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How pharmaceuticals becamepatentable: the production andappropriation of drugs in the twentiethcenturyJean‐Paul Gaudillière a

a Centre de Recherche Médecine Sciences Santé et Société ,INSERM‐EHESS , Paris, FrancePublished online: 07 Mar 2008.

To cite this article: Jean‐Paul Gaudillière (2008) How pharmaceuticals became patentable:the production and appropriation of drugs in the twentieth century, History and Technology: AnInternational Journal, 24:2, 99-106, DOI: 10.1080/07341510701810906

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History and TechnologyVol. 24, No. 2, June 2008, 99–106

ISSN 0734-1512 print/ISSN 1477-2620 online© 2008 Taylor & FrancisDOI: 10.1080/07341510701810906http://www.informaworld.com

EDITORIAL

How pharmaceuticals became patentable: the production and appropriation of drugs in the twentieth century

Taylor and Francis LtdGHAT_A_281154.sgm10.1080/07341510701810906History and Technology0734-1512 (print)/1477-2620 (online)Original Article2008Taylor & Francis242000000January 2008Jean-PaulGaudillièregaudilli@vjf.cnrs.frIn 1944, the British Review of Economic Studies published a long article by Michael Polanyi thatadvocated a radical reform of the legal system organizing intellectual property in Britain. Polanyiexplained:

In our own times the harmful effects of patents have increased in some respects. They have becomethe means for consolidating trade monopolies, the restrictive function of which extend far beyond theexploitation of the patented invention … . The reform of the patent law at which I am aiming hereproposes to replace unsatisfactory phases of the wholly commercial process by which patents aretoday exploited by a system of appropriate government action.1

When writing this assay Polanyi was of course not promoting a state-based economy: heremained during his entire career a convinced partisan of a free-market economy.2

His idea of a general abolition of patents in favor of a governmental procedure for makingscientific and technical findings public while rewarding inventors was rooted in two arguments.The first one was a general understanding of science as based in an open circulation of ideas, tools,and results. Competition was – he explained – as essential to the pursuit of experimental researchas it was to the operation of the market. However, fruitful competition in science can only existif key resources remain accessible. The problem with patents is that they create legal barriersagainst the use of knowledge, and therefore hinder the progress of experiment. Anticipating hislater and famous book Personal Knowledge, Polanyi added that the experimental enterprise relieson many tacit elements, which – in contrast to what is generally assumed – do not travel easilyfrom one site to another. Knowledge is acquired through personal contact and experience, whichare easily hampered by practices of secrecy, control and monopoly.3 The second argumentconsisted in a more classical economic critique of the exclusive control of innovations granted byintellectual property rights. The monopoly patents create always results in high prices and artifi-cial profits even if intellectual property rights have a limited duration and provide access to theformal description of the protected invention.

Polanyi’s patent reform was never discussed within British elite political circles. In a contextof war mobilization, which put so many aspects of the relations between the State, the industryand the British society under critical examination, the article nonetheless resonated with otherchoices, for instance the Medical Research Council’s decision to deny Oxford University research-ers involved in the development of penicillin permission to patent their findings.4 Polanyi’s radicalplea is therefore a good reminder that norms of intellectual property as we know them are peculiarsocial and historical products, which owe nothing to law-like economical rules or to the inevita-bility of technical progress. Patents were invented in political, social and economical contexts thathad little in common with the late twentieth century industrial and capitalistic economies.5 Theirnature, scope and legal handling have not been stable even in one single country. More importantly,patents have been discussed, challenged and articulated with other – eventually alternative – waysof appropriating knowledge and inventions and/or turning them into common resources. Thehistory of patents is also the history of trademarks, secrets, technical monopolies, certificates of

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invention as well as the history of licensing contracts, patent pools, gifts, or the more recentlyinvented copy-left agreements. The role granted to formal intellectual property rights in themanagement of a peculiar class of inventions is therefore less a question of economic rationalitythan a social and political issue shaped by complex arrangements of actors, with their peculiar setof power, resources, interests, and ideologies.

