for your previous statement. I’m betting you can’t. Prove me wrong. Stop spewing basic info that anyone could glean from a 5 minute Wiki review, and cite the chapter and page supporting your assertion. Your snark impresses no one.

    “Have you read Wealth of Nations in its entirety?”

    Long ago and in a university far far away. I also read The Hobbit, Zen and the Art of Motorcycle Maintenance, The Panchatantra, Lucretius, and Principia Mathematica that same year or thereabouts.

    That said, why don’t you try for a conversation sans the petty snark?

    @ MCI “Pharma Bro is a prime example that the changes needed don’t involve patents.”

    On this we 100% agree.

    @ Greg DeL “Do you see a correlation between political regime and overdose deaths in the data? I confess, none is evident to my eye.”

    I never stated any one regime is to blame, and both sides of the aisle have their open border advocates. I merely state that vast amounts of drugs cross the southern border every year, and that perhaps this is an issue we need to consider.

    That said, as is shown in your own citation, the number of drug overdoses did decline for the first time – and leveled off – in 2018.

  26. Anon-noyed August 13, 2021 12:16 pm

    @25

    Love the “Back to School” quote, ipguy! That scene is a classic!

    From Wealth of Nations:
    “No society can surely be flourishing and happy, of which the greater part of the members are poor and miserable.”

    The title of Chapter 3 of Moral Sentiments is “Of the corruption of our moral sentiments, which is occasioned by this disposition to admire the rich and the great, and to despise or neglect persons of poor and mean condition.”

    Smith considered despising and neglecting the poor to be a corruption. Just goes to show how morally corrupt the GOP leadership has become.

  27. ipguy August 13, 2021 2:35 pm

    @26

    Whatever you say, “Dr. BarBay,” whatever you say.

  28. ipguy August 13, 2021 2:40 pm

    @27

    Smith believed in self-interest because he believed the effects would spill over positively for others, but he believed that the self-interest would also include moral restraint that would act as a brake on the self-interest going too far.

  29. B August 13, 2021 4:46 pm

    @ Annoying “Love the “Back to School” quote, ipguy!”

    Of course you would. It substitutes for an argument on the merits to some.

    “From Wealth of Nations: . . . . The title of Chapter 3 of Moral Sentiments is . . . . .”

    Yes, Smith believed in morality and creating wealth. From this, ipguy’s statement is not supported – nor can it be.

    “Smith considered despising and neglecting the poor to be a corruption. Just goes to show how morally corrupt the GOP leadership has become.”

    First, you (along with ipguy and AAA JJ) were one of the people mocking Mississippi – the poorest of the poor states – a few weeks ago. That makes you morally corrupt according to Adam Smith.

    BTW, under Trump unemployment was lowered to record lows and average household income rose $5K in the first two years. So “morally corrupt” that Obama tried to take credit for it. My point: it’s better to take steps that actually solve poverty than to merely virtue signal concerns for the poor.

    Want to hear about real corruption? This latest boondoggle “infrastructure” bill that’s light on actual infrastructure but sees fit to regulate cryptocurrencies. Cryptocurrencies, especially non-inflationary cryptos, such as Bitcoin, are a mechanism that hinders the U.S. government from inflating its way out of massive debt it incurs.

    That’s corruption – supported by every Democrat in the House and a third of Republicans.

    Now, let’s try something novel and get back to the point of this thread – the effects of IP on the costs of drugs and innovation in the pharma industry.

  30. Pro Say August 13, 2021 5:11 pm

    Well . . . after reading Gene’s article and all the comments . . . ’bout the only thing that seems certain . . . is that Feldman is a doofus . . . with a capital “D.”

    And I agree that — if Congress and/or SCOTUS doesn’t right the sinking eligibility ship — pharma (and the life science’s) will soon enough be infected by the quickly-spreading CAFC’s Mayo / Alice cancer.

  31. Anon-noyed August 13, 2021 6:00 pm

    @30

    LMAO@U!

  32. Anon-noyed August 13, 2021 9:18 pm

    @30

    “First, you (along with ipguy and AAA JJ) were one of the people mocking Mississippi – the poorest of the poor states – a few weeks ago.”

    I’m sure you meant to provide a link to support that. You’re well known to tell lies and make misrepresentations.

  33. Zete4vr August 14, 2021 4:35 pm

    @29

    Those 18th Century philosophers still had.a sense of noblesse oblige which is completely absent from modern Trump-types. The approach to capitalism expressed by Trumplikin conservatives includes a strategy of eliminating any sort of government-backed social safety net for the poor and weak and allowing them to suffer. Adam Smith’s philosophy of capitalism runs contrary to this.

  34. ipguy August 16, 2021 1:09 pm

    @33

    I would also like to know where I supposedly mocked Mississippi.
    Feel free to cite the chapter and page you rely on for your previous statement, B. I’m betting you can’t. Prove me wrong. Your snark impresses no one.

  35. xtian August 16, 2021 3:00 pm

    I wonder is anyone on this comment thread is willing to admit (or not) whether they work for a pharmaceutical company?

