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Abstract:
While neoclassical economic theory suggests that arbitrage will undermine global differential pricing of pharmaceuticals, the empirical results are more complex. Pharmaceutical regulation, IP laws, global trade agreements, and company policies support differential pricing despite the pressure of arbitrage. For essential access programs in particular, the theoretical threat of pharmaceutical arbitrage is shown to be rarely observed empirically. Counterfeiting is demonstrated to be the more serious threat. These conclusions call for changes in the U.S. PEPFAR program for AIDS and in the implementation of the WTO TRIPS Agreement.

A more fundamental question, however, is whether pharmaceutical differential pricing is appropriate for consumer welfare. The usual defense of the practice within the OECD is grounded in the need for innovation incentives. This Article proposes and applies the heuristic of globally optimal appropriation (including patent rents). The heuristic alters some of the received wisdom on pharmaceutical pricing, suggesting that nonrival access to prescription drugs can be provided to low and middle income populations for all global diseases without harming innovation. By contrast, arbitrage between high income countries, such as the importation of Canadian drugs into the U.S. over the Internet, is shown to be consistent with optimal innovation incentives.

WTO, TRIPS, Doha, Essential Medicines, innovation, access, pharmaceutical, differential pricing, price discrimination, diversion

Abstract:
When I chose the title, Counterfeit Drugs: The Good, the Bad and the Ugly, some of my colleagues at this symposium blanched. They understood counterfeit drugs as Bad and Ugly, but resisted categorizing any counterfeit drug as Good. This article is intended to be provocative, challenging some of the conventional wisdom concerning counterfeit drugs.

We start with the fact that reports about the scope of pharmaceutical counterfeiting are remarkably anecdotal rather than empirical. As a professor once chided me, the plural of anecdote is not data. The FDA and the WHO must undertake comprehensive market surveillance to establish the true scope of the counterfeiting problem.

We also must speak more clearly about counterfeit drugs, with an improved lexicon. It is misleading to pretend that safe and effective cross-border drugs from Canada are similar to contaminated water passed off as erythropoietin (Epoetin alfa) by criminal gangs. They have quite distinct causes, effects and indicated solutions.

Finally, and perhaps most controversially, this article identifies the underlying cause of drug counterfeiting as the legal system of intellectual property laws. We briefly explore alternative systems which would accomplish recovery of R&D expenditures without the patent rents which attract counterfeiting.

counterfeit, drug, pharmaceutical, intellectual property, trade

Abstract:
Drug prices are uniquely susceptible to radical price reductions through generic competition. Patented pharmaceuticals may be priced at more than 30 times the marginal cost of production; the excess is the patent rent collected by the drug company while the patent and exclusive marketing periods remain. Patent rents are significant. AIDS drugs which sell for US$10,000 per person per year in the US are sold generically for less than US$200. If patented drugs could be sold at the marginal cost of production, cost effective treatments would become even more attractive, and other interventions would become affordable.

This Article proposes marginal cost (generic) pricing for most essential medicines used in the developing world. Global collection of patent rents must be relaxed in order to achieve this objective. Some damage to the profits of pharmaceutical companies would ordinarily be expected, but a properly designed buy-out mechanism can ensure adequate incentives for pharmaceutical innovation.

Two case studies are examined to illustrate the proposal: the recently-developed Human Papillomavirus (HPV) vaccines for cervical cancer and second-line antiretroviral (ARV) treatments for AIDS.

Global pharmaceutical markets and global disease burdens are mismatched, making this proposal uniquely attractive. Some 80% to 90% of the global sales of patented pharmaceuticals occur in the 30 wealthy countries which are members of the Organization for Economic Cooperation and Development (OECD), roughly similar to the World Bank's definition of 29 high-income countries. Pharmaceutical markets for patented products largely follow the money.

But the vast majority of patients needing treatment for global chronic and infectious diseases reside in non-OECD (middle- and low-income) countries. These countries include more than 84% of the world's people, and they are disproportionately sick. The global burden of disease falls most heavily where the market is least attractive.

