Posted 10 months ago on March 17, 2014, 3:17 p.m. EST by LeoYo
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The TPP Tries to Put a "No Exit" Sign on America's Crapified Health Care System by Allowing Medical Procedures to be Patented World-wide
Monday, 17 March 2014 09:42
By Lambert Strether, Naked Capitalism | Op-Ed
Hundreds of thousands of people — especially those who can’t afford concierge medical care — increasingly look to medical tourism to exit the tapeworm-infested brutal and hideously expensive U.S. health care rental extraction device system, with its Taylorist methods and penitentiary-like facilities, in favor of more humane and more reasonably priced alternatives available in other countries; heck, there’s even a medical tourism trade association!
Of course, “medical tourism” might be more accurately called “medical arbitrage.” For example, my privileged position as a citizen of the United States, once a first-world country in areas beyond the Acela corridor, still entitles me to various free gifts, including the high value of the US dollar, which I can arbitrage to purchase health care in not-first-world countries with lower value currencies and first-class — and not brutal — care. The Trans-Pacific Partnership (TPP) because it requires that medical procedures can be patented, will lessen this arbitrage opportunity in medical care by raising the price of medical procedures, thereby making you less able to get the kind of health care that you need and deserve, by raising its price. Here is the relevant draft text, from TPP’s Article QQ.E.2, with the U.S. proposal underlined:
[US: Consistent with paragraph 1] each Party [US proposes; AU/NZ/VN/BN/CL/PE/MY/SG/CA/MX oppose: shall make patents available for inventions for the following] [NZ/CL/PE/MY/AU/VN/BN/SG/CA/MX propose: may also exclude from patentability]: (a) plants and animals, [NZ/CL/PE/MY/AU/VN/BN/SG/CA/MX propose: other than microorganisms]; (b) [JP opposes: (b)diagnostic, therapeutic, and surgical methods for the treatment of humans or animals [US proposes; AU/SG/MY/NZ/CL/PE/VN/BN/CA/MX oppose: if they cover a method of using a machine, manufacture, or composition of matter]; [NZ/CL/PE/MY/AU/VN/BN/SG/CA/MX propose:] and
As you can see from the bracketed text, most other countries oppose the U.S. proposal. There are good reasons for doing so.
First, the U.S. proposal would raise the cost of medical care — that’s the part that eliminates arbitrage for U.S. citizens. Public Citizen:
Medical procedure patents create significant transaction costs for patients . Physicians or healthcare providers could be charged additional royalties on top of the one-time cost of a medical device each time they practice a patented method. … The patenting of medical processes essentially nullifies the effect of patent exhaustion in specific instances, giving patentees rights over downstream uses of a patented medical device. Physicians , healthcare providers, or other companies, who infringe medical procedure patents may then be liable to pay high damages that are “adequate to compensate for the infringement, ” but no less than a reasonable royalty rate.
Courts often set a reasonable royalty rate based on the “percentage of infringing sales resulting from the unauthorized use of the patented invention.” In Medtronic Sofamor Danek USA, Inc. v. Globus Medical, Inc., for example, the court found defendants liable for $2,085,269.20 in damages for infringing patents on “devices a nd methods used by spinal surgeons to stabilize bony structures.” Insurance companies typically cap the amount they will reimburse on any given procedure. Price hikes resulting from medical procedure patenting are likely to be shifted onto consumers, either in the form of higher co-payments or higher insurance premiums.
The additional costs that medical procedure patents impose may be no small deal for the patient. While patients are billed anywhere from $1500 to $2000 per stent used in coronary angioplasties, the actual cost of manufacturing the stent is only $15. A high-tech scan may cost a hospital “a few cents of electricity” and “a couple of hundred dollars [sic] worth of a technician’s or a doctor’s time,” but the patient is typically billed “several thousand dollars” per diagnostic procedure.
Second, most medical associations regard medical procedure patents as unethical — as indeed they are.
Under the TRIPS Agreement 1994 in the WTO, governments are allowed to refuse to grant patents that cover diagnostic, therapeutic and surgical methods for the treatment of humans or animals. This allowance under international trade law recognises that patents over medical treatment methods are an unjustifiable limitation on the freedom of physicians to treat their patients to the best of their abilities and are a risk to human health. If a patent exists over a surgical method, a physician has a choice (assuming they are even aware a patent exists over the surgical method): respect the patent and risk the health of their patient, or violate the patent and risk being sued for infringement. This is not a decision that physicians, particularly in emergency situations, should be required to make, and is an unjustifiable risk to health and undermines medical ethics.
It is no surprise then that the World Medical Association (WMA) has taken a strong position against patenting of surgical methods. In its position statement on the patenting of medical procedures, the WMA states that the patenting of medical procedures poses serious risks to the effective practice of medicine, and is unethical and contrary to the values of the medical profession.
(To be fair, if you’re a neo-liberal, putting the possibility of losing money in a lawsuit over the health of the patient — for example, you — isn’t a bug. It’s a feature, because markets.)
Third, most other nations regard medical procedure patents as unfit for public purpose, as indeed they are:
More than 80 countries, including most TPP negotiating parties, exclude medical procedures from patentability. Medical methods are expressly excluded from patentability in Brunei Darussalam (Section 16 of the new Patents Act (2011)), Chile (Article 37 ofChilean Law No. 19.039 on Industrial Property), Malaysia (Section 13 of the Malaysia Patents Act (291 of 1983)), Mexico (Article 19 (VII) of the Industrial Property Law), Peru, (Article 20 of Andean Community Decision 486 “Common Intellectual Property Regime” , as authorized by Article 16.9.2 of the US-Peru TPA), Singapore, (Section 16(2) of the Patents Act (No. 24 of 2001, as amended by Act No. 2 of 2007), as authorized by Article 16.7.1 of the US-Singapore FTA), and Vietnam (Vietnamese Law on Intellectual Property (50/2005)). In Canada, Section 2(d) of the Canadian Patent Act does not exclude medical procedures from patentability, but case law prohibits patents on surgical and therapeutic methods, while allowing patents on diagnostic methods. In New Zealand, while medical procedures are not statutorily excluded from patentability, case law has generally rejected such patents. Only Australia—even though it maintained the flexibility to do so in the AUSFTA (Article 17.9.2)—the Patents Act of 1990 doesn’t specifically exclude medical procedures from patentability, and case law suggests that they are in fact patentable. [See Public Citizen's website for more comparisons between domestic laws and proposed TPPA provisions.]
In the US, case law is swinging the pendulum even further away from broad medical procedure patents. Earlier this year, the Supreme Court reaffirmed the importance of limiting the adverse effects of diagnostic method patents, which remain among the most contentious of the medical procedure trio. In Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. — (2012), the Court invalidated Prometheus’s patent on a diagnostic method that involved administering thiopurines and observing chemical reactions in the body as a basis for dosing advice, stating that the patent improperly claimed a natural law.