COMMENTARIES
Biomedical Patents and the Public’s Health
Is There a Role for Eminent Domain?
Aaron S. Kesselheim, MD, JD
Jerry Avorn, MD
A
S A GOVERNMENT-SANCTIONED MONOPOLY, A DRUG
patent allows its owner to prevent others from mak-
ing, using, or selling a given medication for a set
amount of time. Patents can help encourage and
reward scientific innovation in the pharmaceutical indus-
try. But some drug companies have been criticized for re-
stricting access to products in the face of actual or poten-
tial public health emergencies1 or distorting the patent system
in pursuit of higher revenues.2
One example has been pharmaceutical manufacturers’ ag-
gressive management of patent rights for AIDS drugs, mak-
ing them unaffordable in developing countries.3 Patents on
pharmaceutical products can also harm the public health
by limiting availability of drugs to treat, for example, tu-
berculosis4 and cancer,5 although controversy exists over
what factors provide the greatest barriers to access in some
settings.6 Recently, Roche came under pressure because its
oseltamivir phosphate (Tamiflu) may be useful in manag-
ing a potentially epidemic avian influenza virus. Roche ini-
tially endeavored to keep tight control of its ownership of
the Tamiflu patent rather than allowing licenses to other
manufacturers.7 In October, the company cut back on its
shipments to the United States, arguing that it wanted to
prevent hoarding.8
Controversy has also arisen concerning Pfizer’s torce-
trapib, which may prevent cardiovascular disease by in-
creasing high-density lipoprotein cholesterol levels. The com-
pany’s premarketing clinical trials will test torcetrapib only
in conjunction with its low-density lipoprotein–lowering
product atorvastatin (Lipitor), paving the way for Pfizer to
market torcetrapib as a fixed combination tablet with ator-
vastatin. In that situation, physicians could not prescribe
torcetrapib individually or with lower-cost generic stat-
ins.9 This strategy would effectively extend the market ex-
clusivity of atorvastatin; otherwise, its patent would expire
in about 5 years.
The issues surrounding AIDS drugs, oseltamivir, and torce-
trapib illustrate the thorny balance between protecting the
intellectual property rights of companies and the some-
times competing needs of patients. Patents are useful legal
434 JAMA, January 25, 2006—Vol 295, No. 4 (Reprinted)
constructs designed to reward innovation. But under cer-
tain circumstances, the way manufacturers manage their pat-
ents can also negatively impact public health and medical
care costs.
Health Care Patents and the Public Good
The United States has occasionally been faced with poten-
tial public health problems relating to restrictive manage-
ment of medication patents. During World War II, a fed-
eral appeals court strongly criticized the holder of patents
on a process to enrich foods with vitamin D for refusing to
allow that process to be used widely to fortify low-income
Americans’ limited wartime diets.10 In 2002, as the nation
struggled with the anthrax bioterrorism scare, Bayer ini-
tially declined to increase production of its ciprofloxacin
(Cipro), the only Food and Drug Administration–
approved antibiotic to treat this infection, to required lev-
els.11 In both cases, the patent holders ultimately made
their products more widely available under governmental
pressure.
Patents can also be used to inflate drug prices for con-
sumers. Abbott developed the human immunodeficiency vi-
rus protease inhibitor ritonavir (Norvir) in the 1990s with
considerable support from the National Institutes of Health
(NIH). Ritonavir was found to be more effective as an in-
hibitor of the cytochrome P450 system; soon, it was being
prescribed primarily in combination with other protease in-
hibitors to increase their potency. In 2003, Abbott in-
creased US retail prices for ritonavir by 400%12 to prevent
this use and to support sales of its own protease inhibitor
combination. The Bayh-Dole Act, which permitted private
corporations to own patents of discoveries made with fed-
eral grants, allows the government to assume control of such
patents if the product is not made available under “reason-
able terms.”13 But NIH Director Elias Zerhouni declined to
use this power, arguing that federal law did not give the NIH
the right to do so in the case of ritonavir.12 In fact, the gov-
ernment has never exercised its rights in this way.14
Author Affiliations: Division of Pharmacoepidemiology and Pharmacoeconom-
ics, Department of Medicine, Brigham and Women’s Hospital, Harvard Medical
School, Boston, Mass.
Corresponding Author: Aaron S. Kesselheim, MD, JD, Division of Pharmacoepi-
demiology and Pharmacoeconomics, 1620 Tremont St, Suite 3030, Boston, MA
02120 (akesselheim@partners.org).