This mismatch between global pharmaceutical markets and global disease burdens leads to an interesting opportunity. Patented pharmaceuticals could be offered to more than 84% of the world's population at generic prices. (Only high-income country patients would bear pharmaceutical patent rents). The gain in health from increasingly affordable pharmaceuticals would be considerable. The primary disadvantage of this plan would be a quite small reduction in global R&D cost recovery; but even this small deficit could be restored to the companies through a carefully designed patent buy-out mechanism.

patent, global disease, innovation, orphan disease, intellectual property

Abstract:
From the perspective of public health, limiting access programs and TRIPS flexibilities to particular diseases would be quite dangerous and unnecessary. Dangerous because the diseases of the world's rich and poor countries are converging, including non-communicative diseases such as heart disease, stroke, diabetes, cancer and depression. Radically cheaper medicines for these conditions could significantly improve health in LMICs. Limitation is also unnecessary because proven tools can be deployed to preserve high-income markets while LMICs pursue equitable flexibilities.

To date, the important global legal texts retain broad application to all relevant diseases, but the some parties continue to propose disease-specific limitations, most recently in the World Health Organization's Intergovernmental Working Group on Public Health, Innovation and Intellectual Property (the WHO IGWG). The WHO IGWG's task is to distill the WHO CIPIH Report into a global strategy and plan of action. This article hopes to influence the final text of the IGWG Global Strategy, finding that disease-specific limitations on access programs and TRIPS flexibilities are inappropriate in markets for medicines, but disease-specific programs are important in markets for neglected disease innovation.

The WHO IGWG, the WHO CIPIH, World Health Organization's Commission on Innovation, Intellectual Property and Public Health, Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), TRIPS flexibilities

Abstract:
The US is using free trade agreements to address the global free rider problem in pharmaceutical R&D. This brief article outlines several objections to that approach.

Free rider, pharmaceutical, USTR, trade agreements, R&D

Abstract:
Penicillin and other antibiotics were the original wonder drugs and laid the foundation of the modern pharmaceutical industry. Human health significantly improved with the introduction of antibiotics. By 1967, the US Surgeon General declared victory over infectious diseases in the US. But pride goes before a fall. The evolutionary pressure of antibiotic use selects for resistant strains with the least fitness cost. Effective drugs should be used. But when they are used, no matter how carefully, evolutionary pressure for resistance is created. The problem is not limited to antibiotics. Variants of the human immunodeficiency (AIDS) virus develop resistance to anti-retroviral drugs. Some pharmaceutical knowledge is exhaustible, a conclusion which upends the conventional wisdom for IP policy stretching back to Jefferson and beyond.

Unwilling to live in a post-antibiotic era, society deploys two strategies against resistance. One is research and development (R&D), allocating resources to discover new drugs. The other strategy is conservation, stewarding available antibiotic drugs and prolonging their useful therapeutic lives.

Both strategies face daunting challenges. R&D encounters diminishing returns when the easiest biological targets may have already been found. Echoing Malthus, some fear that science will not be able to keep ahead of resistance. Conservation faces the unhappy prospect of fighting an eternal rear-guard action, never winning, but merely postponing the inevitable. Even the best conservation schemes may eventually fall to resistance. Antibiotic resistance may be compared to running on a treadmill. R&D is learning how to run faster; conservation is slowing the treadmill down.

This Article describes the vanishing public domain of exhaustible pharmaceutical knowledge and begins a discussion of the public domain which extends far beyond copyright. Several prominent proposals address antibiotic resistance by strengthening patent law. I suggest a divergent approach, conserving exhaustible pharmaceutical knowledge so that the fruits of pharmaceutical innovation do not become the exclusive property of the rich, but remain the common heritage of humanity.

antibiotic, resistance, pharmaceutical, innovation, intellectual property

Abstract:
On innovation grounds, pharmaceutical patents are unnecessary in low income populations, since such markets cannot do much to support global pharmaceutical profits. The public health needs of low income populations require patented drugs to be manufactured at the marginal cost of production, without R&D cost recovery. Nonrivalrous access to pharmaceutical knowledge achieves both goals simultaneously.

pharmaceutical, pricing, patents, innovation, nonrivalrous, access, developing countries, low income countries

Abstract:
Affirmative action in education is generally justified on two grounds: as a narrowly tailored remedy for specific past discrimination, and to enhance diversity.

