Do US Patent Incentives Need To Change To Get The ‘Cancer Moonshot’ Off The Ground?

In December, the United States Congress passed a bill with a monumental goal: engaging the private sector to work with each other, and with the government, to develop new treatments for cancer. The mechanics of cancer research, however, may require fundamental changes to our patent system if the initiative is to be successful. Intellectual Property Watch recently sat down with Jacob Sherkow, associate professor of law and affiliated faculty at the Innovation Center for Law and Technology at New York University Law School, to discuss challenges to overcome to get the Moonshot off the ground.

Cancer research isn’t just about finding a cure. The disease is vast, and the potential implications to each patient or across groups of patients are unique. For progress to be made, researchers need to gather and analyse large volumes of data, taken from patients, clinical trials, public and private studies. As the research is compiled and analysed by numerous private firms as well as public agencies, the information generated can become siloed, preventing potentially beneficial information from reaching other researchers who could use it.

To this end, the 21st Century Cures Act, and the Cancer Moonshot within it, aim to cut down the red tape between government agencies, and create an ambitious partnership between the government and multiple private corporations. While a public-private partnership is nothing new, the partnership created by the 21st Century Cures Act is unique as it seeks to encourage multiple private, and often competing, firms to share research and work together.

Sherkow authored an article in a forthcoming issue of the North Carolina Law Review, where he examines the intellectual property implications of the 21st Century Cures Act.

The existing system of incentivising private firms is through awarding patents on a technology or medicine which results from the research. Information itself does not meet the criteria of patentable subject matter in the US. To get the Moonshot off the ground, Sherkow explained that the incentive system will need to be reformed to encourage private firms’ collaboration and to stimulate the collection of the data necessary to eventually create real cures.

The Moonshot is a partnership with the public, and significant public funds are being invested in the project. It is not so simple, however, to argue that information generated under the Moonshot can be ordered to be shared. When private companies work together on this project, they won’t just be sharing their data but sharing how they collect that data. Much of this information falls under the category of trade secrets, which companies guard closely.

Sherkow explained, “Generally speaking, competing firms don’t cooperate with one another because there are not economic incentives to do so. They’re rivals, they act in a way that a commercial rivalry should suggest that they act. In fact, if competing firms cooperate too much, we stop calling that cooperation and we start calling that collusion, and that falls afoul of the antitrust laws.”

The Moonshot does not force these companies to work together, Sherkow explained, and he emphasised that to encourage them to do so, they need to be given enough private incentives that it is profitable for them to share their data.

“There’s different things that companies participating in this area probably want,” he said. “They want a broadening of some of the patent laws, they want some leeway with the Food and Drug Administration, they want the FDA to review their applications faster than they already do.”

Sherkow advocates for prohibiting information that could be shared from eligibility as trade secrets. As for how to prevent companies from hiding the information they generate, as no one will really know whether they are sharing everything they’ve found, he argued: “By eliminating the de jure protection over these secrets, which we call trade secrets, by essentially saying that, alright, if you have a secret and someone steals it from you, you can’t walk into court and defend it…. By preventing the ability of companies to say that, we’re significantly discouraging them from keeping this information to themselves.”

This would be coupled with a broadening of patentability criteria, said Sherkow. “Broadening up patentable subject matter has its disadvantages, to be sure, but in something like a public-private partnership, where the name of the game is creating information and then disclosing it to people, that’s definitely better than having the taxpayer pay for private trade secrets that vest in a for-profit company,” he said.

This is a US-based initiative, but cancer is global, as are pharmaceutical sales and intellectual property laws, to an extent. Information is useful, but the hope is that it leads to real cures and real medicines. If patentability criteria were broadened in the United States to facilitate better sharing of information, there is no guarantee that other countries would follow suit, or grant patents to foreign firms for information which does not meet the patentability criteria in their domestic law.

Citing the old adage “information wants to be free,” Sherkow explained that public information will rapidly find its way to the international sphere. “Whatever incentives we grant in the United States to create and disclose that information have to be large enough that companies are going to be willing to take the gamble that they’re not going to be able to patent the same stuff outside of the United States.”

That incentive would most likely be financial. The US population spends more for medicines than any other country, according to a recent analysis by researchers from Britain’s University of Liverpool, and the financial incentive to innovators primarily comes from these prices. In any initiative that uses public funding, there are concerns that the public ends up paying twice – first for research, and then for the expensive medicines developed from that research. Nothing in the Cancer Moonshot addresses the prices of medicines created as a result of this partnership.

In the current US incentive system, profits from the creation of actual, saleable medicines are how innovators are rewarded for their research and development efforts. Firms with access to a multitude of new information will be under pressure to patent inventions quickly. Sherkow explained that this is compounded by the United States Statutory Bars law, which requires that a patent be filed within one year of the innovation being made publicly known. Early patenting has been criticised as it leads to costly development efforts for medicines that may be ineffective, and creates a breeding ground for patent ‘trolls’. As a patent term is 20 years, the earlier the clock starts, the less time the drug maker may have for clinical trials, approval and sales.

“The problem, in my opinion, is when the patents start. They start in the nascent days of the development program,” said Sherkow, who explained that patenting starts before any indication of a drug’s safety or efficacy is known. “What’s the best way of solving this? Finding a way to push the patenting of … drugs like this off until the research program in humans really starts. The problem there is that there’s some … uncertainty as to whether or not conducting these types of experimental clinical trials bar you from going to the patent office and getting a patent later on.”

Further complicating matters, he said, “the statutory bars are part of … a number of treaties the United States has signed with other countries to align them with patenting elsewhere…. So it’s not like the United States can make wholesale changes to the statutory bars without thinking about its international obligations elsewhere.”

Even if the Moonshot gets off the ground, patience will be needed to see results. Cancer is complex, and there will be no quick discovery and development process for a cure. Former Vice President Joe Biden, who spearheaded the bill, recently described cancer as “the only bipartisan thing left in America.” When the bill was passed, it saw tremendous bipartisan approval in Congress, but cancer’s complexity means that continued financial and political support may be needed over a long term for the initiative to achieve results.

What are the next steps to getting the Moonshot off the ground? Sherkow said, “The Cancer Moonshot is a creature, these days, of Congress and the Executive Branch. So it is really up to them to determine exactly how seriously they want to take it.”

“The one thing I hope still straddles [the bipartisan divide] is curing cancer,” he said. “I hope that … this current Congress and administration figure out ways to seriously think about how to engage private industry to spend money to do the things that we want them to do.”

Sherkow explained that incentives like priority review vouchers, a system in which the FDA promises to review an application for drugs which treat certain diseases within 6 months, and extending data exclusivity periods and patent terms are things that Congress and the Executive Branch are capable of providing.

“Hopefully this can be some level of high priority for [the new administration],,” he said, “and if not, then frankly it’s probably never going to happen, and the Moonshot’s going to blow up on the launch pad.”

The Cancer Moonshot’s trajectory is unclear, but if the United States doesn’t move forward on this initiative, perhaps other nations with robust research and development programs can take up the effort, Sherkow argued.

“These are troubling times for United States scientific policy,” he said. “And to the extent that the Cancer Moonshot is not going to work here in the US for reasons that have to do with domestic policy and funding, it is my hope that someone, somewhere else, perhaps, let’s say the European Union, decides to take up this really important mantle of solving a technological problem through private incentives, for the benefit of the rest of humanity.”

Kim Treanor is an intern at Intellectual Property Watch and a student in the graduate program of International Affairs at the New School in New York, where she studies development, trade and public health.