©2006 American Medical Association. All rights reserved.

Companies can also inflate drug prices by manipulating
patents to prevent generic drugs from entering the market
even after expiration of their original patents.2 By patent-
ing peripheral aspects of drugs such as their coating or nor-
mal metabolites, a process known as “evergreening,” com-
panies can extend market exclusivity.15 The manufacturers
of loratidine (Claritin)16 and metformin (Glucophage)17 pe-
titioned Congress for extended market exclusivity, and in
the case of ranitidine (Zantac), a legal technicality gave the
manufacturer nearly 2 more years of patent protection.18 The
Federal Trade Commission has also cited occasions where
companies registered duplicative or otherwise inappropri-
ate patents to prevent lower-cost generic alternatives from
being marketed.19
Rising prescription drug costs have become a burden for
payers, individuals, and public insurance programs such as
Medicaid. Artificially elevated drug prices reduce adher-
ence to medication regimens, especially for low-income pa-
tients,20 and mounting drug costs have forced states to cut
back covered services, increase co-pay requirements from
indigent patients, or limit eligibility criteria.
Eminent Domain and Private Property
In the face of growing concern over excesses in pharma-
ceutical patent protection, another legal instrument exists
that can protect the public health: eminent domain. The con-
troversial Supreme Court decision of June 2005 in the case
of Kelo v New London confirmed the government’s broad au-
thority to assume control of private property in the name
of a higher good. The court ruled that a municipality could
take over individuals’ homes to facilitate construction of of-
fice space and more upscale residences because the pro-
posed development would be a “public good.”21 Viewed in
this light, eminent domain may be a tool to help address
situations in which manipulation of biomedical patents
threatens the public good even more directly.
Eminent domain was originally designed to facilitate pub-
lic works projects, such as building roads or schools. The
common law tradition, codified in the Fifth Amendment,
lets “private property be taken for public use” by the gov-
ernment, as long as “just compensation” is provided. Early
interpretations held that any uses must be purely public. But
by the mid-1900s, the Supreme Court began to apply a more
“broad and inclusive”22 definition allowing government to
seize land for the benefit of private corporations whose ac-
tivities could eventually improve the public good or the sub-
jective aesthetic quality of an area.
The Kelo v New London case affirmed this broader defi-
nition of eminent domain. The city argued that expropri-
ating homeowners’ property to allow a private company to
develop the site would provide jobs, generate tax revenue,
and “build momentum for the revitalization of down-
town.” Some affected homeowners sued the city, claiming
it had overstepped its eminent domain rights and arguing
that the government’s confiscation would primarily ben-
©2006 American Medical Association. All rights reserved.
COMMENTARIES
efit the companies developing the site. The Supreme Court
ruled 5-4 that the city had a right to take possession of the
homes because of the “traditionally broad understanding of
public purpose” in eminent domain law.21
The federal government’s eminent domain power has long
included patents among the categories of private property
that can be the subject of government takings, without seek-
ing a license or other permission; the right was codified in
1948.23 However, this authority has rarely been used in in-
tellectual property matters; only 8 of 2000 new eminent do-
main cases filed in 2003-2004 concerned aggrieved owners
of patents or copyrights.24 The government considered us-
ing its eminent domain rights during the 2001 anthrax scare
and briefly contemplated issuing compulsory licenses al-
lowing generic manufacturers to produce the needed amount
of ciprofloxacin.25 Ultimately, an agreement was reached to
purchase the necessary amount from Bayer, the patent holder.
In the wake of the anthrax incidents, debate resumed over
when the government should take over drug patent rights
and how much compensation would be due. Some argued
that overriding patents in such instances would be im-
moral26; others argued that the US government should avoid
doing so to maintain consistency with its opposition to drug
patent infringements in third world countries.27 Still oth-
ers contended that the government should authorize pro-
duction of needed medicines to protect patients and pre-
vent profiteering by pharmaceutical manufacturers.28 A bill
was introduced in Congress in 2001 to override drug pat-
ents during public health emergencies,29 but with resolu-
tion of the potential ciprofloxacin shortage and the passing
of the perceived anthrax threat, no legislation was enacted
and public debate largely dissipated. With ongoing con-
cerns about the effect of patent abuses on drug availability
and prices, along with new concerns about access to prod-
ucts to prevent or manage an avian influenza pandemic, the
question remains as to when the government should in-
voke its eminent domain rights over drug patents to pro-
tect patients and the health care system.