Building on this same idea of knowledge as a domain of open circulation that was at the centerof Polanyi’s thinking, historians as well as observers of contemporary science have often opposedtwo different worlds: the academic arena on the one hand, with its practices of informal, recipro-cal, non-monetary exchange of materials and information; the world of production on the otherhand, where knowledge is applied to produce goods and economic value, where its control is anessential asset in the search for profitable production, where secret, technical monopoly, andproprietary invention is the rule.6 E.P Thomson’s famous contrast between the ‘moral economy’of the seventeenth century crowd opposing – sometime in a violent way – the liberal politicaleconomy of free prices for goods, which – like bread – peasants and craftsmen deemed essentialfor survival, has accordingly become a source of analogies for thinking about the values and prac-tices grounding the system of reciprocal gifts that dominates the world of open knowledge.7

The history of pharmacy seems to be a perfect illustration of this distinction. Although drugs,or at least some of them, became industrial goods sold on a peculiar market early in the nineteenthcentury, most pharmacists and physicians participating in the discovery and study of therapeuticagents have opposed their patenting if not their commercialization. Historians of medicine haveaccordingly recalled the stands taken by the British Medical Research Council, the AmericanPharmacological Association, the American Medical Association, or the French Académie deMédecine against patents and more generally against intimate collaborations between medicalresearchers and the drug industry on the grounds that such connections would result in conflict ofinterests, threaten the open circulation of knowledge, and hinder public access to therapies essen-tial to life.8

One difficulty with a strict divide between the moral and the political economies of knowl-edge is that it leaves largely out of focus the intimate relations that science and industry havemaintained since the second industrial revolution, as well as the deep transformation of produc-tion patterns and economic regulations, which affected these relations in the last century. That themoral economy of knowledge is not insulated from its political economy is a truism when consid-ering the case of pharmaceutical innovation. Drug making has been closely articulated with themanufacture of science since the early nineteenth century when it was reorganized on a profes-sional basis, giving academically trained pharmacists a monopoly on the preparation and sale ofremedies.9 The professional order of the apothecary however operated in such a way thatdistances were short between medical prescription and pharmaceutical preparation, between themaking and the consumption of therapeutic substances, between the invention of a new remedyand its sale.10 In the ideal image of the corporation, the pharmacist was a hybrid of craftsman,physician, botanist and chemist, an expert preparing prescribed mixtures following the recipes ofa national pharmacopoeia, knowledgeable about plants as well as diseases, controlling thedangers and uses of drugs, eventually advising his clients in place of the physician.

Within this world, drugs were not to be patented. In contrast to what is today considered to bea normal state of affairs, all European countries excluded therapeutic agents from the inventionsthat could be protected by means of intellectual property rights.11 This situation was not a productof chance or of a lack of interest in low-key inventions. It was the result of tense debates, theoutcome of decisions conducted at the highest political level and never really settled. If one takesthe case of France where the transition from corporation to professional order of pharmacy wasaccelerated by the Revolution, the patent law adopted in 1791 considered drugs as any otherindustrial innovation. This liberal choice was reversed in 1844 when the national assemblies

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amended the old law.12 Prominent scientists such as the chemist Gay-Lussac and the trade asso-ciations then stressed the importance of protecting the rights of inventors while the most eloquentadvocates of the exclusion were physicians and pharmacists. Their ‘moral economy’ opposedpatents on three different grounds. The first argument was a recall of physicians’ and pharma-cists’ virtue: their aim is not to seek profit but to benefit mankind. The second and more decisiveargument opposed patents and the health of the public. Opponents of the 1791 law thought thatthe existence of patents defining a legal monopoly of use would result in higher prices for drugs,thus restricting access to therapies. The third critique equated this defense of public health withthe expertise of the pharmacists and their exclusive control over preparations. Patents – theyargued – would establish a form of state approval for drugs of unproved utility since they wereneither included in the official pharmacopoeia nor approved by knowledgeable professionals.This legal stamp would stimulate the sales of potentially dangerous remedies. In addition, the vastmajority of pharmacists would never prepare such patented remedies, thus losing control andexpertise on what medicine could use. Accepting this logic, French political elites excluded drugsfrom the 1844 patent law. Analogous arguments were advanced in other European countries withsimilar outcomes. The USA remained the most important exception to this pattern.

