On Thursday, Feb. 20, the Jaharis Health Law Institute hosted Professor Christopher Buccafusco, Director of the Intellectual Property and Information Law Program and Associate Dean for Faculty Development at Cardozo School of Law, for his lecture, “Pharma Patents and Happiness: how patent law should make people better off,” , in line with his co-authored book, “Law and Happiness.”
He began by looking at the language of Patent Clause, Article I, Section 8, Clause 8:
[The Congress shall have power] “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”
(emphasis added by Professor Buccafusco)
Drawing on this provision, he noted that U.S. patent laws exist to promote people’s welfare through inventions and innovations that make people better off. He pointed out little attention has been paid to figure out what it means to promote people’s welfare via patent law, and how to measure them. He opined that, “law and happiness,” although two seemingly unrelated concepts, are indeed closely related. Taking a hedonic approach, he briefly introduced the main arguments in his book: how the law affects people’s life, and how it can do so in a better way.
Acknowledging the difficulties of measuring individuals’ wellbeing and its subjectivity, Prof. Buccafusco advocates a market-based approach to achieve these goals of U.S. patent law. This is particularly so given that the U.S. patent law has long been recognized on utilitarian or consequentialist grounds.
Under this theory, people’s welfare can be fairly understood as satisfying individual preferences. Professor Buccafusco took a smartphone as an example, to show how market dynamics affect the patent system to make people’s lives better off. He expounded that the market can be used as a mechanism through which patent law can make people’s lives better, by incentivizing innovations. For example, we, as consumers, are not only those who decide whether to buy the phone, but also those who further decide: which phone, when, where, and how much. By doing so, individual consumers satisfy their own preferences at their own expense, based on their own decision.
The problem in the pharmaceutical markets, however, he explained, is that market dynamics that affect supply and demand of patented products in a certain market, do not exist in the patent-based pharmaceutical markets. Moreover, considering the billing system of pharmaceuticals that generally rely on insurance companies, Medicaid or Medicare, addressing market-effects gets much more complicated.
Unlike the patent system, he also noted that, government-sponsored grants or prizes generally do not rely on markets, and thus necessarily may not be linked to individual preferences as a measure of welfare that can be, or should be produced through the sponsored-innovation.
Focusing on exclusive rights afforded under the U.S. patent laws, which permit patent owner to benefit through monopolized prices for a certain period, he elaborated on how to measure welfare based on Health-related quality of life (HRQoL) and quality-adjusted life-years (QALYs).
Combining a market-based approach and a welfare-measurement mechanism, Professor Buccafusco opined that the patent term should be afforded differently, at least for pharmaceuticals, based on welfare-maximizing effects that can be promoted, rather than simply relying on satisfying consumer preferences under existing supply-demand relationships.
The bottom line is, as he suggested, that different patent terms and rules should be adopted for different types of technology in order to encourage innovation by virtue of improving welfare. As technology develops and social norms change, maybe it’s time to reshape the patent regime, waiving to goodbye to rigid rules and uniformity.
[Ed: Prof. Buccafusco’s presentation was partly based on his recent paper, “Disability and Design,” (Buccafusco, Christopher J., Disability and Design (December 3, 2019). New York University Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3497902 or http://dx.doi.org/10.2139/ssrn.3497902).]