Principled Government Use of Eminent Domain
in the Health Care Market
Most instances in which the government has threatened to
invoke eminent domain have occurred in times of war, other
security crises, and public health emergencies. But even in
nonemergency situations, abuse of prescription drug pat-
ents can have substantial impact on the health of the Ameri-
can people and the stability of the health care system. If the
manufacturer of an agent active against avian influenza
(whether a neuraminidase inhibitor or a vaccine) refused
to allow licensing agreements with other manufacturers to
ensure adequate supply, or if excessive pricing of an inno-
vative drug for cancer or AIDS makes the treatment un-
available to poor patients, should this qualify as a threat to
the public health important enough to justify invoking emi-
nent domain to ensure access? If a company engages in patent
(Reprinted) JAMA, January 25, 2006—Vol 295, No. 4 435
COMMENTARIES
evergreening to add years to a drug’s market exclusivity and
prevent marketing of generic alternatives, should the gov-
ernment invoke its eminent domain authority to assist be-
leaguered public payers like Medicaid?
One way to approach these questions would be to de-
velop a standard to define when the risk of damage to the
public’s health is substantial enough to take such a step. An-
other would be to organize a standing committee within the
US Department of Health and Human Services to hear pe-
titions from state departments of health, patient groups, fed-
eral agencies, generic drug manufacturers, and other pay-
ers. This group could evaluate life-threatening shortages or
perceived manipulations of patent rights that might justify
use of eminent domain. In making its recommendation, the
committee would consider the magnitude of the effect on
the public health, the availability of alternative solutions,
and the potential for a decision to suppress future innova-
tions in the field. There is precedent for such a committee
in hearings that the NIH has organized on the few occa-
sions it has considered patent ownership issues in the past.30
Exercising such authority would require providing ap-
propriate compensation to the owners of the intellectual
property rights. In cases of patent evergreening, such pe-
ripheral patents are usually for the purpose of maintaining
market exclusivity, rather than to protect these “innova-
tions.” Compensation for invoking eminent domain in these
circumstances would therefore be modest. By contrast, for
AIDS drugs or a treatment or vaccine for avian influenza, if
the patent holder refused to allow licensing at a reasonable
price to ensure adequate and affordable supply, the re-
quired reimbursement to the corporations involved would
be substantially higher. Economists have tried to value this
proposition,31 which would entail estimating a reasonable
market price for the drug and considering the effective time
left on the patent.
Conclusion
For better or worse, most of current therapeutics is based
on private ownership of pharmaceutical discoveries, even
if the origin of those therapies is based on publicly funded
university-based research.32 Advocates of such ownership
argue that it is necessary for the public good of new drug
development. In some circumstances, however, this own-
ership may jeopardize another widely regarded public good,
namely the right of those who are ill to have access to life-
saving medicine or other health care services. A stark choice
arises if these two public goods are irreconcilable: “When
free enterprise and the freedom to live clash, which free-
dom will we limit?”32 While the role of eminent domain in
this context is a legal question, application of this author-
ity is an inherently political decision, as Kelo v New London
(and its contentious aftermath) make clear.
Faced with eminent domain assumption of their intel-
lectual property with market-value compensation, pharma-
ceutical manufacturers may choose to curb anticompeti-
436 JAMA, January 25, 2006—Vol 295, No. 4 (Reprinted)
tive practices, as happened with ciprofloxacin and may be
occurring with oseltamivir. Even if not applied, govern-
mental willingness to use such power could help move the
country toward a more fairly balanced intellectual prop-
erty policy by helping to prevent companies from exerting
their patent rights even to the detriment of the public’s health.
Now that the Supreme Court has reaffirmed that the state
can override homeowners’ property rights to transform a
neighborhood into office space “for the public good,” would
it not be equally justifiable on rare occasions for the gov-
ernment to use the same authority to limit the (intellec-
tual) property rights of biomedical corporations to protect
the public welfare? The latter application would seem closer
to the original public good intent of the constitutional emi-
nent domain provision. The Kelo v New London decision
could provide a relevant precedent with a touch of irony: a
major beneficiary of the “revitalization” of the affected area
of New London, and the owner of a large parcel of land ad-
jacent to the disputed site, is the world’s largest drug com-
pany, Pfizer.33
Financial Disclosures: None reported.
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©2006 American Medical Association. All rights reserved.

