Video Gamers Provide New Insights for the Design of Antiretroviral Drugs

Photo by Jonathan Sloan

I suppose with age comes humility and I may well owe my 17 year-old son an apology. So here it is Rich, about as publicly as I can muster: video games are not, apparently, an utter waste of time.

FierceBiotech IT  reports: “Video gamers uncover AIDS drug targets.” FierceBio writes:

Players of the online science game Foldit have pieced together the structure of an enzyme that could provide new targets for AIDS treatments, doing in three weeks what scientists failed to accomplish in more than 10 years.

The retroviral protease is a scissor-like enzyme that helps keep the AIDS virus going. Blocking the enzyme’s activity is a goal of drug researchers, but they first need to know the structure of the enzyme. Firas Khatib, a researcher at the University of Washington, where Foldit originated, gave players of the online game the challenge of cracking the structure of the protease that scientists had puzzled over for more than a decade. The players came up with multiple structures of the enzyme in an astonishing three weeks, giving Khatib and his colleagues enough information to revise the gamers’ work.

In addition, the gamers were able to expose “molecules on the surface of the enzyme that could be blocked with drugs to disable the function of it.”

Astonishing, really. If only they would continue to use their powers for good instead ….

The findings were published in Nature Structural & Molecular Biology and you can find the abstract here, Crystal structure of a monomeric retroviral protease solved by protein folding game players and the FierceBiotech IT article here

Video gamers uncover AIDS drug targets - FierceBiotechIT

The NIH’s Amended Conflict of Interest Regulations: A New, Weaker Approach to Intellectual Property Interests?

Yesterday, at long last, the National Institutes of Health released the final revisions to its regulations governing financial conflicts of interest on the part of applicants for federal research funds.  And there is good news.  The rule’s sunshine provisions have not, as was feared, been “gutted.”  Grant recipients will have to make their investigators’ financial conflicts of interest publicly accessible.  While an institution will not have to post the details of each conflict on its website, as was provided in the proposed regulations, if it does not it will instead have to provide the information in writing to anyone who asks for it.  Academics, advocates, federal and state prosecutors, other regulators, and members of the news media will have the access they need.  For sure, prospective patients or research participants will be less likely to come across information about investigator conflicts, but, as Kathleen Boozang explains here, it is far from clear that they would find such information helpful.

Of potentially more significance than the weakened sunshine provisions, the final regulations diverge from the proposed regulations with regard to the treatment of intellectual property.  Under the prior regulations, investigators were required to inform their institutions about relevant intellectual property rights, including copyrights, patents, and royalties in excess of $10,000.  The proposed regulations modified the definition to require disclosure of copyrights, patents, and royalties (and agreements to share in royalties) regardless of amount.  Under the final regulations, investigators do not need to tell their institutions about their intellectual property rights and interests unless and until they are in “receipt of income related to such rights and interests.”

The preamble to the final regulations is somewhat confusing.  For example, while the final regulations define significant financial interest to exclude intellectual property rights and interests that do not produce income, the agency states in the preamble that it “would expect institutional policies to require disclosure upon the filing of a patent application or the receipt of income related to the intellectual property interest, whichever is earlier.”  The preamble also contradicts itself with regard to the applicability of the rule’s $5,000 threshold, stating at one point that the threshold “applies to licensed intellectual property rights (e.g., patents, copyrights), royalties from such rights, and agreements to share in royalties related to licensed intellectual property rights,” while explaining (correctly, I think) at another point that “the $5,000 threshold would apply to equity interests and ‘payment for services,’ which would include salary but not royalties.”

The NIH’s explanation of its addition of the “receipt of income related to such rights and interests” qualifier to the definition of a significant intellectual property right or interest is especially confusing.  The agency writes that its intent was to exclude from the definition

“the rare cases when unlicensed intellectual property is held by the Investigator instead of flowing through the Institution,” because “it is difficult to determine the value of such interests.”  The agency’s point about valuation may be true, but that is an argument in favor of disclosure not against it.  With regard to equity interests, the final regulation requires investigators to disclose any equity interest in a non-publicly traded entity; the Food and Drug Administration similarly requires disclosure of equity interests “whose value cannot be readily determined through reference to public prices[.]“  The FDA also requires disclosure of any “[p]roprietary interest in the tested product,” without regard to value.

When an investigator has a proprietary interest in a product under study the potential exists for a serious conflict regardless of the interest’s current value or whether it is currently income-generating.  Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy and others have recommended a near-total ban on serving as an investigator in that case.  Such a ban cannot, of course, be implemented unless investigators are required to tell their institutions about their proprietary interests.

A Hollywood Ending for Pharma?

Photo by Sten Rüdrich

There is an interesting article at Xconomy San Diego on the growing tensions between venture capitalists, biotech startups, and pharmaceutical companies. Many entrepreneurs feel like they’re getting a raw deal from big pharma firms. One source alleges that dealmakers are about to kill the geese that lay the golden eggs.

