Delinkage and the Patent System for Pharma: Trouble Ahead?

While the term “delinkage” has been around since at least 2005, it is not seen or heard very often.  It is the term used in the biomedical field by lawyers and politicians to mean a new way of funding drug R&D such that the patent system could be replaced with the result that a drug monopoly would not exist and drug prices would be significantly lower.  One of the advocates of this is Presidential candidate Bernie Sanders submitted the Medical Innovation Prize Fund as legislation in 2017 that would deny monopoly rights to pharma innovators and create a government fund.

Delinkage is discussed in a Patent Strategy article Delinkage embraced innational elections as alternative to patents (ManagingIP, C. Kilpatrick, Nov. 14, 2019)  The article notes that in 2017 prescription drug spending was $334B and that US national healthcare spending was 17.9% of GDP.  That’s right, the US GDP, which is now at $20T devotes 18% toward healthcare! That’s approaching $4T when all healthcare from all sources are included! The high price of drugs is a big part of the escalation. Anecdotes and reports abound of grossly high prices for a drug and patients who go without needed medication because they cannot afford it.

“We cannot control costs, reduce access barriers and protect and enhance innovation unless we change the way we finance biomedical R&D.  Delinkage is a radical and transformative approach to bring policy coherence to objectives regarding access, innovation and cost control.”  (Knowledge, Ecology International, Delinkage.org)

The fact that this has been floating around since 2005 is proof positive that there is not a lot of momentum behind it.  Fundamental questions abound about how, how to, what if, where would the money to fund multiple projects over multiple years come from?  What if it doesn’t work?  Who pays?  What would the impact on the patent system -- defined in the US Constitution -- be?  There are international implications for patents so how would delinkage work globally?  What happens to the patent system if biomedical is carved out?  Is this a slippery slope, domino effect?

At the risk of getting way out in front of our headlights, here is a possible middle road for consideration.  Keep the existing patent system as is or improved, allow the pharma company to obtain funding (much of it comes from the federal government anyway, including FDA, DARPA, Health and Human Services, etc.).  When the drug is approved for a market, the patent(s) is(are) treated like a Standards patents.  That is, it must be licensed to any and all, with a standard royalty rate, with all appropriate terms and conditions.  Multiple providers should result in reduced prices. 

How do we control costs while protecting innovation? Delinkage might be a possible solution in Pharma.

Non-Sustainable Healthcare Costs Revisited

It is important to note the projection that Hall and Knab identified in a 2012 article related to healthcare costs in the US. Healthcare costs in the US had increased from 6% of GDP a few decades ago. Healthcare costs for several decades had increased by about 10% per year. During the Great Recession, this run-away healthcare costs has reduced to 4% or 5% per year, but still double or triple the rate of inflation. Some of the calming of combined healthcare costs can be attributed to many drug patents expiring, to the great recession, and to Obama Care (especially the early years of ACA).

So, here is the trick question. If health care inflation rises back up to 10% per year, GDP growth is at 2.5% and general inflation is 2%, how many years before combined healthcare costs exceed the US GDP? Obviously, the out-of-control healthcare costs is not sustainable, but this question helps to put it all into focus. Answer: In the described case, it would take less than 24 years before healthcare costs exceeded the US GDP!.  For healthcare to increase to 50% of the US DGP would take only about 14 years.

This out-of-control costs is horribly unacceptable. It is an unsustainable and compounding problem. Plus, the US spends more on healthcare (pre capita) than any other country, and generally has worse results!

So, we are back to the question, what can be done here in addressing this problem? Ignoring the problem, and even adding to it, like the federal deficit, has an ugly way of coming back and biting us in the hinny.

Maybe there’s something to the delinkage approach that can work for (almost) everyone and make a difference in bending the healthcare costs curve?

Just to be clear, we at IPZine love innovation, we fully respect and believe in Intellectual Property, and we like capitalism – especially in places where it is sustainable and doesn’t create unmaintainable results.

Delinkage has interesting possibilities.

Reference

Hall, E. B., & Knab, E. F. (2012, July). Social irresponsibility provides opportunity for the win-win-win of Sustainable Leadership. In C. A. Lentz (Ed.), The refractive thinker: Vol. 7. Social responsibility (pp. 197-220). Las Vegas, NV: The Refractive Thinker® Press. ISBN: 978-0-9840054-2-0

Potatoes and Patents

Patents, Potatoes and Pomegranates 

“I remember thinking- there cannot be anything clever in delivering beans…”  That was the reaction of Lucy Wojcik in 2014 being interviewed for the job of IP attorney at Ocado, an online supermarket company in the United Kingdom.