The paper is an amicus brief filed in the US Supreme Court cases Gratz and Grutter (the University of Michigan affirmative action cases).

This brief defends affirmative action as reparations for the crimes of slavery and legal discrimination, without the need for strict scrutiny under the Equal Protection Clause of the Fourteenth Amendment. The concept of racial preferences is also critiqued and reparations are not categorized as racial preferences. Finally, the Convention on the Elimination of All Forms of Racial Discrimination is viewed as supportive of affirmative action as a remedy for past injustice.

reparations, equal protection, affirmative action, racial preferences, fourteenth amendment

Abstract:
The Australia-U.S. Free Trade Agreement (AUSFTA), which entered into force on January 1, 2005, contains many remarkable provisions of interest to generic drug companies. The AUSFTA selectively exports U.S. generic drug laws of great import to generic drug manufacturers, and is uniquely intrusive into domestic pharmaceutical and political spheres. The AUSFTA is important both in its own right, and as a model for future U.S. free trade agreement negotiations.

Beyond the generic drug industry, the provisions are of interest to consumers who pay higher prices when generic drug entry is delayed, and stands as an example of the lack of transparency and accountability in the negotiation of free trade agreements.

Australia, United States, free trade agreement, AUSFTA, generic, pharmaceutical, Hatch-Waxman, transparency

Abstract:
One obstacle to the widespread rollout of compulsory licensure or greatly expanded access to essential pharmaceuticals is the fear that drugs intended for the poor will be diverted into high income markets, undermining pharmaceutical profits and ultimately, pharmaceutical R&D. In fact, this form of dysfunctional pharmaceutical arbitrage is rarely observed. A much greater threat to both pharmaceutical profits and public health is the production and sale of counterfeit drugs. The proposed Hubbard-Love R&D Treaty would eliminate the threat of dysfunctional arbitrage and dramatically reduce incentives to counterfeit.

IP, IPR, intellectual property, parallel trade, pharmaceutical arbitrage, counterfeit, pharmaceutical, drug, essential medicines, access, R&D treaty, innovation, diversion

Abstract:
The pharmaceutical IP system works well in high-income countries able to afford government subsidies and social insurance. It does not work for the poor in low and middle-income countries. For global diseases (Types I and II), innovation is assured by high-income country markets alone, permitting an accommodation for the poor in low and medium-income countries such as a patent buyout or other access programs which support equitable access without damaging optimal innovation incentives.

intellectual property, IP, access, innovation, essential medicines, patent, pharmaceutical

Abstract:
Poverty tours - actual visits as well as literary and cinematic versions - are characterized as morally controversial trips and condemned in the press as voyeuristic endeavors. In this collaborative essay, we draw from personal experience, legal expertise, and phenomenological philosophy and introduce a conceptual taxonomy that clarifies the circumstances in which observing others has been construed as an immoral use of the gaze. We appeal to this taxonomy to determine which observational circumstances are relevant to the poverty tourism debate. While we do not defend all or even most poverty tourism practices, we do conclude that categorical condemnation of poverty tourism is unjustified.

Poverty tours, ethical tourism, justice tourism, alternative globalization, development ethics

Abstract:
The problem of antimicrobial resistance has led some infectious disease experts and their professional societies to propose the use of transferable intellectual property rights (wildcard patents) and patent term extensions as methods to encourage antimicrobial R&D. We evaluate recent approvals of new antimicrobial classes and find the number of new introductions is higher than previously suggested. More importantly, creating new patent rights is shown to be an inefficient and possibly counterproductive response to antimicrobial resistance. Wildcard patents would operate as a more than US$40 billion annual tax on heart disease, hypertension, chronic obstructive pulmonary disease, asthma, and depression to inefficiently cross-subsidize antimicrobial R&D. Patent term extensions would likewise cost more than US$5 billion per year, hinder access, and allocate resources inefficiently. Alternative public funding of antimicrobial research could be a more effective use of these funds. Conservation efforts to encourage the prudent use of antimicrobial drugs should be directly reimbursed. Patent owners should be compensated for both conservation efforts and valuable innovation.