In an earlier post, I worried that big pharma firms were becoming virtual to the point of ghostliness, mere nexuses of certifications, patent and trademark portfolios, tax dodges, and contractual obligations. If these trends continue, what types of controversies are likely to develop?

Gains from Gatekeeping

The just-in-time, ad hoc nature of movie production has led many economists to see in it a model for collaboration in other industries. As Marty Neumaier puts it, “By switching to a network model, the studios . . . avail themselves of the best talent for each project, thereby creating unique products and shedding unnecessary overhead.” But one-off, one-sided contracts can lead to epic conflicts. Consider, for instance, the recent rash of news about Hollywood accounting:

Michael Moore . . . claims $2.7m in unpaid royalties from Fahrenheit 9/11 [from his studio]. . . At the heart of the lawsuit is a dispute about Hollywood accounting practices that have for decades been a source of contention between the studios that release movies and “the talent” . . . Moore alleges the Weinsteins improperly deducted expenses from his share of the film’s profits – including the cost of a private jet to fly Weinstein from the US to Europe.

When an intermediary has access to extraordinary distribution networks, it has enormous leverage vis a vis “the talent.” Studios might respond that it’s a lot more fun to be Michael Moore than it is to be Harvey Weinstein: one gets to express his ideas, the other has to meet a payroll. But the enormous amounts of money generated by the film (between $228 and $500 million, according to Moore’s lawyer), and the frequency of complaints like Moore’s, lead to concerns about transparency and bargaining power in the industry.

Terry Fisher has written compellingly on the economics of Hollywood and pharmaceutical research (with Talha Syed). Intellectual property is key to both industries, and that’s one natural point of connection. Another is the economic role of middlemen, a topic that’s becoming increasingly important as certain dominant companies aim to own the “celestial jukebox,” “master switch,” or “Digital WalMart” of content connectivity.

Consider Apple’s demand for 30% of revenue from publications delivered via the iPad–and its refusal to share key customer data (for example, ads clicked on, time spent per page, etc.) with publishers. Seth Godin does not approve of this move:

The web has been a hotbed of siloed content, of deep dives for small audiences. The large scale stuff, though, has tended to be mostly about gossip and other quick reads that’s cheap to produce. Tablets offer a new chance to create content worth paying for.

[But] Apple has announced that they want to tax each subscription made via the iPad at 30%. Yes, it’s a tax, because what it does is dramatically decrease the incremental revenue from each subscriber.

These debates are very old in the tech world: when the VCR was introduced, Hollywood said its makers should pay for all the copyright infringement it enabled. Sony eventually retorted that the studios should be glad to see all the new customers that electronics would bring them.

Health Care’s Middlemen

Moore, the disgruntled biotech firms, and Godin each in their own way bring up issues that are going to be very big in health care over the next decade. Private insurers were supposed to be the magical mediators between providers and consumers in health care, demanding value and driving down prices. But, as Joseph White has shown, it was far easier for insurers to “stick it to” their customers than to constrain prices of “must-have” providers:

Remembering the pain of the late 1990s, [by 2001] managers of health care providers and insurance companies were determined to keep prices up through “pricing discipline.” “I’ve never seen discipline in the industry from a pricing standpoint like I’ve seen now” (HSChange 2004, p. 2), said one insurance industry consultant, providing part of the answer to why the underwriting cycle had yet to turn back toward lower margins. . . .

One might wonder why consolidation among insurers did not allow them to resist the providers’ demand for increased payments. The simple answer is that there were two concentrated parts of the market and one fragmented part. The insurers had to choose between fighting a full-pitched battle with the providers or exploiting their own market power vis-à-vis the employers. Raising premiums to employers was a lot easier. In theory, employers could have demanded restrictive networks (at lower prices). But since everyone had agreed that employees did not like restrictive networks, and providers (especially hospitals) were not willing to discount much to get into such networks, there were not many available for purchase. Individual employers could not invent such a product; they could only shop around and find the relatively best deal by customizing other contract terms, such as cost sharing.

Just as insurers began to align more with the interests of concentrated providers than with fragmented, disorganized consumers, so too do many Group Purchasing Organizations appear to be failing to fulfill their promise as cost-constraining intermediaries. As one analyst testified before the DOJ and FTC, “the compensation of most GPO management is almost always based on . . . fee income [from suppliers] rather than on the real savings to hospital members.” Again, the ostensible “protector” of one side of the health care equation ends up aiding one side of the deal.

Of course, the masters of all such deals work in finance. As Karen Ho suggested in her excellent ethnography, Liquidated, their values inform all the tough and opportunistic dealmaking mentioned above. As I taught health care finance over the past few years, I continually felt the topic stood in relation to finance proper as chemistry might stand in relation to physics: a discipline in its own right, but ultimately reducible to a more fundamental science. (I’m not saying I endorse this reductionism, just that it is an intuitively plausible model for what’s really driving developments in health care.)