For almost 100 years, physicians and pharmacists successfully opposed the idea that thera-peutic agents are industrial commodities like any other. However, as the number of industriallymade specialties grew, the pharmaceutical firms specializing in the relatively large-scale produc-tion of standardized and ready-made therapeutic preparations as well as the trade associations inthe chemical sector started to argue and lobby for changes in the patent law. In most countries,new patent bills were occasionally passed but none included a change of the drug provision untilWorld War II. Then, in a decade after World War II, a wave of legal measures established proce-dures for patenting drugs in one European country after another.

This special issue of History and Technology addresses the question of what made this tran-sition possible. Practitioners, i.e. lawyers, industrialists, academic scientists, have advancedanswers. They are usually normative, taking the pre-World War II situation as an anomaly.13 Theexclusion made pharmaceutical research rare and unnecessarily risky. It led drug manufacturersinto seeking alternative modes of appropriation such as trade secrets, which were prejudicial tothe pursuit of innovation. The historical spur behind this emphasis on the relation between drugdiscovery and patenting is the industrialization of pharmacy. By the middle of the twentiethcentury, the vast majority of therapeutic changes were no longer made in the apothecary. Localpharmacists had become retailers, supplying purified, homogeneous ‘specialties’ of compositionand quality certified by their industrial makers, with some form of approval by the state. Theindustrialization of drugs is usually traced back to the late nineteenth century when firms origi-nating either in the chemical sector such as the producers of dyes diversified their therapeuticagents, and started to operate on national markets. Viewed from the perspective of intellectualproperty, this industrialization had two major consequences.

The first one was to align the economy of pharmaceuticals on the practices of big capitalisticcorporations. As was the case in chemical or electrical manufacturing, pharmaceutical firmsadopted a divisional structure, created marketing departments, mobilized Taylorian forms ofwork organization. The second consequence is even more important as it relates to the changingstatus of science within the companies. Individual manufacturers ‘internalized’ chemistry,bacteriology, pharmacology, eventually physiology in ways that follow the classical transitionfrom ‘testing laboratory’ in charge of quality control toward ‘research facilities’ aiming at thedevelopment of new products observed in the electric or the chemical industries. As concentra-tion advanced, a few firms established large R&D programs managed with the same organiza-tional and managerial tools that had permitted the scale-up of production. Wanting to recoupsuch investments, the companies dominating the market for ‘innovative’ drugs like barbiturates,

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antipyretic, sulfonamides, hormones, or vitamins viewed patents as an indispensable guaranteeof income. They systematized their demands for a ‘normalization’ of the legal status of theirproducts.

This scenario captures important aspects of the changes that made pharmaceutical knowledgeakin to electrical or mechanical engineering. It has however a flavor of technological and indus-trial determinism, which accounts neither for alternatives to the patent system, nor for the speci-ficities of health-related markets. These specificities did not disappear with the emergence of bigpharmaceutical corporations. They were rather handled in a different way. The complex systemof negotiations about prices that linked manufacturers and health insurance authorities in the post-war era is a good example of such peculiarities. Another one is the increasing part prescribingphysicians played as gatekeepers and controllers of sales. During the inter-war period, doctorsbecame the main targets of marketing strategies mobilizing technical and medical informationcirculated by networks of ‘prep representatives’.14 The same holds for intellectual propertyrights. The tensions between ‘public health’ and ‘ownership’ did not disappear. Compromisesoperated at different levels. Even when drugs patents were accepted, the frequent inclusion – inthe patent laws – of clauses granting the state with rights to establish ‘compulsory license’ ornullify patents if their owners did not use them at all, or used them in ways posing a threat to thehealth of the nation, is evidence of this continuity.

