Why are drug prices so high? Investigating the outdated US patent system

Between 2006 and 2016, the number of drug patents granted in the United States doubled -- but not because there was an explosion in invention or innovation. Drug companies have learned how to game the system, accumulating patents not for new medicines but for small changes to existing ones, which allows them to build monopolies, block competition and drive prices up. Health justice lawyer Priti Krishtel sheds light on how we've lost sight of the patent system's original intent -- and offers five reforms for a redesign that would serve the public and save lives.

For my husband,
it was love at first sight.

(Laughter)

Here's what happened.

Years ago, Rudy,

who I had strictly put
in the friend zone at the time,

came over to my house and met my dad,

a pharmaceutical scientist
who had just retired

after bringing a drug to market.

My dad said,

"Ah, you probably
wouldn't have heard of it.

It's for IPF,

idiopathic pulmonary fibrosis."

Rudy paused for a long time,
and then he said,

"That's the disease that took
my father's life 15 years ago."

Rudy says that this
is the moment he fell in love.

(Laughter)

With my father.

(Laughter)

Even though it was too late
for my dad to save his,

he felt that destiny had delivered us
this full-circle moment.

In my family, we have a special love
for my father's inventions.

And in particular, we have
a reverence for his patents.

We have framed patents
on the wall in our house.

And there's a recognition in our family
that everything I've been able to do --

college, law school,
health justice work --

all of it is because America
enabled my father

to fulfill his potential as an inventor.

(Applause)

Last year, I met the director
of the US Patent Office

for the first time,

and I sent my family a selfie
from that office in Virginia.

(Laughter)

I got so many emojis back,

you would have thought I had met Beyoncé.

(Laughter)

But truth be told,

I was actually there
to talk about a problem --

how our outdated patent system
is fueling the high cost of medicines

and costing lives.

Today, over two billion people
live without access to medicines.

And against this global crisis,

drug prices are skyrocketing,

including in wealthier countries.

Thirty-four million Americans
have lost a family member or a friend

in the last five years,

not because the treatment didn't exist,

but because they couldn't afford it.

Rising drug costs are pushing
families into homelessness,

seniors into bankruptcy

and parents to crowdfunding treatment
for their critically ill children.

There are many reasons for this crisis,

but one is the outdated patent system

that America tries to export
to the rest of the world.

The original intention
behind the patent system

was to motivate people to invent

by rewarding them
with a time-limited monopoly.

But today, that intention
has been distorted beyond recognition.

Corporations have teams
of lawyers and lobbyists

whose sole job is to extend
patent protection as long as possible.

And they've kept the patent office busy.

It took 155 years for the US Patent Office

to issue its first five million patents.

It took just 27 years
for it to issue the next five million.

We haven't gotten
drastically more inventive.

Corporations have gotten
drastically better at gaming the system.

Drug patents have exploded --

between 2006 and 2016, they doubled.

But consider this:

The vast majority of medicines
associated with new drug patents

are not new.

Nearly eight out of 10
are for existing ones,

like insulin or aspirin.

My organization,
a team of lawyers and scientists,

recently conducted an investigation
into the 12 best-selling drugs in America.

We found that, on average,

there are 125 patents
filed on each medicine.

Often for things we've known
how to do for decades,

like putting two pills into one.

The higher a patent wall a company builds,

the longer they hold on to their monopoly.

And with no one to compete with,

they can set prices at whim.

And because these are medicines

and not designer watches,

we have no choice but to pay.

The patent wall is a strategy
to block competition.

Not for the 14 years maximum

that America's founders
originally envisioned,

or the 20 years allowed by law today,

but for 40 years or more.

Meanwhile, prices on these drugs
have continued to increase --

68 percent since 2012.

That's seven times the rate of inflation.

And people are struggling or even dying,

because they can't afford the meds.

Now I want to be really clear
about something.

This isn't about making
the pharmaceutical industry the bad guy.

What I'm talking about today

is whether the system we created
to promote progress

is actually working as intended.

Sure, the pharmaceutical companies
are gaming the system,

but they're gaming it because they can.

Because we have failed
to adapt this system

to meet today's realities.

