Techdirt. Stories filed under "pharmaceuticals"

'Intellectual Property' Mess Holding Up The TPP

Mike Masnick — Tue, 21 May 2013 00:10:00 PDT

As negotiators are seeking to finish up the Trans Pacific Partnership (TPP) agreement as soon as possible (they had originally promised a done deal by October), it appears that the controversial "intellectual property" chapter is causing the most problems, according to Sean Flynn, who is at the current negotiating round in Lima.

Officially, the Chief Negotiators have backed off the prior commitment to end the TPP negotiation by October, but are still clinging to a goal to end the negotiation by the “end of the year.” But privately, none of the negotiators or stakeholders at this round would express any confidence that the intellectual property issues could be resolved by then. The issues still under contention are massive.

The intellectual property chapter has grown to over 80 pages of text – including all the bracketed suggestions and alternatives. Some negotiators describe it as the longest text currently under negotiation.

Many of the issues are completely blocked. There has not been any new negotiation text offered on the most controversial pharmaceutical provisions since the Melbourne round over a year ago. There is currently no mandate from many countries to negotiate (they only “consult” and “discuss”) the pharmaceutical reimbursement chapter. Barbara Weisel described the pharmaceutical issues as being in a “period of reflection,” and had no comment on when that period might end.

Furthermore, it appears that some of the negotiators are realizing that it's a bad idea to lock in certain concepts, as would be set under the TPP, especially as various court rulings are changing the way copyright laws are viewed, and while a new copyright reform process is ongoing. People seem to be recognizing that agreeing to specific norms that may quickly be undermined by national laws would be a waste of time.

The recent spate of proposals for policy changes for US copyright law have caused a stir. The US is being asked how it can hold on to demands for parallel importation restrictions after the Kirtsaeng ruling, 70 year copyright terms after the Copyright Office proposed shifting them back to 50 years with formalities required for extensions, and strict restrictions on anti-circumvention liability exceptions when the Obama Administration and the Library of Congress have endorsed reforms that would violate the US proposal. Barbara Weisel stated that USTR is “doing what we can to work with Congress” to make sure that the TPP will not restrict policy options. But negotiators have said that there has been no visible movement on the USTR’s positions on Copyright issues, which will be negotiated this week.

And, of course, once again, the USTR appears to have no plans to be transparent in the slightest.

And there is no plan to release any text to the public. This is stark contrast to the last to plurilateral agreements including countries in the region. The Free Trade Area for the Americas and the Anti-Counterfeiting Trade Agreement both released full texts of the negotiating document with brackets indicating text under consideration before the finalization of the texts. For ACTA, there were four publicly released texts between April 2010 and May 2011. For the TPP – none yet, despite the Chief Negotiators’ pronouncement of end of year finalization plans.

Considering how much controversy there is over these items, it seems ridiculous that we still can't actually see what's being negotiated in our name -- especially when there's quite reasonable fears that it could mess with the democratic process of potentially rewriting copyright law.

Permalink | Comments | Email This Story

Doctors Call Out Novartis For Insane Pricing On Cancer Drug

Mike Masnick — Fri, 3 May 2013 17:37:00 PDT

Novartis has been in the news lately for the lawsuit filed against it by the US government for kickbacks it allegedly gave to doctors for prescribing certain drugs. As we noted about that case, it should be no surprise that this sort of activity happens, given that the incentive structure we've created with patents is so extreme. Here's one example of at least some principled doctors striking back against Novatis. Over 120 cancer researchers and doctors have published a paper calling out Novartis specifically for its pricing on the cancer drug Gleevec (marketed as Glivec outside the US). The doctors point out that it can cost over $100,000 per year for Gleevec currently. And, Novartis has been continually jacking up the price. There had been concern when the drug was first introduced a decade ago, that it was priced way too high at $30,000, leading the company's then CEO, Daniel Vasella, to acknowledge the complaints, but to argue that it was "a fair price." Well, now the company is pricing the drug at more than three times what it thought was a fair price, and it should be no surprise that people think this is outrageous profiteering by abusing a government granted monopoly to charge way more than any fair market price would allow.

