Fighting Big Pharma.

[LiviaOlivia]

FIGHTING PHARMA. The weekend was dotted with articles detailing Big Pharma's readiness to go to war with the Democrats over Medicare prescription drug bargaining, which is really a way of saying the weekend was dotted by articles fed by Pharma's PR firms into the eager and willing hands of newspaper reporters, who are all too pleased to pass on their doom-and-gloom predictions.

Pharma is arguing Medicare's user base is so massive that government negotiation amounts to de facto price controls, which would decrease innovation. So though Pharma accepts such "price controls" from the VA, Canada, France, Germany, Japan, and Medicaid -- all of who pay far less than Medicare -- innovation cannot sustain the addition of Medicare's patients.

We should hope not. 2/3rds of Pharmas current R&D budget goes not towards creating new drugs for killer conditions, but towards crafting copycats of other blockbuster drugs, which evade the patent protections placed by competitors. Another massive proportion of the actual research is conducted in the public sector and licensed out at minuscule prices through the Hatch-Waxman Act. Indeed, lower prices and innovation aren't either/or, they're both/and. Were I the Democrats, I'd decree that some proportion of the savings from negotiation go to the NIH to fund the lifesaving research that gets turned into lifesaving drugs, rather than going to subsidize the useless research that goes to create a knockoff version of Lipitor.

Pharma isn't fighting this battle because they're terrified of losing even one dollar that could go towards innovation. They already spend twice as much on advertising as they do on R&D. And most of the R&D doesn't "innovate" at all. They're waging this war because they want to make more money. That's their job. But it's the governments job to advocate for the public interest, and better pharmaceutical prices, particularly coupled with more investment into cutting edge, lifesaving drug research, is the public interest.

--Ezra Klein
November 27, 2006
http://www.prospect.org/weblog/2006/11/post_2138.html#014639

[gratuitous]

1. Watch the evening news some time

And simply marvel at all the products being advertised that you cannot run right out and buy. And these are mostly for prescription drugs. "Ask your doctor" is quickly becoming the first phrase mastered by toddlers.* Did you ever wonder where the money comes from for all that prime advertising space? Especially when you consider the dire financial straits Big Pharma is in. Why, they're such a poor bunch of little church mouses, that some of their middle managers are having to make do with last year's model yacht. Do you know what kind of tittering that causes at the marina? Won't someone please think of the poor drug company executives?

*Okay, I made that up, but would it really surprise you?

[LiviaOlivia]

4. Surprise no

Go over to Ezra'a post link and read the comments by big pharma trolls.

[MannyGoldstein]

2. Drugs Are Only 10% of Our Entire Healthcare Budget

I'm as disturbed by drug companies as the next guy, but drugs are only a small part of the cost issue. And, they are probably more cost effective than almost anything else in healthcare, other than perhaps proper handwashing.

[Cleita]

3. I hate these people.

If drug development and research were done at university medical centers and PHARMA only manufactured the drugs after buying a patent from a university that has been thoroughly researched and tested, I believe that drugs could be produced and sold for less. Negotiating prices is free market. Instead we have a gluttonous industry monopolizing products that are sometimes the difference between life and death to squeeze every drop of proft from every sale not from free market practices but corporate welfare being subsidized by our government.

[Warpy]

5. Uh, that's the way it IS done.

NIH grants to universities have funded the discovery and development of all the breakthrough drugs. They do preliminary testing on healthy volunteers, then sell the discovery to Big Pill for the major studies. The patent on the new med is licensed for a pittance, generally less than the cost of the original NIH grant. Big Pill's A, Inc, gets sole ownership for the formula for 17 years. Big Pill B, C, and D, Incs, then have to scramble for slight but patentable differences in the original formula so they can rush competing patented drugs out fast. That 17 year patent should be adequate to recoup the testing and minimal R&D of "me-too" drugs.

Now they're playing a new game, tying up generic drug producers in lawsuit after lawsuit after the patent period has expired, trying to stall cheaper drugs and driving THEIR price up as long as possible. THAT is the part I resent the most. They delayed generic Prilosec, for example, some three years while driving up its cost to nearly that of the name brand, then got it approved OTC so that the generic producer took a huge loss. Astra-Zeneca is jut plain EVIL, folks. I think this had a chilling effect on all generic drug producers, all so they could squeeze more profit out of an expired patent while developing a "me-too" drug of their own, Nexium.

The good news out of this whole mess is that some of the "me-too" drugs are improvements on the original formula. Lisinopril is a much better drug than Captopril because the dosages are lower and the most troublesome side effects aren't there, and that's not the only second generation drug class that hasn't been improved by the mad scramble for a "me-too" patent.

The bad news is that we can also get a Vioxx developed from the slightly safer Celebrex.

Clearly this industry is overdue for some regulation, anti trust enforcement, and real competition. Most people know they're getting overcharged for medications. They just don't know how bad it is.

[HiFructosePronSyrup]

6. Not the reason.

Universities haven't got the resources to do all the work the pharma companies do. Not that you couldn't nationalize the drug R&D industry, but that would be a whole other thing.

The problem is the insurance industry. In countries with nationalized healthcare, the government basically buys all of the drugs for its populace in bulk at wholesale. Nationalize healthcare and you've solved the problem.

[Cleita]

7. I've been a long time advocate of NHC even before it was

popular, so you get no argument from me there.