intellectual property, antimicrobial resistance, wildcard patents, patent extensions

Abstract:
Trade agreement negotiations are routinely cloaked in secrecy, a model that may have suited the Eighteenth Century, but has no place in modern democracies. Transparency deficits have led to capture by powerful industries, sometimes to the detriment of public health. This is a standard account of the WTO TRIPS Agreement, but the pattern is being repeated, in a new regime, in the Anti-Counterfeiting Trade Agreement (ACTA) and related efforts. In the context of pharmaceuticals, ACTA should be limited to deliberate trademark violations and should not be expanded to encompass other intellectual property rights such as patent infringement. Recent seizures of generic medicines by Dutch authorities highlight the danger to legitimate and valuable global generic drug markets from overzealous enforcement of border control regimes.

counterfeit, drug, pharmaceutical, Anti-Counterfeit Trade Agreement, ACTA, IMPACT

Abstract:
The Tragedy of American health care is the stubborn persistence of disparities in Black health, one hundred and forty years after Emancipation, and more than four decades after the passage of Title VI. Formal legal equality has not translated into actual health equality. This Tragedy is deeper and older than mere legal forms; it has been supported by powerful social institutions, including some governments, charities, market participants, religions, ideologies, and cultures. Black health disparities interact with other vestiges of slavery such as disparities in wealth, education, employment and housing. They have permeated the American health experience. Efforts to eliminate Black health disparities will require something more transformative than Title VI. One possible remedial candidate is reparations for disparities in Black health.

Disparities, health, race, reparations, Black

Abstract:
The US government has embarked on a trade strategy to address alleged free riding by raising patented prescription drug prices abroad. This strategy is unwise and dangerous.

It is likely to 'succeed' in low and middle income countries, desperate to sign a bilateral trade agreement with the US. Increasing drug prices in these countries will greatly damage health, given relatively high demand elasticities for pharmaceuticals in these populations; modest cash resources for health care; and grave health needs. In short, the strategy will kill people in poorer countries.

Most drug sales and profits are in the rich OECD countries, but the US trade strategy will be ineffective in these countries. The EU and Canada will likely resist any US attempt to interfere with a core domestic policy such as drug reimbursement. The recent experience in the US-Australia Free Trade Agreement bodes ill for the US strategy.

OECD, drug, pharmaceutical, pricing, reimbursement, free riding, differential pricing

Abstract:
This is the “Physicians’ Brief” filed in the Second Circuit data mining cases (IMS v. Sorrell) on behalf of amici curiae New England Journal of Medicine, Vermont Medical Society, Massachusetts Medical Society, New Hampshire Medical Society, National Physicians Alliance, and American Medical Students Association. Data mining of prescriber-identifiable (PI) medical records offends the privacy of the physician, but also permits companies to identify particular patients against their wishes. Data mining assists drug companies in illegal off-label promotion by identifying both high and low prescribers for promotional attention. Data mining has also supported the promotion of dangerous drugs. In addition to the privacy concerns, these practices are dangerous and raise health care costs. The Vermont Prescription Privacy Law is part of a larger statutory framework of state and federal laws protecting medical privacy. Federal law has carved out a special role for state medical privacy laws, protecting them from federal preemption. Furthermore, the First Amendment does not protect speech when the underlying data was obtained illegally. Vermont satisfies the Central Hudson test and the Prescription Privacy Law should be upheld. The First Amendment does not require this Court to overturn the legislative determination by the elected government of Vermont, especially when the State has extensive experience as a health care payor and is well versed in cost control options. Moreover, the Prescription Privacy Law does not ban data mining, but leaves this important decision in the hands of the person best able to decide whether it helps the patient or not – the prescribing physician.

public law, constitutional law, first amendment, health law, electronic health records, privacy, data mining, pharmaceuticals, marketing

Abstract:
Disparities in Black health began in slavery, were reinforced in segregation and racism, and persist today despite significant remedial efforts. In the last decade, the statistics about Black health disparities show no improvement. The caustic history of slavery, racism and segregation hasn't been completely undone. Fundamental changes are still necessary to repair deficits in Black health.