The paper these doctors published points out that such high prices undoubtedly causes harm to patients who need the drug. The lead author of the paper told CNN that this whole situation is unsustainable, and something needs to be done to bring prices down to a more reasonable, market-based level. He just focused on Gleevec because it's his area of research:

"These price increases do not reflect the cost of development of drugs or the benefit they provide to the patient," he told CNNMoney. "They are simply related to the drug companies' wish to increase profits beyond a reasonable range."

Of course, one key way to help drive down prices is to do the obvious: stop granting government-given monopolies on the production of such drugs. That, alone, is the reason why the prices are so crazy in most cases. Thankfully at least some countries have recognized how ridiculous this is. India recently blocked Novartis from trying to patent a slightly different version of Gleevec, which means that the company will finally face some real pricing pressure from generics in that country. One would hope that other countries would do the same, and recognize that competition isn't a bad thing. It might just save lives.

Permalink | Comments | Email This Story

Our Patent System Incentivizes Drug Companies To Pay Doctors Kickbacks

Mike Masnick — Thu, 2 May 2013 20:19:00 PDT

You may have seen the news recently that the US government has kicked off a lawsuit against Novartis, the pharmaceutical giant, for paying kickbacks to doctors to get them to prescribe certain drugs.

Authorities said the Basel-based company for a decade lavished healthy speaking fees and "opulent" meals, including a nearly $10,000 dinner for three at the Japanese restaurant, Nobu, to induce doctors to prescribe its drugs.

They said this led to the Medicare and Medicaid programs paying millions of dollars in reimbursements based on kickback-tainted claims for medication such as hypertension drugs Lotrel and Valturna and the diabetes drug Starlix.

The charges are detailed in a whistleblower lawsuit first filed against Novartis Pharmaceuticals Corp by a former sales representative in January 2011 and which the U.S. government has now joined.

Of course, this is hardly a surprise to anyone who has followed the medical profession at all over the past few decades. The stories of "favors" and benefits for doctors from mis-named pharmaceutical "sales reps" (often very young, just out of school, incredibly attractive, but with little knowledge of the actual field), whose jobs often seemed more akin to cruise director and entertainer rather than knowledgeable, helpful sales person, are everywhere. That it's finally taken this long for the government to think that maybe, just maybe, this might distort the nature of our healthcare system, and lead to wasteful prescriptions, including prescriptions that cost significant taxpayer money is somewhat incredible.

What's worse, as economist Dean Baker points out, is that anyone at all is surprised that this happens. After all, when our own government policy is to hand those drugmakers incredibly powerful monopolies on life-saving pharmaceuticals, we've actually created the incentives ourselves for such activity to take place:

When the government grants drug companies patent monopolies that allow them to sell drugs at hundreds or even thousands of times the free market price it gives them an enormous incentive to do things like pay off doctors to prescribe drugs. Everyone who has ever taken an intro economics class understands that fact.

Unfortunately our leading economists do not seem aware of how protectionism in the prescription drug industry leads to corruption that can both raise costs and jeopardize the public's health.

Perhaps that's why it took the US government so long to even attempt to crack down on such activities. It created the environment in which such activities thrive and are encouraged.

If we want to stop such practices, perhaps, rather than just suing the pharmaceutical companies, we start to look at the ridiculous incentive structure we've set up, whereby drug companies take on very little of the actual risk (most drugs today are actually first created by universities using publicly funded money), but are given incredibly powerful monopolies, such that the prices are considered unbelievable.

True competition in the market would -- as always -- lead to both more actual innovation, lower prices, less corruption and (most importantly) better health and public safety.

Permalink | Comments | Email This Story

Indian Supreme Court Rejects Trivial 'Evergreening' Of Pharma Patents

Glyn Moody — Mon, 1 Apr 2013 15:13:00 PDT

Back in October last year, in the context of India showing itself increasingly sceptical about pharma patents that drive up drug prices beyond the reach of its citizens, we wrote about an important court battle over Novartis's drug Gleevec, sold as Glivec in India. The definitive judgement from India's Supreme Court was announced today, reported here by The Guardian:

The Indian supreme court has refused to allow one of the world's leading pharmaceutical companies to patent a new version of a cancer drug, a decision campaigners hailed as a major step forward in enabling poor people to access medicines in the developing world.