The government is handing out

one of the most prized
rewards in business --

the opportunity to create a product
that is protected from competition --

and asking for less and less
in return on our behalf.

Imagine awarding 100 Pulitzer Prizes
to one author for the same book.

(Murmurs)

It doesn't have to be this way.

We can create a modern patent system

to meet the needs
of a 21st-century society.

And to do that,

we need to reimagine the patent system
to serve the public,

not just corporations.

So how do we do it?

Five reforms.

First, we need to stop
handing out so many patents.

Back under the Kennedy administration,

in an effort to curb rising drug costs,

a congressman from Tennessee
proposed an idea.

He said,

"If you want to tweak a drug,

and you want to get another patent on it,

the modified version has to be
significantly better, therapeutically,

for patients."

Because of intense lobbying,

this idea never saw the light of day.

But a reimagined patent system

would resurrect and evolve
this simple, yet elegant proposition.

That to get a patent,

you have to invent something
substantially better

than what's already out there.

This shouldn't be controversial.

As a society,

we reserve the big rewards
for the big ideas.

We don't give Michelin stars
to chefs who just tweak a recipe --

we give them to chefs who change
how we think about food.

And yet, we hand out patents
worth billions of dollars

for minor changes.

It's time to raise the bar.

Second,

we need to change the financial incentives
of the Patent Office.

Right now, the revenue
of the Patent Office

is directly linked to the number
of patents that it grants.

That's like private prisons
getting paid more to hold more people --

it naturally leads to more incarceration,

not less.

The same is true for patents.

Third, we need more public participation.

Right now, the patent system
is like a black box.

It's a two-way conversation
between the patent office and industry.

You and I aren't invited to that party.

But imagine if instead,

the Patent Office became a dynamic center
for citizen learning and ingenuity,

staffed not just by technical
experts and bureaucrats,

but also by great
public-health storytellers

with a passion for science.

Regular citizens could get
accessible information

about complex technologies

like artificial intelligence
or gene editing,

enabling us to participate
in the policy conversations

that directly impact our health and lives.

Fourth,

we need to get the right to go to court.

Right now in America,
after a patent is granted,

the public has no legal standing.

Only those with a commercial interest,
usually other drug companies,

have that right.

But I've witnessed firsthand
how lives can be saved

when everyday citizens
have the right to go to court.

Back in 2006 in India,

my organization worked
with patient advocates

to challenge, legally,
unjust HIV drug patents,

at a time when so many people were dying,

because medicines
were priced out of reach.

We were able to bring down
the prices of medicines

by up to 87 percent.

(Applause)

On just three drugs,

we were able to save health systems
half a billion dollars.

Now, cases like these
can save millions of lives

and billions of dollars.

Imagine if Americans
had the right to go to court, too.

And lastly, we need stronger oversight.

We need an independent unit
that can serve as a public advocate,

regularly monitoring the activities
of the Patent Office

and reporting to Congress.

If a unit like this had existed,

it would have caught, for example,
the Silicon Valley company Theranos

before it got so many patents
for blood testing

and landed an evaluation
of nine billion dollars,

when in reality,

there was no invention there at all.

This kind of accountability
is going to become increasingly urgent.

In the age of 23andMe,

important questions are being asked

about whether companies
can patent and sell

our genetic information
and our patient data.

We need to be part of those conversations

before it's too late.

Our information is being used
to create the new therapies.

And when that moment of diagnosis
comes for me and my family,

or for you and yours,

are we going to have to crowdfund
to save the lives of those we love?

That's not the world I want to live in.

It's not the world I want
for my two-year-old son.

My dad is growing older now,

and he is still as quietly brilliant
and morally directed as ever.

Sometimes people ask us
whether things get heated between us:

the patent-holding scientist

and his patent-reforming lawyer daughter.

It's such a profound misunderstanding
of what's at stake,

because this is not
about scientists versus activists,

or invention versus protection.

This is about people,

our quest to invent and our right to live.

My dad and I understand
that our ingenuity and our dignity

go hand in hand.

We are on the same side.

It is time to reimagine a patent system

that reflects that knowing.

Thank you.

(Applause)