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US Health Policy in the Aftermath
of Hurricane Katrina
Sara Rosenbaum, JD
I
N A SEASON THAT EXPERIENCED AN ONSLAUGHT OF
major hurricanes, Hurricane Katrina nonetheless
stands apart as a seminal social event. Katrina did not
merely lay waste to a geographic region; it also
exposed every public policy failure essential to community
and population health. Nicholas Lemann wrote that, “after
the levees broke, we watched every single system associ-
ated with the life of a city fail: the electric grid, the water
system, the sewer system, the transportation system, the
telephone system, the police force, the fire department, the
hospitals, even the system for disposing of corpses.”1 The
US Department of Homeland Security reported that as of
September 15, 2005, 90 000 square miles had been
declared disaster areas, and over 122 000 persons were
housed in shelters throughout the nation.2 Three months
later, in December 2005, more than a million people are
still reported to be homeless.3
Hurricane Katrina exposed a health care system inca-
pable of withstanding the long-term impact of a major di-
saster. Through destruction and permanent displacement,
Katrina illuminated the fundamental weaknesses inherent
in the national approach to health care financing, as well as
the extent to which these weaknesses can threaten recov-
ery. Yet almost from the moment that health care emerged
as a major issue, a battle rapidly ensued over the appropri-
ate scope of the response.4 Now, several months after this
disaster, prospects are increasingly dim that this cata-
strophic event will yield at least modest improvements in
the national policy arsenal for effectively responding to di-
sasters, manmade or national.
Viewing National Health Care Policy
in the Context of Katrina
Katrina has received extensive attention over its impact on
health care; indeed, a mid-December 2005 Google search
©2006 American Medical Association. All rights reserved.
COMMENTARIES
Tommy Thompson. October 18, 2001. Available at: http://www.cptech.org/ip
/health/cl/cipro/nadethom10182001.html. Accessed August 29, 2005.
29. Public Health Emergency Medicines Act, HR 3235, 107th Cong (2001).
30. McGarey BM, Levey AC. Patents, products, and public health: an analysis of
the CellPro march-in petition. Berkeley Tech Law J. 1999;14:1095-1116.
31. Guell RC. Haggling for a patent: what a government would have to pay for
prescription drug patents. Health Econ. 1997;6:179-185.
32. Avorn J. Powerful Medicines: The Benefits, Risks, and Costs of Prescription
Drugs. New York, NY: Alfred A. Knopf; 2004.
33. Mann T. Pfizer’s fingerprints on Fort Trumbull plan. The Day [New London,
Conn]. October 16, 2005:A1.
joining the terms “Hurricane Katrina” and “health care”
turned up 12.2 million hits. Devastating news accounts re-
garding the terrible health conditions endured by survi-
vors, particularly the poor,5 have given way to more far-
reaching assessments regarding Katrina’s long-term
implications for health care in the Gulf Coast region. The
consequences for low-income populations have been par-
ticularly severe. In the affected states, an estimated 106 fed-
erally funded community health centers with 166 service
sites were destroyed, damaged, or overwhelmed by patient
surges, with surrounding states experiencing up to 100 000-
person patient surges.6 New Orleans’ Charity Hospital, a prin-
cipal source of health care and the only level I trauma cen-
ter for the entire Gulf Coast region,7 was left devastated and
dysfunctional, furloughing nearly 2600 employees as of No-
vember 7, 2005.8
To rebuild the region means rebuilding health care ser-
vices, since accessible and affordable health care is essen-
tial to basic population health and safety. However, the re-
building task faces particularly great challenges; even if capital
can be found, the population is so pervasively uninsured
that its ability to sustain reclaimed facilities is open to ques-
tion. For decades the Gulf Coast population has lived daily
with the consequences of the nation’s gap-ridden approach
to health care financing. The lack of coverage is unnerving:
in 2004, only 47% of Louisiana’s nonelderly residents and
48% of Mississippi residents had employer-sponsored ben-
efits, and the nonelderly uninsured population in each state
stood at 21% and 20%, respectively.9 Only in Alabama did
the proportion of the population with employer coverage
exceed the national average,9 but privately insured resi-
dents were concentrated in the state’s industrial regions, not
the towns that dot the coastline. All in all, the region’s de-
Author Affiliation: Department of Health Policy, George Washington University
School of Public Health and Health Services, Washington, DC.
Corresponding Author: Sara Rosenbaum, JD, Hirsch Health Law and Policy Pro-
gram, George Washington University School of Public Health, 2021 K St NW, #800,
Washington, DC 20006 (sarar@gwu.edu).
(Reprinted) JAMA, January 25, 2006—Vol 295, No. 4 437