Intended for healthcare professionals


Scrooge and intellectual property rights

BMJ 2006; 333 doi: (Published 21 December 2006) Cite this as: BMJ 2006;333:1279

Scooge and IP rights - Scrooge may not cause all the evils of the world

One of the problems identified with the status quo of drug research
by Joseph Stiglitz (BMJ 333, 1279-1280 (2006)) is that drug companies
currently spend more money on advertising and marketing than on actual
research. His solution to these problems is to replace the current system
of patenting new drugs with a winner-takes-all medical prize fund.

However, of all the criticisms that can be made of the patenting
system, it is unfair to suggest that it contributes to the amount of money
spent on advertising. A patent is a monopoly to a particular product. As
such, a drug company is able to market its patented product on the basis
of the product's unique clinical effects because no other product is
exactly the same. In contrast, with a system based on a winner-takes-all
medical prize fund model, product manufacturers will be in direct
competition with other manufacturers making exactly the same product. As
a result, more emphasis would have to be placed on marketing the product
on the basis of a brand to differentiate the product from one manufacturer
from another. This would not only cost more - brands are expensive to
create and to advertise - but the advertising would be less worthy and
less informative because it would have to focus on the brand of a product
rather than the unique clinical effects of the product.

A parallel should be made with the NHS on this point - now that the
NHS is moving away a system where a local hospital has a 'monopoly' on
providing health services in a particular area to a system where hospitals
compete against one another for a patient's 'custom', hospitals are now
allowed to start to advertise to attract patients. Moving away from a
monopolistic system in this case means that more money will be spent on

One of Stiglitz's other criticisms of the status quo is that it does
not encourage research in areas that have less potential for commercial
exploitation, for example in the development of drugs for diseases that
mainly affect the developing world. In a European context, the EU has
identified a problem with a similar cause: too little research is being
carried out into the effects of drugs on children because of the lack of a
commercial incentive. The EU's proposed solution to this problem is to
actually extend the term for patent protection by six months if paediatric
studies are carried out with the drug. Perhaps (and I am careful here to
leave it at only 'perhaps') a similar solution could be used to stimulate
research in other less commercially lucrative areas.

Competing interests:
I am (for my sins) a trainee patent attorney - although I used to be a research chemist

Competing interests: No competing interests

03 January 2007
Matthew Wicks
Patent attorney
WC1X 8BT (London)