    @Anon Comment #4 – I agree with the transparency argument. Once a drug is approved, how its priced through the PBMs is ugly.

    That said, how can the industry reduce the enormous investment companies make to identify a mechanism of a disease, find a compound to reverse that disease mechanism, and study it in Phase III humans trials and wait for FDA approval?

  36. Greg DeLassus August 16, 2021 5:50 pm

    I am in-house patent counsel to a pharmaceutical company.

  37. ipguy August 16, 2021 7:50 pm

    I’ve prosecuted Cannabis-related patent applications, but nothing for what you would call “Big Pharma”.

  38. B August 16, 2021 10:45 pm

    @ ipguy I would also like to know where I supposedly mocked Mississippi. You any the whole elitist left-wing clan of personal attacks

    https://www.ipwatchdog.com/2021/03/21/choose-next-federal-circuit-judge-stick-experience/id=131142/

  39. B August 16, 2021 11:16 pm

    @Zete4vr “Those 18th Century philosophers still had a sense of noblesse oblige which is completely absent from modern Trump-types.”

    There’s a difference b/t conservatives and the modern liberal. First, giving away other people’s money to a voting block isn’t “noblesse oblige.” Second, conservatives strive to fix social ills, as oppose to merely virtue signal their “caring.” BTW, in case you haven’t seen the latest reports on inflation, this is the FedGov’s deliberate approach to silently tax the middle class and poor. https://www.atr.org/inflation-surging-under-biden-administration?amp

    “The approach to capitalism expressed by Trumplikin conservatives includes a strategy of eliminating any sort of government-backed social safety net for the poor and weak and allowing them to suffer.”

    Please – name one Republican holding federal office that has voiced this opinion.

  40. B August 17, 2021 10:00 am

    @ ipguy “I would also like to know where I supposedly mocked Mississippi. Feel free to cite the chapter and page you rely on for your previous statement, B. I’m betting you can’t. Prove me wrong. Your snark impresses no one.”

    Here you go. The big irony – you’re fine with bigotry so long as the bigot has a “D” after his name.

    https://www.ipwatchdog.com/2021/03/21/choose-next-federal-circuit-judge-stick-experience

  41. Moderate Centrist Independent August 17, 2021 12:21 pm

    You’re going to need to do some work to overcome your persecution complex, B.
    I can’t see anywhere that ipguy mocked Mississippi. Unless you’re referring to where he put a Trent Lott quote where Lott proudly stated that “his state”, referring to Mississippi, had voted for segregationist Strom Thurmond when Thurmond ran for President. That’s hardly mocking Mississippi.
    Mississippi voted for segregationist Strom Thurmond, did it not? Strom Thurmond was one of the longest serving Republicans in the Senate prior to his death, was he not?

  42. Anon-noyed August 17, 2021 12:45 pm

    “Please – name one Republican holding federal office that has voiced this opinion.”

    Ben Carson for one. Throwing people out of the social safety net was kind of his thing. Not that I expect you to have the maturity or grace to accept that. The conservative spin is that they are helping people, not hurting those people by throwing them out of government programs. I’m sure you’ll try to spin it that way, too.

  43. B August 17, 2021 1:54 pm

    @ MCI “I can’t see anywhere that ipguy mocked Mississippi.”

    Yeaaaaah, Mississippi was attacked as being inbred, and all you elitist lefties, including ipguy, jumped on the bandwagon with a line of insults. Not one of you deplorables saw fit to correct one of your own. You’re all Grand Cyclops Senator Byrd (D-WV) excusing people who project your bigotry onto others.

    @ Annoying “Ben Carson for one. Throwing people out of the social safety net was kind of his thing.”

    Ben Carson? Seriously? Find a quote by Ben Carson. Cite an act of his. I’ll wait.

  44. ipguy August 17, 2021 2:13 pm

    @41

    B,
    You wrote a check that your posterior could not cash. I won that bet.

    Now, let’s try something novel and get back to the point of this thread – the effects of IP on the costs of drugs and innovation in the pharma industry.

  45. Moderate Centrist Independent August 17, 2021 6:14 pm

    @44
    In other words, ipguy said nothing of the sort , and you’re deflecting from just how badly you’ve made a fool of yourself, B. Now answer the questions:
    Mississippi voted for segregationist Strom Thurmond, did it not? Strom Thurmond was one of the longest serving Republicans in the Senate prior to his death, was he not?

  46. Robin Feldman August 18, 2021 11:07 am

    Gene, I always respect your views, even when we disagree. Pharmaceutical companies deserve enormous credit for the COVID 19 vaccines. It is a spectacular moment of science in action and of industry/government cooperation, but it serves best as an example of extensive government funding for scientific research, rather than success of the patent system.

    I view many different elements as needed to support and incentivize innovation—including effective patent and trade secret protection as well as government investment. The patent system alone cannot do it all.

    In addition, I am always skeptical when companies lobby the government for extra protection from competition. Patents protection should be both strong and finite. When companies game the system to extend that protection, competition languishes, which is counterproductive in a capitalist society.

