Patent reform is far from dead, and that makes pharmaceutical companies sweat. Given the overwhelming amounts of money that such companies make from their patents, sometimes with dubious legitimacy, it’s only natural that they’d sweat the details of a plan to change the system.
And so should conservatives. For if there’s one thing that the disingenuous and often willfully dishonest ‘conservative’ opposition to patent reform gets right, it’s this: even when it’s necessary, legislation out of Washington, D.C. needs to be carefully considered and well-crafted to avoid unintended consequences.
However, in considering and crafting the next patent bill, conservatives and Republicans in Congress should take the opinions of the pharmaceutical industry with a metric ton of salt. In fact, out of the many, many people trying to get their fingers into the patent pie, perhaps only trial lawyers’ and university administrators’ concerns should be more irrelevant to conservatives.
The reason? The pharmaceutical industry’s opposition to patent reform is frankly anti-conservative, as evidenced by the fact that when it relies on conservative principles to make that opposition case, it veers into laughable levels of hypocrisy.
In brief, what the pharmaceutical industry wants most to get out of patent reform is special treatment by Washington. That is to say, it wants to be made immune to a certain type of legal proceeding known as an Inter Partes Review (IPR), in which someone who is targeted by a patent lawsuit asks the Patent Trial and Appeal Board (PTAB) of the US Patent and Trademark Office (USPTO) to invalidate the patent in question before the case ever gets to court. In essence, IPRs are a form of quality control that saves courts time and clears out junk patents before they can do real damage.
The pharmaceutical industry claims, correctly, that it has to spend more money and time on research and development to create anything approved by the FDA, let alone a patentable drug. It claims that if these patents can be challenged after they already exist, there’s no incentive to go through the whole process to begin with, which means medical research will grind to a much slower pace, if not a total standstill. For conservatives, an industry complaining about further disincentives when it’s already saddled with a Kafkaesque government bureaucracy overseeing it probably sounds sympathetic.
There’s just one problem: The pharmaceutical industry complaining about oppressive bureaucracy is rather like Charles Manson agitating for gun control. That is, it’s actually quite happy to have oppressive bureaucracy around, provided it gets to use it as a weapon.
Start with the deeply uncomfortable fact that the pharmaceutical industry is arguably one of the primary groups responsible for Obamacare. And why not? As Forbes noted in May of 2013, Obamacare was estimated to bring the industry $35 billion in profits. One particular cause of this was the Obama White House cutting Big Pharma a deal to (I’m not kidding) help it keep drug prices high in exchange for its support. For anyone who remembers the endless talking points about the cost of health care that the Obama White House wheeled out, this should rankle particularly hard. Oh, and lest you think that such a form of collusion sounds far-fetched, consider this: One of the literal architects of Obamacare, Liz Fowler, was immediately hired by Big Pharma as a lobbyist when she left the White House.
However, as is often the case when an industry lets Washington take power in exchange for letting it profit, the worm is now turning. The Wall Street Journal reported in February that Big Pharma has started panicking, as the Obama administration has decided to actually exercise its muscle against it over issues like pricing, and has been trying to muscle the administration back. Presumably, one way for Big Pharma to keep itself safe from the bureaucratic monster that it created would be to try to get other anti-consumer measures through Congress that would allow it to keep a larger share of its profits. Measures like rendering its patents infallible before the USPTO.
Conservatives should not fall for it. A partner this opportunistic, anti-competitive, and chummy with intrusive government will only taint their cause and bolster the otherwise baseless liberal charge that smaller government is a form of rent seeking by corporations. Already, the libertarian think tank CEI was smeared by Mother Jones as a hypocritical Pharma front group during the Leftist panic over CEI’s lawsuit in King v. Burwell. There is no reason for other conservatives, either in Congress or out, to want similar damage done to their credibility.
Big Pharma’s first, second, and third priority in any fight, patent reform included, is rent seeking. There is no reason at all for conservatives to play along with their disingenuous, anti-consumer shell game.