Are there any policy lessons for health care? As Louis Uchitelle has suggested, we might want to question an economic system that delivers risk-free riches to those who invest or market future cures and little but anxiety (with limited or very unlikely upside) to many of those who create them. If we hesitate at awarding Apple a perpetual 30% bite of publisher profits merely for becoming the hippest platform, or question a finance sector that grabs 30% of all corporate profits, we might also want to articulate some decent maximum multiple of dealmakers’ over researchers’ compensation.

Reflecting on his book “The Great Stagnation” a few weeks ago, Tyler Cowen noted that many of the biggest winners in today’s economy are structuring “heads I win, tails you lose” deals. Wall Street has mastered the concentration and privatization of gain and socialization of loss. Will key players in pharma and the rest of the health care sector scramble to follow its lead?

Symposium on Access to Knowledge in the Age of Intellectual Property

There will be an online symposium on the new book Access to Knowledge in the Age of Intellectual Property at Concurring Opinions this Tuesday to Thursday (Feb. 1 to Feb. 3, 2011). This book, edited by Gaëlle Krikorian and Amy Kapczynski, is available for free download here, and can also be purchased here. Here is a quote from the introduction that gives a sense of the book’s themes:

In a hospital in South Korea, leukemia patients are expelled as untreatable because a multinational drug company refuses to lower the price of a life-saving drug. Thousands of miles away, a U.S. group called the Rational Response Squad is forced by the threat of a copyright lawsuit to take down a YouTube video criticizing the paranormalist Uri Geller. Could we—should we—see these two events, so seemingly remote from one another, as related? Yes—or such is the premise of a new political formation on the global stage, one that goes under the name of the “access to knowledge movement”—or more simply, A2K.

A2K is an emerging mobilization that includes software programmers who took to the streets to defeat software patents in Europe, AIDS activists who forced multinational pharmaceutical companies to permit copies of their medicines to be sold in South Africa, and college students who have created a new “free culture” movement to “defend the digital commons”—to select just a few. A2K can also be seen as an emerging set of theoretical commitments that both respond to and reject the key justifications for “intellectual property” law and that seek to develop an alternative account of the operation and importance of information and knowledge, creativity and innovation in the contemporary world.

Krikorian and Kapczynski have assembled a top-notch group of contributors, and we welcome comments from across the blogosphere.

Seton Hall Announces Summer Study Abroad International Health Law Program

Seton Hall University School of Law’s Leuven-Geneva Program in Health, Intellectual Property and International Law combines a broad-based introduction to the laws, policies and institutions of the European Union (EU) with a unique, interdisciplinary examination of cutting-edge issues in intellectual property, pharmaceutical development and global public health.

The Program will consist of two courses. European Union Law, a two-credit course, will be taught mainly at the Leuven Institute in  Leuven, Belgium and will include a special trip to Luxembourg to visit the European Court of Justice. Students will also visit some of the main EU institutions in Brussels, such as the European Parliament and Commission.

The goal of this part of the Program is to introduce students to the essential principles and institutions of the EU and to explore firsthand the challenges facing this unique confederation of different languages and cultures. For the Geneva component of the Program, students will study Health and Intellectual Property Law in a Global Environment, a four-credit course, co-taught by one intellectual property law professor and one health law professor.  The course will be conducted in collaboration with Geneva-based international organizations involved in health and intellectual property law issues, including the World Health Organization, UNAIDS, the World Trade Organization and the World Intellectual Property Organization.

Students will work on a series of case studies related to the work of these organizations, both in the classroom and in on-site meetings with organizational representatives. In addition to students from the Seton Hall Program, the Geneva component of the Program will also be open to students from the University of Zurich Ph.D. program in Biomedical Ethics and Law.

More information about the program is available here: http://law.shu.edu/Students/academics/studyabroad/Geneva/index.cfm

The Biosimilars Debate: Is it Over?

An interesting cell formation observed in this group of cells treated with progesterone and stained with filipin, which is a natually fluorescent antibiotic that binds solely to free cholesterol. Viewed via a phase contrast microscope.

Two months ago, I discussed possible federal legislation intended to balance the competing need for scientific and medical innovation with the costs to patients for biosimilars.  So where does the debate stand now?

Current proposals couple a regulatory approval pathway for biosimilars with exclusivity periods for pioneer biologics.  As part of its July 15, 2009 health reform bill, the Senate Health, Education, Labor, and Pensions (HELP) Committee adopted an amendment proposed by Senators Kay Hagan (D-NC), Michael Enzi (R-WY), and Orrin Hatch (R-UT) that provides for a 12-year exclusivity period for pioneer biologics.   On July 31, despite protestations from Rep. chairman Henry A. Waxman (D-Calif.) that the amendment is “exactly the wrong way” to create a pathway for approval of biologics, the House Energy and Commerce Committee approved H.R. 3200, which also includes a 12-year exclusivity period.

On September 29, ten governors wrote a letter in support of the exclusivity period to House Speaker Nancy Pelosi (D-Calif.), House Minority Leader John Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.), and Senate Minority Leader Mitch McConnell (R-Ky.), stating, “[i]nnovator companies must be provided with at least 12 years of non-patent data exclusivity to allow for recovery of their original investment and to ensure licensing payments to our research institutions.” Read more