Our aim here is not to propose an alternative master narrative. It is to investigate the transitionto drug patenting as a question of local practices, a question with scientific, industrial, legal andcommercial aspects. Rather than tracing the legislative changes of the postwar period, whichlegalized drug patents, the papers gathered in this issue analyze the displacements that altered themeaning of drug patents in settings such as university laboratories, marketing and legal depart-ments of pharmaceutical firms, professional and trade associations, or state patent offices.15

One hypothesis common to the set of papers assembled for this issue is that the postwarnormalization of drug patents was rendered less problematic because the nature and status ofdrugs had been transformed by patterns of scientific and legal action that emerged decades earlier.The industrialization of drug production certainly marginalized the work of the pharmacist.Its main effect was however to insert the quest for new therapeutic agents in a technical andeconomical world, which considered patents as the best form of appropriation. The scientificroute toward this insertion was the ‘molecularization’ of therapeutic agents, or more precisely thealignment between the manipulation of chemicals and the seemingly diverse ways in which drugswere investigated, standardized, and controlled. The legal route toward this insertion was thedevelopment of patents on preparation processes as distinct from the protection of therapeuticagents themselves. After World War I, the jurisprudence on drug patents was gradually displacedthrough a series of decisions that patent offices, legal counsels or company engineers made whenfiling, examining, and defending patent applications. The emergence of a ‘patent milieu’ operat-ing at the boundary between the laboratory, the factory, the state office and the courts facilitatedthe reinforcement of property rights. However, the process was uneven and contradictory. As aconsequence, the period between 1920 and 1960 was also a period marked with various compro-mises between professional and industrial interests, between ‘public health’ and property rights.

Following the work of the French Office National de la Propriété Intellectuelle during theinterwar period, Maurice Cassier thus describes the changing norms regarding the patenting ofbiological drugs. The French examiners reacted to applications from firms, which tried to circum-vent the impossibility of patenting drugs by focusing on preparation processes, but remainedhighly problematic since these applications seek to protect variable and poorly defined biologicalentities like vaccines, sera or hormones. The decisions of patent examiners created a new situation.The French patent officers gradually displaced the boundary of the patentable, for instance theygranted intellectual property rights on physiologically active extracts since they were purified and

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standardized by means of biological assays. Applications on pharmaceutical inventions, which didnot follow this pattern of technical domestication, for instance killed vaccines, were consideredtoo vaguely defined and approval was usually denied.

Discussing the same issue of patents on biological drugs from a German and industrialperspective, Jean-Paul Gaudillière analyzes the collaboration between the Berlin pharmaceuticalcompany Schering and the Kaiser-Wilhelm-Institute für Biochemie, which resulted in the patent-ing of many preparations of sex hormones during the 1920s and 1930s. This case illustrates howthe ‘molecularization’ of drugs became a legal operator, i.e. how the habit of patenting chemicalprocesses provided the ground for the creation of intellectual property rights on both chemical andbiological drugs. It also highlights the various dimensions of patent management before WorldWar II and its influence on the life in biological laboratories. The status of drugs was a matter ofjurisprudence and industrial practice rather than simply the writing of laws. Although the Frenchand German bans on drug patents were phrased in very similar terms, the massive use of processpatents by German firms contrasted with the lack of such practices in France. In the Germancontext, the intellectual property of drugs became so important in the construction of markets thatthe fear of mutual dependency became a strong incentive for the formation of cartels grounded inpatent pools such as the hormone cartel that linked Schering and its main European competitorsbefore World War II.

In contrast to the situation on the Old Continent, there is a long history of patenting drugs byprivate and public institutions in the USA, where the patent law did not include provisions exclud-ing drugs. The University of Minnesota’s taking of a patent on the activation of vitamin D by UVlight in the1920s nonetheless evoked such outcries against what was labeled as an attempt to‘patent the sun’ that the patent was eventually invalidated in court. Robert Bud considers thisreference case as illustrative of a moral order, which was shaken by the experience brought bypenicillin and wartime scientific mobilization. The importance of penicillin in a history of drugpatents is, in the first place, due to the fact that after the war the British scientific authoritiesshared the view that the Medical Research Council had made a big mistake in refusing to patentthe preparation of the antibiotic, thus giving the US laboratories and companies a free hand. Thisnational trauma legitimized a new public policy of appropriation in the form of a NationalResearch Development Corporation in charge of filing, maintaining, and valorizing patents onthe findings of universities and other institutions supported by the MRC. Inspired by the experi-ence of the US wartime management of penicillin patents under the auspice of the Office forScientific Research and Development, this peculiar form of pooling under state guardianship was– argues Bud – an effect of the new organization of drug research around large scale R&Dprojects, team work, and public–private partnerships.

