By Scott Burris
I am going to take a slight detour from health law to talk about legal education. This week the Times was all over a story about the need to drastically reform law school right now, and in the classic panic mode, one particular model was being embraced with the same unmixed faith with which a drowning person embraces a life preserver: cutting law school to two years. This was a main suggestion of the poster boy of reform, Brian Tamanaha. I liked his book as a call to arms and expose. I learned, for example, that I was employed by one of the few schools that did not run up faculty salaries. What I didn’t like is the focus on cost: there’s probably a lot more wrong with law school than the price tag, and, in the absence of evidence or even a serious theory, I don’t see how shortening law school would solve its problems.
Brian talks a lot about cost and time spent in school, and much of this discussion seems to me to assume that law school is mainly about training people to be lawyers within a fairly traditional conception of what the proper training for a lawyer should be. He recounts disagreements, repeated many times over a century, between a “trade school” and an “academic” model. In the former, students learn the basic skills of research and writing (and we’d add nowadays things like interviewing and counseling and trial practice), while in the latter there is also some sort of additional training, or an approach to learning, that entails getting a broader understanding of the legal system.
In my final post on reverse settlements I want to offer three thoughts that are more directly related to the legal question of how to treat reverse settlements under antitrust law.
First, it strikes me as odd that we scrutinize reverse settlements of Paragraph IV challenges differently than settlements of patent suits of non-drug, even non-health products. As Einer acknowledges in his Texas Law Review piece, nearly all patent litigation affects market structure and thus both the level of competition and the amount of consumer welfare (Elhauge and Krueger 2012). In each of those cases, because the public is not party to the litigation, settlements between patent holders and alleged infringers will – in theory and perhaps in practice – tend to hurt consumers. (The monopoly-duopoly wedge that gives rise to the problem of reverse settlements is by no means unique to the drug market.) Yet my patent law colleagues tell me there is no systematic review of non-drug patent settlements as is being urged of drug settlements in the FTC v. Watson case. It seems that under the FTC view, drug patents would be treated more harshly than other patents. I am not sure why that should be the case under antitrust law.
Second, the critical question in the antitrust litigation is the baseline against which reverse settlements are judged. Reverse settlements are only problematic under antitrust law if they extend patent duration or scope beyond some baseline. Should that baseline be expected duration with full litigation and no settlement – as critics of reverse settlements urge – or something else? For expected litigation to be the baseline, one has to assume that Hatch-Waxman modifies patent law and that patent duration after litigation is what is now required. I am not sure these assumptions are appropriate.
In this third post on reverse settlements, I examine whether traditional legal standards for judging whether a drug patent is valid captures the social value from a drug patent. This is important because the FTC takes the position that reverse settlements extend the expected life of a drug company’s patent as compared to litigation over patent validity under traditional legal standards for judging patent validity. I conclude that those standards may seriously undervalue the social benefit of drug patents, even invalid ones. First, patent validity standards do not appreciate that all drug patents – valid or not – are necessary to compensate drug companies for conducting clinical trials, which are half the cost of all R&D and are socially valuable even if the drug patent is not valid. Second, profits from a drug patent – even if the patent is invalid – sustains research on a large number of other drug patents – which may be valid. That cross-subsidization suggests a branded drug company ought be judged on their portfolio of patents, not on individual patents. Traditional patent validity standards fail to do that.
To be clear, I understand that patent law standards for validity are not perfect, and I do not expect them to be. What I suggest is that there is a worse fit between patent validity standards in the pharmaceutical industry than in other industries. This is relevant for antitrust analysis because, if patent validity standards undervalue drug patents, then eliminating reverse settlements undervalues them even further since these settlements putatively extend the expected patent life of drug patents.
Let me begin with my first substantive claim: all drug patents, whether valid or not, are socially useful. All drug patents encourage production of useful public goods, specifically information about whether a drug works. The main reason is that, unlike patents for other products, a patent for a drug is obtained before research on the drug is completed. Specifically, drug companies obtain patents on molecules after lab and animal testing, but before clinical test, i.e., testing on humans. Yet human testing is roughly half the cost of all drug R&D (DiMasi, Hansen, & Grabowski, 2003). Moreover, the results from clinical trials, which are made public as part of the drug approval process, are a public good. Once a drug is shown to be effective, everyone knows whether the molecule is medically valuable. If a company did not have a patent that could prevent other companies from producing that molecule, it would never conduct the trial in the first place!
Glenn Cohen and co-authors have a new open-access piece out in BMJ: “Ethical and Legal Implications of the Risks of Medical Tourism for Patients: A Qualitative Study of Canadian Health and Safety Representatives’ Perspectives.”
Here’s the abstract – take a look:
Objectives Medical tourism involves patients’ intentional travel to privately obtain medical care in another country. Empirical evidence regarding health and safety risks facing medical tourists is limited. Consideration of this issue is dominated by speculation and lacks meaningful input from people with specific expertise in patient health and safety. We consulted with patient health and safety experts in the Canadian province of British Columbia to explore their views concerning risks that medical tourists may be exposed to. Herein, we report on the findings, linking them to existing ethical and legal issues associated with medical tourism.
Design We held a focus group in September 2011 in Vancouver, British Columbia with professionals representing different domains of patient health and safety expertise. The focus group was transcribed verbatim and analysed thematically.
Participants Seven professionals representing the domains of tissue banking, blood safety, health records, organ transplantation, dental care, clinical ethics and infection control participated.
Results Five dominant health and safety risks for outbound medical tourists were identified by participants: (1) complications; (2) specific concerns regarding organ transplantation; (3) transmission of antibiotic-resistant organisms; (4) (dis)continuity of medical documentation and (5) (un)informed decision-making.
Conclusions Concern was expressed that medical tourism might have unintended and undesired effects upon patients’ home healthcare systems. The individual choices of medical tourists could have significant public consequences if healthcare facilities in their home countries must expend resources treating postoperative complications. Participants also expressed concern that medical tourists returning home with infections, particularly antibiotic-resistant infections, could place others at risk of exposure to infections that are refractory to standard treatment regimens and thereby pose significant public health risks.