Patent Fences and Constitutional Fence Posts: Property Barriers to Pharmaceutical Importation
86 Pages Posted: 13 Oct 2004
A diverse group of politicians and public policy advocates have come together in the last year to advocate for the importation of inexpensive drugs from countries like Canada as a means of bringing down the high cost of medicine in the United States. Several state and municipal governments have joined the debate by proposing plans to provide foreign drugs to their citizens. While the safety of imported drugs has been the primary issue to date, a more significant set of obstacles for such schemes may be the patent rights covering some of the most critical treatments. Surprisingly, the subject has received very little attention, and the application of current law in this context - particularly when governments are involved - is astonishingly unclear.
This paper investigates the current legal framework and finds that the application of full constitutional property protections to the importation conflict would produce surprising and powerful results: (1) private organizations and municipalities share the same, crushing liability under the Patent Act; (2) despite Eleventh Amendment immunity in federal courts, state governments face nearly equivalent liability for takings claims based on the Fourteenth Amendment; (3) the federal government confronts liability under the Fifth Amendment that broadens its exposure under the recognized just compensation statute; and (4) attempts by Congress to modify the Patent Act to permit importation would likely constitute an unconstitutional taking. The paper concludes that such strong property protection is not necessarily anomalous and may reflect the continued propertization of intellectual property under U.S. law, exemplifying the legal equalization of intellectual property and tangible property.
Keywords: drug, pharmaceutical, import, patent, intellectual property, parallel import, reimportation, fifth amendment, fourteenth amendment
JEL Classification: F1, I1, O38, O39, K12, K34
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