That this model pervaded the postwar practices of pharmaceutical companies benefiting froman unprecedented expansion of health and medical services is evidenced in Judy Slinn’s surveyof the transformation of the British pharmaceutical sector. The 1948 revision of the 1919 patentlaw authorized drug patents, but maintained a system of compulsory license and ‘Crown UserRights’ applied for importing ‘generic’ versions of patented drugs for use in the hospitals of theNational Health Service. Various arrangements thus sought to balance the rising importance ofintellectual property rights. The growth of in-house R&D during the so-called therapeutic revo-lution was accordingly associated with the signing of numerous research and licensing agree-ments between firms. These contracts created multilayered patent pools that tried to reduce theimpact of the ‘anti-commons’ and foster technology transfers.

A second important theme running through these papers is that patents are not only an instru-ment in the construction of markets, ways of securing an economic monopoly, but also instrumentsin the circulation and the control of techno-scientific activities. An obvious – although rarelyinvestigated – aspect of industry-related research (whether it takes place in-house or not) is the

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critical reading of patent applications, which may be as time-consuming and important in decidingabout future investigations as the reading of articles. There is however more to say about the cogni-tive effects of intellectual property than simply remembering that it has a role in the disseminationof information. The life of patents does not stop after they have been filed and granted, theirowners must survey competitors, defend them against infringement, negotiate licenses. Theseactivities frame the actual uses of a given and protected body of knowledge. Sometimes they playan essential part in the control of a drug’s fate as decisions regarding who can make them are alsodecisions about how they should be elaborated, standardized, priced, and used in the clinic. Patentsas well as other forms of appropriation have to be understood as elements in a more global indus-trial regulation of pharmaceuticals, which emerged partly as an alternative, partly as a complementto the professional and the administrative ‘ways of regulating’.16

Following the case of insulin, Maurice Cassier and Christiane Sinding thus argue that theUniversity of Toronto used its patents as ‘ethical’ instruments for imposing on the manufacturersof the pancreatic hormone a system of non-exclusive license, moderate prices and – more impor-tantly – a centralized control of quality and production practices. In Canada, the production ofinsulin remained a quasi public service as it was implemented by a subsidy of the University. InGreat Britain, the management of the patents was transferred to the Medical Research Council,which licensed local manufacturers. This experience of regulation by patents was – in all proba-bility – as influential in the postwar change of the MRC’s patenting policy as was the penicillinaffair. Most tensions associated with the management of the insulin patents relate to the activitiesof Eli Lily, the main American partner of the Canadian insulin committee. The company’s attemptto establish its own and competing insulin patents however failed, paving the way for the estab-lishment of a general patent pool that remained under the control of the University of Toronto.

Last but not least, the generalization of drug patents affected the production of knowledge astheir existence contributed to shift laboratory research into specific directions. There is littledoubt that the possibility of patenting a certain type of processes or a given group of biologicalor chemical agents imbued these entities with both economic and technical value, thus creatingnew incentives for spending time and resources in their investigation. The historiography of phar-macy often alludes to the impetus the development of organic chemistry received in the latenineteenth century from the appropriation of dyestuffs. This may be true of other forms of knowl-edge involved in drug making. Jean-Paul Gaudillière in his assay on Schering and the property ofthe sex hormones suggests that, in the 1930s, the rising number of studies on metabolic pathwayswas fostered – at least in Germany where the links between academic biochemists and the indus-try were numerous – by the meaning these pathways gained as models of biological (intracellular)synthesis and artificial (industrial) production that could become targets of patent application.Whether such a feedback of intellectual property rights on the making of biological knowledgewas also the rule in less ‘molecularized’ specialties, such as bacteriology or physiology, remainsan open question.

