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Medical Patents Broker Inc.
By Kenneth Pearce, President
The Two Approaches
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The majority view: It’s a necessity; we’ve always done it that way.
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The alternative stance: Why bother? Why not just keep our formula a secret, hit the market fast, and outrun the competition? We’ll model after the big companies that use trade secrets and out-scale the competition.
The alternative stance is the way to lose it all
Once a trade secret becomes public, it’s in the public domain and anyone can use it. If it’s an active ingredient, pharma, or biologics, it’s impossible to keep as a trade secret because the ingredients must be disclosed to the FDA and printed right on the label. And for medical devices, if the structure is visible to others when introduced into commerce, there can be no trade secret.
1. The Old Way is Still the Way
We know that the medical patent is the legal foundation for its corresponding medical invention. Without a legal monopoly for twenty years plus available Hatch-Waxman extensions, no company will risk billions to bring a medical invention to the patient.
According to industry data, the average cost to bring a new drug to market exceeds $2.6 billion, largely driven by grueling clinical trials and FDA compliance. Although much of this cost is due to FDA requirements, a reasonable person will not gamble billions without the possibility of a great ROI. For millennia, that has been Business 101, and it does not change.
The patent is your legal shield. It allows the entity taking the financial risk to be the one reaping the financial reward.
2. No Patent, No Capital. Period.
Unless it is completely “out of this world,” venture capital firms, institutional investors, mid-majors, and internationals do not invest in “good ideas.” They invest in protected monopolies that gain greater value the closer they come to the patient.
Like commercial real estate, a well-planned patent can be the deed to the city center rather than the suburbs 120 miles from downtown. The financial difference can be millions or billions.
The President’s Viewpoint
I have been involved in the marketplace for more than fifty years.
For most business people, the only way the medical patent becomes a “feel good” machine is when the returns exceed the cost of the endeavor. However, we the citizens of the United States sometimes use a losing investment for the betterment of all citizens.
