Interdisciplinary Reflections on ‘Patents as Capital’ with Susi Geiger


This blog post is the second part in a PASSIM blog series where invited scholars reflect on patents as capital from an interdisciplinary perspective.

Susi Geiger is a Professor of Marketing & Market Studies at University College Dublin and the Principal Investigator on an ERC Consolidator project “MISFIRES” (2018-2023) project. MISFIRES asks how actors can engage with a market’s failures to challenge its organisation and make it more collaborative, more open to civic values and to social or political concerns. More broadly in her research Susi tries to figure out how complex markets are organized, with specific interests in technology and healthcare markets. She has published numerous articles in outlets including Organization Studies, Research Policy, Entrepreneurship Theory and Practice, Business & Society, and Journal of Cultural Economy.

Susi Geiger and MISFIRES are on Twitter: @complexmarkets @MISFIRES_ERC


1.why do you study patents?


Together with the ERC research group that I’m leading, I am researching ‘concerned markets’, that is markets where multiple actors’ interests, values and concerns clash (Geiger et al. 2014). In healthcare, such concerns include for instance those of patients and their advocacy groups, healthcare providers, civic society, governments, pharmaceutical firms, generics manufacturers, and health insurers, and could revolve around prices of medicines, access to innovative drugs, sustainability of supply and other issues. We are interested in how healthcare markets are organised, and how they could be organised better to take account of these various concerns. Patents are one of the strongest market shaping mechanisms and of central importance in healthcare as they will confer a legal monopoly onto innovative pharmaceutical companies for up to 20 years at a time (and sometimes longer, if we consider patent ‘toolbox’ strategies such as evergreening or the use of supplementary legal safeguards). This will have effects on pricing, on the negotiation strength these firms have vis-à-vis government buyers, on the entry of generic competitors, on innovation elsewhere in the system (through the use of patent ‘thickets’ and defensive patenting). Essentially, pretty much every aspect of the healthcare market is shaped through the patent system, therefore it is vital to understand how exactly it works – and again, if there are any alternatives to it that could make the market work ‘better’ (what ‘better’ is, and if it is indeed required, is of course in the eye of the beholder).


2. how do you understand patents as capital?


I consider patents in the context of the so-called financialisation of the pharmaceutical industry. According to financialization scholars, biopharmaceutical firms have, for some years now, focused more on a ‘rentiership’ than on an innovation business model. The latter would see vertically integrated pharmaceutical firms investing in a research and development pipeline that leads all the way from fundamental R&D efforts to post-market pharmacological surveillance in the interest of manufacturing innovative medicines to serve the world’s population. The former ‘financialized’ business model describes a strategic stance that can be characterized by six broad practices: First of these is the replacement of in-house R&D with the sourcing of external R&D through acquisitions or alliances with smaller biotech firms, which arguably lessens the risks large pharmaceutical firms need to take (Andersson et al. 2010). Second, pharmaceutical firms have been accused of a focus on what are often seen as modestly innovative but lucrative ‘blockbuster’ drugs that may yield revenues in excess of US$1bn per year, perhaps to the detriment of focusing on less lucrative but more pressing disease categories (Li 2014).  Third, they are increasingly adept at wielding a toolkit for strategic patent management, which for instance includes the so-called evergreening or incremental innovation of branded drugs to elongate their patent protection periods (Finch and Geiger 2011; Geiger and Finch 2016). Fourth is the exploitation of dominant market positions to extract arguably excessive rents in the form of high prices for medications from national and private healthcare payers (Roy and King 2016; Glabau 201; Gabaldon 2018). Fifth, and relatedly, reinvestment of these super-normal profits increasingly takes the form of share buybacks rather than future-driven R&D investments (Lazonick and Tulum 2011; Lazonick et al. 2017). Lastly, pharma has witnessed the emergence of pure ‘rentiers’ or ‘functionless investors’ ( van der Zwan 2014) in the form of so-called patent trolls or ‘Non-Practising Entities’ that buy and sell patents purely for financial gain (see also Kang 2015). In a nutshell, the financialization thesis portrays biopharmaceutical firms as viewing their drug portfolios as assets to be exploited through rent-seeking behaviors rather than instruments through which to ensure and enhance the public good. The patent, in this business model, turns from technological signifier to financial asset – or capital – to be bought and sold, banked and speculated upon, strategized and preempted.


3. how does your work relate to this understanding?


In our empirical work we observe how activists in the access to medicines space have turned their attention to patents in recent times. Of course, patents have always represented a bone of contention between access activists and innovator firms, particularly in the Global South where patent contestations by activists and governments have a history since the late 1990s AIDS crisis. However, it is only in recent years that activists in high income countries have focally taken on and contested patent decisions for instance by the European Patent Office. Assets can only be assets if and when they are specific, exclusive, and (typically) immutable.  The cases we have traced in our work reveal the gaps left open in the process of enclosure of ‘patents as capital’. These gaps can be grasped not only by rival companies wishing to gain a piece of the market pie, but they can also help other actors – for instance civil society or social scientists – analyse and/or contest the ‘asset condition’ (Muniesa et al. 2017 p. 34) of the biopharmaceutical enterprise. For instance, in one high-profile case of the Hepatits drug Sofosbuvir, since its launch and the associated public outrage its inflated price point caused, the mantle of patent contestant has been taken over from Gilead’s pharmaceutical rivals by civil society. In 2015 and 2017, the NGO Médicins du Monde led a group of activists into two patent oppositions that, interestingly, did not make appeal to the drug’s ethical and moral entanglements but that referred back to potential weaknesses in its patentability by referring chiefly to its lack of novelty –conjuring up its traces in extant HIV and Hepatitis C research much like the earlier patent disputes among private firms did . As an extension of the toolkit wielded by social movements around access to medicines, such patent contestations are becoming an important part of an increasing resistance against biopharmaceutical financialization.


4. what do you think are the benefits and drawbacks of studying patents from an interdisciplinary perspective?


Patents are complex entities (one would even say they are ontologically multiple). They have legal, technical, commercial and social lives, and they perform and are understood differently in each of these networks. In order to study patents-as-capital comprehensively, perspectives including those of law scholars, STS researchers, economic sociologists, institutionalists and technical specialists need to be integrated and connected. In short: to study something that is ontologically multiple requires epistemological multiplicity – though this requires building, to speak with Galison, ‘trading zones’ of interdisciplinary research between such different academic disciplines.


5. your questions to others in the workshop group (if there is anything you’d like others to comment or discuss)?


How can we go beyond the statement that ‘patents are capital’ to envisage and enact alternative and perhaps more ‘moral’ conceptions of technical ‘enclosures’? Commons, open science, sharing, license pooling, … ?

As technological signifiers and innovation signposts, patents are a one-size-fits all mechanism. While ‘breaking up’ the patent system – a system that has solidified over centuries into what it is today – is clearly not a realistic goal, what can scholar-activists contribute to nuance what has become a globally uniform and often very blunt instrument?


Would you like to comment on Susi Geiger’s reflections? Please do so below or on twitter. @passimproject

Posted in General, Guest blog series.

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