Pharmaceuticals, Patents, and the Media

by Sebastian Benthall

I had an interesting conversation the other day with a health care professional. He was lamenting the relationship between doctors and pharmaceutical companies.

Pharmaceutical companies, he reported, put a lot of pressure on doctors to prescribe and sell drugs, giving them bonuses if they sell certain quotas. This provides an incentive for doctors to prescribe drugs that don’t cure patients. When you sell medicine and not health, why heal a patient?

I’ve long been skeptical about pharmaceutical companies for another reason: as an industry, they seem to be primarily responsible for use and abuse of the patent system. Big Pharma lobbies congress to keep patent laws strong, but then also games the patent system. For example, it’s common practice for pharmaceutical companies to make trivial changes to a drug formula in order to extend an existing patent past its normal legal term (14 years). The result is a de facto Sonny Bono law for patents.

The justification for strong patents is, of course, the problem of recouping fixed costs from research investment. So goes the argument: Pharmaceutical research is expensive, but pharmaceutical production is cheap. If firms can freely compete in the drug market, new firms will enter after a research phase and prices will drop so the original researching company makes no profit. Without that profit, they will never do the research in the first place.

This is a fair argument as far as it goes.

However, this economic argument provides a cover story that ignores other major parts of the pharmaceutical industry. Let’s talk about advertising. When Big Pharma puts out a $14 million dollar Super Bowl commercial, is that dipping into the research budget? Or is that part of a larger operating cost endured by these companies–the costs of making their brand a household name, of paying doctors to make subscriptions, and of lobbying for a congenial political climate?

A problem is that when pharmaceutical companies are not just researching and selling drugs but participating as juggernauts in the information economy, it’s very hard to tell how much of their revenue is necessary for innovation and how much funds bullying for unfair market advantage that hurts patients.

There are some possible solutions to this.

We can hope for real innovation in alternative business models for pharmaceutical research. Maybe we can advocate for more public funding through the university system. But that advocacy requires political will, which is difficult to foster without paid lobbyists or grassroots enthusiasm. Grassroots enthusiasm depends on the participating of the media.

Which gets us to the crux. Because if big media companies are cashing out from pharmaceutical advertising, what incentive do they have to disrupt the economic and political might of Big Pharma? It’s like the problem of relying on mass media to support campaign finance reform. Why would they shatter their own gravy train?

Lately, I’ve been seeing political problems more and more as aligned with centralization of the media. (Not a new observation by any means, but here I am late to the party). There are some major bottlenecks to worldwide information flow, and economic forces battle for these like mountain passes on ancient trade routes. Thankfully, this is also an area where there is a terrific amount of innovation and opportunity.

Here’s an interesting research question: how does one design a news dissemination network with mass appeal that both provides attractive content while minimizing potential for abuse by economic interests that are adversarial to the network users?