From: pinto@enuxva.eas.asu.edu (Kevin A. Pinto)
Subject: Re: AIDS drug by indian firm
Keywords: patent law, US, India
Organization: Arizona State University
Date: Wed, 6 Jan 1993 00:42:07 GMT

In article <1993Jan3.192508.6484@udel.edu>, chitoor@dwalin.cis.udel.edu (Srikrishnan R. Chitoor) writes:
>     My argument is that US patent law supports monopoly. Let us start
> with the situation where there are two companies (ofcourse can be 
> generalized to more than two) X and Y that are involved in the AIDS drug
> research. Both of them spend millions (or billions as u say) on AIDS
> research and one of them gets the drug first (say X). Now X gets to
> market the product for 17 years. 
>     Now since it is an AIDS drug, there is no demand side restraint
> (If I have AIDS, I will buy the drug with my last savings even if
> there is a slim chance of it saving my life) and there is a Monopoly
> (nobody else can produce the drug). So what else do you require to
> push up the prices (and people at X are not fools to let go of this
> opportunity, after all they are business men). 
>    So X makes a whopping profit (after `recovering' its investment).
> At the end of 17 years, we have Y facing a loss of a few million (billion?)
> dollars and X facing a profit of a few m(b)illion dollars. Now X has an
> unfair advantage (it can even buy scientists from Y). This naturally
> leads to a monopoly system (the next time X and Y start researching on
> some thing, X can pump in more resources than Y). So do u agree
> that in the long run the US patent laws encourage monopoly ?

1.	Can you give us a concrete example of this happening in the
	past or the present?

2.	The fact that company Y might have won the race does not alter the
	fact that it did not.

Company X is entitled to whatever monopoly may result from its having
carried out basic research, generated ideas and taken the risks necessary
to produce its drug or product.

The reason why patent laws have an expiration date on the patent is that
a patent _sometimes_ restricts research in a closely related field.  Patent
laws protect the investment of the producer.  They are not meant to give the
consumer the right to have a product cheap, even when that product is deemed
essential.  Bear in mind that the product in question would not exist but for
the efforts of the original inventor.

Let's consider B_W and its AZT product patent.  B_W spent millions/billions
of dollars (the amount is not important) to even come up with the idea that
AZT might have an impact on AIDS (No, it's not obvious).  They would have
experimented with several prototypes on animals and human beings, and to
put it crudely, mixed several compositions of A, Z and T before coming up
with that composition which made a difference in the treatment of the disease.
(I hope nobody takes my usage of A, Z and T literally - on s.c.i, you can never
tell! :-) ).

And then our brave inventive Indian company would have obtained a sample of
clinical AZT and analyzed it in some laboratory in Bombay for less than
Rs. 10000. (Actually, even that isn't necessary; the drug composition can
be obtained from any U.S. Patent Registry Site, such as the one in my univ).
It would have then found some other way to mix A, Z and T and presto!  A
new way to make AZT!  I don't wonder that the U.S. Trade Representative gets
pissed off.

Plainly speaking, the Indian company has hijacked B_W's research for a song.
To say that they developed a new way to produce AZT is a joke - any B.E. or
B.S. in Chemical Engineering (like me) could devise a way to produce AZT.
A product patent makes sure that these "inventors" don't get away with what
is not their due.



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Kevin Pinto			agkap@acvax.inre.asu.edu
Chem Engg, ASU, Tempe, AZ
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