One final remark about this century of (not) patenting drugs is that none of the questions,which once grounded the special status of therapeutic agents have disappeared with time. Theirvivid presence is powerfully illustrated by contemporary debates about the accessibility of drugsin a global pharmaceutical world or by the controversies about patents on genes and DNAsequences.17

Notes

1. Polanyi, ‘Patent Reform,’ 61–76.2. A. Jones, ‘Intellectual Property and the Nature of Science at the Onset of the Information Age,’ paper

presented at the International Congress for the History of Science, Beijing, July 2005.3. Polanyi, Personal Knowledge.

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4. Bud, Penicillin. Triumph and Tragedy.5. McLeod, Inventing the Industrial Revolution.6. Foray, L’économie de la connaissance; Etzkowitz and Webster, ‘Science as Intellectual Property’;

Pamela, ‘Invention, Authorship, Intellectual Property’; Willard, Patent Policy; Mowery and Sampat,‘University Patents’.

7. Thomson, Customs in Common; Daston, ‘The Moral Economy of Science’; Kohler, Lords of the Fly.8. Swann, Academic Scientists; Marks, The Progress of Experiment; Clark, The Life of Ernst Chain;

Rasmussen, ‘The Moral Economy’; Weisz, The Medical Mandarins.9. Simon, Chemistry, Pharmacy.

10. Gaudillière, La médecine et les sciences.11. Wimmer, Wir haben fast immer etwas Neues; Cassier, ‘Brevets pharmaceutiques’; Tanner, ‘The Swiss

Pharmaceutical Industry,’ 257–272.12. Cassier, ‘Brevets pharmaceutiques.’13. For an illustration, see de Haas, Brevets et medicaments.14. Greene, ‘Attention to Details’.15. The papers in this issue originate in a conference organized in Paris in the fall 2003 as part of the ‘Drug

Trajectory’ series of meeting organized in collaboration between Centre de recherches médecinesciences santé et société (CNRS-INSERM) in Paris, the Institut de recherches interdisciplinaires sur lessciences et les techniques (University Louis Pasteur, Strasbourg) in Strasbourg, the Institut für MedizinGeschichte (Charité) in Berlin, and the Max Planck Institut für Wissenschaftsgeschichte in Berlin.

16. Gaudillière, La médecine et les sciences.17. Heller and Eisenberg, ‘Can Patent Deter Innovation?’

References

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and Society, ed. J. Peterson, G. Markle, and S. Jasanoff. London: Sage, 1994.Foray, Dominique. L’économie de la connaissance. Paris, La Découverte, 2000.Gaudillière, Jean-Paul. La médecine et les sciences, 19ème–20ème siècles. Paris, La Découverte, 2006.Greene, Jeremy. ‘Attention to Details: Etiquettes and the Pharmaceutical Salesman in Postwar America.’

Social Studies of Science 34 (2004): 271–292.de Haas, M. Brevets et medicaments en droit français et en droit européen. Paris: Litec, 1981.Heller, Michael, and R. Eisenberg. ‘Can Patent Deter Innovation? The Anticommons Tragedy in Biomedical

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Cambridge: Cambridge University Press, 1988.Marks, Harry. The Progress of Experiment. Cambridge, Cambridge University Press, 1997.Mowery, David, and B.N. Sampat. ‘University Patents, Patent Policies, and Patent Policy Debates, 1925–

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Culture 32 (1991): 846–884.Polanyi, Michael. ‘Patent Reform.’ The Review of Economic Review 11 (1944): 61–76.———. Personal Knowledge. Chicago: The University of Chicago Press, 1962.Rasmussen, Nicolas. ‘The Moral Economy of the Drug Company–Medical Scientist Collaboration in Interwar

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in the Laboratory, 1907–1939.’ In Determinants in the Evolution of the European Chemical Industry,1900–1939. Dordrecht: Kluwer, 1998, pp. 257–272.

Thomson, Edward P. Customs in Common. London: Merlin Press, 1991.

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Willard, M., ed. Patent Policy: Government, Academic and Industry Concepts. Washington, DC: AmericanChemical Society, 1978.

Wimmer, W. Wir haben fast immer etwas Neues. Gesundheitwesen und Innovationen der Pharma-Industriein Deutschland. Berlin: Duncker & Humblot, 1994.

Jean-Paul GaudillièreCentre de Recherche Médecine Sciences Santé et Société

INSERM-EHESS, Paris, France

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