Wednesday, May 28, 2008

Business As Usual: Big Pharma Pays Off Generic Makers Not to Compete

From Reuters:

...Comes word that the FTC has noted 14 instances last year in which a brand-name drug firm has entered into a financial deal with a generic maker to delay the entry of a new generic equivalent drug into the market, effectively extending the brand-name drug's patent protection (and monopoly ability to keep charging high prices) by many months.

This "evergreening" strategy as discussed in HOOKED is a violation of FTC policies, according to the views of that agency; but pro-corporate judges in the Federal courts have periodically been willing to allow these deals, so apparently all the FTC can do now is report these and say "tsk, tsk."

Now, I am no judge and no economist, and I don't have an MBA degree. But it seems contrary to public policy when a big drug firm can pay off a generic firm not to sell a cheaper generic drug, and the consumer ends up having to pay the higher brand-name prices. Sounds somehow anti-competitive to me. But to the Federal courts it's simply business as usual.

Lest you think that making side deals with generic makers and paying them off not to compete with you, is the only way to "evergreen" a brand-name drug about to go off patent, I'm informed by the latest issue of The Medical Letter that Wyeth has received FDA approval for its new antidepressant, desvenlafaxine (Pristiq). Wyeth's antidepressant venlafaxine (Effexor) is now available generically for the immediate-release form, and the extended-release form is going off patent in 2010. What is the "new" drug? It's the active metabolite of the old drug--that is, the substance that your body naturally changes the old drug into as soon as you absorb it. In other words, the same drug, but it's chemically slightly modified so they get to patent it and sell it at brand name prices just as if it were a real breakthrough. The only good news is that the announced price so far for the "new" drug is not that much higher than for the generic "old" drug. This is just one in a line of "new" drugs that are produced merely by a small tweak in the molecule of an "old" drug, the transformation of the "old purple pill" Prilosec into the "new purple pill" Nexium being the best known case. I am always atruck by the coincidence that the company's scientists find a way to "improve" the old drug just about the time it's ready to go off patent. Somehow that improvement never occurs to them when the drug still has a lot of years of patent life yet to run.


Anonymous said...

A recent post on Gooznews on this issue.

Anonymous said...

Extending Life in a Different Way

When a patented med is about to lose its patent, any other company can reverse engineer this particular product rightfully so, and its originator no longer profits off of this med in a very short period of time- usually within the first year of patent loss. Since we are talking about what could be a great loss of pharma profits, such companies initiate such tactics as bogus patent infringement lawsuits- especially when evergreening and other patent extension methods, such as obtaining a pediatric indication fail, perhaps. The industry does not like their profit stream to be inactive.
What exactly is patent infringement? Basically, in this case, the branded pharma company accuses another generic company of plagiarizing thier invention, which with pharma are chemical patents, such as in the case of a branded med, and therefore a generic company having possession of their former branded med are accused of trespassing without permission of the accuser, which again is the branded med. If another med is made, used, or sold without authorization, a patent is infringed, although it is allowed when the patent expires in the pharmaceutical industry. Patent attorneys get involved and file these largely pointless lawsuits which clearly lack merit not because there is an actual issue if the patent is in fact expired of the branded med, which is the case typically. But because by filing such a lawsuit, this wrongfully created case has a mandatory wait period of 2 ½ years with this type of lawsuit to be decided, which means that much more profits of the makers of the branded med for that period of time, which could mean billions for such a pharma company and their branded med. An analogy may be keeping the stock market open a bit longer to benefit a few, perhaps, but it is clearly dishonest.
This is allowed in our legal system and why this occurs, this system flaw, remains a mystery. Patients are coerced to continue to pay high prices of branded drugs due to the generic delays caused by these lawsuits filed by the branded pharma companies, so harm is caused by this tactic to the patients who take these meds. Is it not prevented, such lawsuits, because the lawmakers possibly have been bought by big pharma through lobbying? Is it because of the present administration’s affinity with the pharma industry? One can only speculate.
At one point, pharmaceutical companies’ culture and mission had what were called ethical medical standards. Why? Because it was the right thing to do, since medicine as a practice may be considered both sacred and complex. At times, drugs were created without patents with intent, believe it or not. Jonas Salk and the Polio vaccine is an example of this. Perhaps that was the last time such a noble event happened. Profit motive was not the entire focus, as it appears today with drug companies.
No patent for Dr. Salk? Is that due to some mental illness of this creator? Absolutely not. The intent of Dr. Salk was to have greater availability of this vaccine for the benefit of public health. Dr. Salk believed that life was not a popularity contest. Today, such an act may be considered taboo or psychotic. I applaud his bravery and stance on his discovery, which, by the way, was funded by our government entirely.
Fast forward to today and such atrocious acts such as the lawsuit issue mentioned a moment ago. That once admired ethical industry somehow became possessed with a ‘greed is good’ mentality. Ethical Medical Standards are not visible and likely do not exist anymore, as far as I can observe. Deception, however, does. And the new pharma mentality is encouraged without regard to the optimal health for U.S. citizens. Yet what is stated by pharma (Billy Tauzin, et. al.) opposes what appears to be the case as illustrated by their actions such as what has been described. It’s my belief that U.S. citizens want a return of ethical medical standards, and they deserve this.
“Silence, indifference, and inaction were Hitler’s principal allies--- Lord Jacobovits

Dan Abshear