But the election of Barack Obama has changed the relevance of reparations as a political tool for making these changes. We elected a Black man as President, and he refused to apply reparations talk to social programs of uplift for disadvantaged communities. Obama struck broader themes, bypassing reparations for slavery. At this point, we should let reparations rest as a political agenda, although it retains some relevance as a heuristic tool.

reparations, Obama, health disparities, disparities, racial disparities, slavery, segregation

Abstract:
On April 19, 2005, the US Senate HELP Committee held long-delayed hearings on importing cheaper foreign drugs (the Dorgan-Snowe bill, S.334). At the Hearing, Dean Arnold of Emory University School of Law challenged the Dorgan-Snowe bill as unconstitutional and contrary to international law. This written testimony responds to these arguments and demonstrates that the Dorgan-Snowe bill is a constitutional exercise of Congressional power over interstate and foreign commerce, and is consistent with US international obligations, including the TRIPS Agreement.

Drug importation, Dorgan-Snowe, reimportation, FDA, constitution, international law

Abstract:
Compulsory licensure is one of the flexibilities retained under TRIPS to permit countries to support public health while granting pharmaceutical patents. The United States Government appears to take the position that compulsory licensure and other TRIPS flexibilities must be limited to certain infectious diseases, namely AIDS, tuberculosis, and malaria. These proposed limitations are not supported by the text of Articles 31 and 31bis of TRIPS or by the negotiating history of the Agreement. Introducing disease-based limitations would be unwise, as the developing world is undergoing a demographic transition, with increasing shares of its disease burden coming from non-infectious diseases. Public health calls for retaining TRIPS flexibilities in all categories of human need.

compulsory license, TRIPS, pharmaceuticals, USTR, disease

Abstract:
Antibiotic effectiveness is a common pool resource that can be prematurely depleted through resistance. Some experts warn that we may face a global ecological collapse in antibiotic effectiveness.

Conventional wisdom argues for more intellectual property rights to speed the creation of new antibiotics. Recent theoretical literature suggests that conservation-based approaches may yield superior results. This Article describes a novel typology for organizing these emerging theories, and provides an early empirical test of these models, using proprietary data on the sales of vancomycin, an important hospital antibiotic for the last three decades.

The results challenge the assumptions in several models, and will force a reevaluation of the role of intellectual property rights in antibiotic resistance and conservation. In particular, insurance reimbursement may be a more effective policy lever than patent law to preserve antibiotic effectiveness.

antibiotic, antimicrobial, resistance, pharmaceutical, innovation, intellectual property, patent, reimbursement, MRSA, public health

Abstract:
Congress may reform drug pricing policies under Medicare Part D as part of a larger health reform effort. Currently, the "noninterference" provision prevents the government from negotiating drug prices on behalf of Medicare Part D prescription drug plans. Commonly considered reform proposals borrow ideas from Medicaid, either through returning dual eligibles to Medicaid drug pricing or by imposing mandatory rebates across the Part D population. We examine a menu of other options, including value-based pricing; expansion of generic and therapeutically equivalent substitution; increased formulary diversity; importation; and limited antitrust waivers. These latter options may reduce federal spending without direct government price negotiations.

Drug costs, Medicare Part D, therapeutic substitution, drug importation

Abstract:
Human papillomavirus (HPV) vaccines hold great promise for preventing cervical cancer, but 93 percent of mortality worldwide occurs in low- and middle-income countries, where high vaccine costs can restrict dissemination. Current models for promoting international access to health care innovations include differential pricing, advance market commitments, and voluntary and compulsory licensing. Some of these mechanisms have been effective, but much room for improvement remains. We discuss the usefulness of a new type of license that uses market forces to lower prices through generic competition in low- and middle-income countries while ensuring that pharmaceutical companies are appropriately reimbursed for their research and development.

Compulsory license, HPV vaccine, generic open license, access to vaccines