UK general election could lead to paradigm shift in pharma patents

The United Kingdom is set to have a general election on 12 December. While intellectual property is unlikely to dominate campaign talks, the outcome of the vote could result in a paradigm shift in the county’s approach to drug-related exclusivities, with profound implications for innovators and generics alike.

Beginning a self-consciously revolutionary campaign, opposition leader Jeremy Corbyn has vowed to “transform” the country by tackling “the few who run a corrupt system”. This comes just a month after his party announced plans to circumvent IP rights with compulsory licences and to reorient UK patent law towards models followed in countries such as Argentina, Brazil and India.

Corbyn is not odds-on to lead the next government, although such is the current Brexit-inspired volatility of the UK electorate that it cannot be ruled out. However, his party’s stance on healthcare innovation is, at a minimum, an indication that controversies surrounding life sciences intellectual property and medicine costs are garnering attention in the United Kingdom.

The Labour Party’s Medicines for the Many: Public Health before Private Profit policy document declares that: “Our medical innovation system is broken and systemic change is needed.” It calls for the government and the public sector to play a bigger role in innovation to ensure that the relevant incentives promote public health rather than private profits.

The 50-page paper is highly critical of aspects of the existing patent system and the IP strategies of pharma and biotech innovators. It includes more than 100 references to patents, which it claims “provide excessive financial rewards to patent holders” and enable private companies to profit from treatments whose underlying inventions were often discovered by public research organisations. Patent evergreening is also taken to task for extending market monopolies and producing rights that do not cover beneficial advances.

All of this, the paper states, creates drug access problems, exacerbates inequalities and allows patent owners to hold “lives to ransom until they get their price”. The document emphasises the example of cystic fibrosis treatment Orkambi, which has not been available to UK patients because of a multi-year dispute between the National Institute for Health and Care Excellence – which negotiates drug prices on behalf of the National Health Service (NHS) – and patent owner Vertex Pharmaceuticals – which sought to charge £104,000-a-year per patient for the drug.

The impasse over Orkambi led to a public campaign for the government to consider issuing a compulsory licence (known as a ‘Crown use licence’) for Vertex’s patents; the NHS reached an agreement with Vertex in late October.

The Labour Party proposes a sweeping departure from previous policy, whereby existing Crown use licences would be adopted in cases of persistent disagreement between the NHS and rights holders. In the medium term, Section 57A of the Patents Acts would also be revised to clarify that patentees need not be compensated for lost profits in the event of a compulsory licence.

Further, ways to increase use of research exemptions would be explored immediately, while the United Kingdom would follow Argentina, Brazil and India in reviewing the stringency of patent criteria. This presumably refers to the restrictions that India applies to the patenting of new drug formulations, uses and properties of existing active ingredients under Section 3(d) of its Patents Act.

Regulatory exclusivities such as supplementary protection certificates and data and orphan drug exclusivity are also called into question. With Labour vowing to hold a second referendum on EU membership, the paper states: “Brexit might present an opportunity for the UK to move away from these EU rules (to do with non-patent exclusivities), while remaining in the EU could give the UK the chance to collaborate with other countries to place them under review.”

More broadly, Labour aims to de-link innovation incentives from the revenues provided by patents, instead introducing more grants, subsidies and prizes.

Taken together, these changes would significantly circumscribe the IP rights available to life sciences innovators and restrict patentees’ ability to monetise the rights that they do acquire.

But let us not get ahead of ourselves. Corbyn remains unlikely to win a majority in parliament and even a Labour-led coalition (with the Liberal Democrats or Scottish National Party) would likely see some of these policies watered down. Finally, as the policy document concedes, systemic change would not be straightforward in practice.

Nevertheless, Labour’s policies – affirmed by a shadow cabinet member after the Vertex agreement – mean that for the first time in years there is no consensus among the two largest parties on key tenets of IP policy going in to the election.

Medicines for the Many might also foreshadow a growth in political concern about patents and drug pricing in the United Kingdom, where the controversies seen in the United States have been largely absent hitherto.

While the United Kingdom pays less than most developed countries for its drugs, and most patients pay only a small fee for prescription medicines, the Orkambi debacle shows how a patented drug can become the focus of a scandal. As the policy document points out, the rise of expensive drugs for rare diseases is likely to provoke more disquiet in the future.