It does furrow eyebrows when considering the part, if any, IP would play in a company that grows vegetables and fruits and then distributes them as meals, but now Ms Wojcik has a decidedly different view, https://patentstrategy.managingip.com/Articles/110?from=daily.  As she came to find out even in the supermarket business, “… as soon as you have problems that need solutions and engineers, you are generating IP.”

The Ocado and its emphasis on IP serves as today’s model of how to maintain a competitive presence today and tomorrow.  With very few exceptions, a company today needs a strong R&D/IP culture to survive.  It must be an integral of the conduct of business, a primary consideration in company strategic planning.  It should be the source of new, competitive products and services as well as the mechanisms for protecting those products from competitive inroads.  A comprehensive tour de force for the “how to” is Perpetual Innovation™ A guide to Strategic Planning. Patent Commercialization and Enduring Competitive Advantage by Hall & Hinkelman available at Amazon and Lulu.

Perpetual innovation™ Patent Guide & Patent Primer: http://www.lulu.com/spotlight/SBPlan

Yeti, cool ideas and lots of patents

Yeti has a rather cool new cooler out, the Hopper(r) M30 uses a magnetic seal. Although it might be a bit gimmicky, it should work much better than the heavy (klunky) zippers. They say that it is nearly leak proof. GearJunky does a nice review of the M30. For $299.99 at high quality sporting goods stores like Dicks, you too can have one.

Yeti is a $2.5B market cap company, up about 70% from its IPO. It is hard to maintain a premium brand in an era of knock-offs. But Yeti is and continues to do so.  I got in on the IPO, sold half at a good profit, and held on through the couple rough patches for a consumer product like this. They came out early for better (sane-er?) gun controls, and had NRA members making a spectacle (viral videos) of throwing Yeti coolers in the dump. (That was an ugly couple days for the stock.)

In Sept. 2019, Yeti has just introduced a major line of coolers for "everyday bags" adventures and the Urban crawler: Crossroads(tm) backpacks and totes! Press release at Reuters. Big purse or a backpack. Not sure if it will replace your Prada, but it should keep your beer in the office cold. (Maybe that's one reason why Yeti stock popped about 8% on 9/4.)

"We already offer premium bags designed to excel in harsh outdoor conditions. But even the world's most extreme adventurers need something durable and comfortable to keep them organized during their daily commute," says YETI CEO, Matt Reintjes. "Our Crossroads bags offer YETI's signature durability and performance, but are designed for your everyday adventure." 

Yeti is a premium brand with a premium price, and everybody likes to do knock offs. Trademarks are helpful. A big patent portfolio is one way to keep the knock-offs at bay. Here's Yeti's patent page by product.

PatentBuddy summarizes Yeti patents:

YETI COOLERS LLC AUSTIN, TX

257 active patents, with 34 applications.

Updated 9/5/2019.

FinTech unicorns are taking out some BIG bank Donkeys

Here's a great InfoGraphic about the FinTech market and the unicorns ($2B startups) that are hanging out, and disrupting, in the Financial space.
Natania K brought it up on LinkedIn:

Our Global Startup Heat Map showcases 4 top asset management solutions, ready to impact the energy industry: http://bit.ly/2L2FlfE

I love this "Innovation Map" and the unicorns are proof positive that the addressable market of some of the slices of new Fin Services are addressable and viable (now or soon). So the trillion dollar question is: what does the brick and mortar (BnM) have in store. BnM are looking in the rear-view mirror, and they have low visibility of the future. The reason that they have low visibility, is because -- after a couple hundred years of doing business in the office -- it is hard to change the stripes on a donkey.

But the changes they are a come'n, and the storefronts will be a closing.

FinTech unicorns are going to be taking out some BIG bank Donkeys that are hanging out on every major business corner.

What do you think, what FinTech services are most disruptive?

Here's a article about Borophene that could be much more promising than graphine... using boron atoms not carbon.... The technology is all about the future of smallness for computing and more.

Making flat layers of atoms has interesting applications. But Borophene seems to allow for crystal-type layouts that have lots of interesting properties. It should handle heat well, it is flexible, and it conducts electricity. The applications are for computers, of course. Seems extremely promising for various types of batteries, starting with Lithium.

But the many other possibilities include the fact that Borophene can attract and hold hydrogen atoms, at a rate of up the 15% of weight.

Borophene is new, really only available since 2015.
Very cool technology. Lots of work to be done before it is prime-time.

Can't wait to see where this technology leads us.