    For those who are interested, I have a more extensive academic work-in-progress on SSRN exploring these issues in greater context titled Incentivizing Failure. (It was linked in the draft I sent to the Washington Post, but the link does not appear to have made the final publication.) Wishing you all the best with the blog—Robin Feldman

  47. xtian August 18, 2021 1:29 pm

    @Robin

    “but it serves best as an example of extensive government funding for sceintific research…” I am not sure that is quite accurate.

    I may be mistaken, but the majority of the Operation Warp Speed money was a guarantee by the Feds to buy the vaccine from the pharmaceutical companies once it was made, so that it could be given to the public for “free”. Operation Warp Speed eliminated the commercial risk, i.e., eliminated the question as to how much of this vaccine are we going to sell, and thus make an ROI, out of equation. Pharma knew how many it was to make and how many it was going to “sell” to the government.

    I think only a nominal amount of OWS money went into R&D, and to those companies that used the money for R&D, their vaccines didn’t make it to market (Sanofi/GSK, and Merck/IAVI).

    See https://crsreports.congress.gov/product/pdf/IN/IN11560

  48. B August 18, 2021 2:11 pm

    @ MCI “Mississippi voted for segregationist Strom Thurmond, did it not?”

    Well as Strom Thurman is from a different state, I know they didn’t vote for him as senator, and I’m not sure anyone presently alive in Mississippi voted for him as president.

    I do know Democrats are the only people cheering on segregation today

    https://www.fox5atlanta.com/news/its-against-the-law-atlanta-parent-filed-complaint-over-alleged-segregation-of-classrooms

  49. Anon-noyed August 18, 2021 2:56 pm

    Ask B an honest question, and he’ll give you a disingenuous answer. He’s well aware of the Trent Lott quote and knows exactly what it refers to but he can’t bring himself to admit the southern conservative history of supporting segregation.

  50. Moderate Centrist Independent August 18, 2021 3:22 pm

    You have yet to answer the questions actually asked of you.
    Mississippi voted for segregationist Strom Thurmond, did it not?
    Strom Thurmond was one of the longest serving Republicans in the Senate prior to his death, was he not?

  51. B August 18, 2021 3:54 pm

    @ Annoying “He’s well aware of the Trent Lott quote and knows exactly what it refers to but he can’t bring himself to admit the southern conservative history of supporting segregation.”

    I’ve already confessed that Trent Lott is guilty of praising Strom Thurman on his 157th birthday. However, Trent Lott is a long-time opponent of the KKK, which threatened him and his family.

    MY CONFESSION: I’ve never met a single conservative who is pro-segregation, Republicans championed the Civil Rights and Voting Rights Acts, and Democrats are still the only group championing segregation.

    https://www.yourtango.com/news/atlanta-mom-federal-civil-rights-complaint-school-segregation-black-class

    https://theblacksphere.net/2017/09/jim-crow-blacks-now-demanding-segregated-housing/

    https://www.thecollegefix.com/black-students-demand-segregated-spaces-white-students/

    https://www.thecollegefix.com/black-students-at-rice-university-demand-segregated-campus-black-house/

    https://www.dailysignal.com/2019/05/22/colleges-diversity-fixation-is-creating-segregation/

    My prediction (not the Babylon Bee): It’s only a matter of time until Democrats of color demand their own lunch counter at the House cafeteria.

  52. B August 18, 2021 4:18 pm

    @ Annoying et al.

    BTW, you want to talk about human rights? Afghan women are now subject to de-humanizing conditions, stoning, and gang rape. Forget the national humiliation, strategic issues, and destruction of trust among our allies, my heart at this moment goes out to these women and young girls as it did with the Yazidis under ISIS.

    Unfortunately Joe Biden is on vacation at Camp David and hiding from the Press, Kamala Harris is also hiding from the press, Press Secretary Jen Psaki has disappeared, and General Milley is somewhere in the basement of the Pentagon practicing his pronouns.

    Maybe these women of color can call the Whitehouse next week – maybe the week after. Americans will search for an adult in charge to take their call.

    We conservatives remain appalled as MSNBC still professes (aw it last night) that White nationalists are the biggest threat to the world.

  53. Moderate Centrist Independent August 20, 2021 12:13 pm

    Patriotic Americans remain appalled that White nationalist conservatives are the biggest threat to the US, if not the entire world.

  54. Moderate Centrist Independent August 20, 2021 2:29 pm

    @B

    Stop spinning and answer the questions actually asked of you:
    Mississippi voted for segregationist Strom Thurmond, did it not?
    Strom Thurmond was one of the longest serving Republicans in the Senate prior to his death, was he not?

  55. B August 23, 2021 1:56 pm

    @ MCI “Patriotic Americans remain appalled that White nationalist conservatives are the biggest threat . . . if not the entire world.”

    Who am I to argue with such persuasiveness

    https://www.theblaze.com/news/taliban-set-afghan-woman-on-fire-for-poor-cooking