Novartis lost a six-year legal battle after the court ruled that small changes and improvements to the drug Glivec did not amount to innovation deserving of a patent. The ruling opens the way for generic companies in India to manufacture and sell cheap copies of the drug in the developing world and has implications for HIV and other modern drugs too.

The key issue at stake is a practice known as "evergreening": making small changes to a drug, often about to come off patent, in order to gain a new patent that extends its manufacturer's control over it. It's a way of cheating on the implicit bargain of patents: that a government-backed monopoly is granted in exchange for the invention entering the public domain at the end of the patent's lifetime.

That's what makes today's decision so important. It's not just about allowing Indian generics manufacturers to offer Glivec for a fraction of the Novartis price; it's equally about establishing the principle that "evergreening" patents won't be as easy in India as it is elsewhere, where the practice is common. This will allow India's pharma companies to produce a wide range of drugs at low prices that can then be sold to emerging countries unable to afford Western prices.

Doubtless, many lives will be saved as a result, but that doesn't seem to be any comfort to the head of Novartis in India, who is quoted in a press release as saying:

"We strongly believe that original innovation should be recognized in patents to encourage investment in medical innovation especially for unmet medical needs," said Ranjit Shahani, Vice Chairman and Managing Director, Novartis India Limited. "We brought this case because we strongly believe patents safeguard innovation and encourage medical progress, particularly for unmet medical needs. This ruling is a setback for patients that will hinder medical progress for diseases without effective treatment options."

That's pretty much what you'd expect him to say, since we've heard it here on Techdirt so many times before: without patents that allow monopoly pricing and big profits, there will be no investment in new drugs, and everyone will suffer etc. etc. But this simply isn't true. Much of the fundamental research that leads to important new drugs is done in public laboratories, paid for by taxpayers around the world, not by pharma companies.

Here, for example, is the story of how Novartis came to gain its highly-lucrative monopoly on Gleevec/Glivec, as told by the key researcher who actually developed it: Brian Druker, chair of Leukemia Research and professor of medicine at the Oregon Health and Science University Cancer Institute. He explained how the crucial initial research was carried out in an opinion piece published on the Livemint site in 2007:

The basic research that led to the identification of enzyme inhibitors for CML [Chronic Myeloid Leukaemia -- the main condition that Glivec is designed to treat] dates back to 1960 with the identification of the Philadelphia chromosome in patients with CML by researchers at the University of Pennsylvania, Peter Nowell and David Hungerford. In 1973, Janet Rowley at the University of Chicago determined that the abnormal chromosome was due to a translocation of genetic material.

No pharmaceutical companies seem to have been involved in this early work, and they were also minor players in the crucial move out of the laboratory, into product development, as Druker explains: In 1993, I moved to Oregon Health Sciences University in Portland and had a single goal of finding a company that had the best inhibitor for Bcr-Abl [the cancer-causing protein] and to bring it into clinical trials. My work in Oregon on a therapy for CML was primarily funded by public sources, particularly the National Cancer Institute. My persistence with scientists at Ciba-Geigy (now Novartis) helped to keep the development of imatinib on their agenda despite uncertainty from product managers.
So not only was the drug developed largely thanks to public funds, but the pharma company that ended up making all the profits from it wasn't even hugely enthusiastic about the project initially: it was only Druker's "persistence" that led to the drug being approved. And if you're wondering about his views on the current world of pharma, with its stratospheric prices and a habitual recourse to evergreening to extend patents way beyond their original life-span, here's what he wrote back in 2007: Pharmaceutical companies that have invested in the development of medicines should achieve a return on their investments. But this does not mean the abuse of these exclusive rights by excessive prices and seeking patents over minor changes to extend monopoly prices. This goes against the spirit of the patent system and is not justified given the vital investments made by the public sector over decades that make the discovery of these medicines possible.
The fact that many key drugs have only been possible thanks to those "vital investments made by the public sector" is nearly always overlooked by defenders of the pharma patent system. It's another reason why the Indian Supreme Court's decision is not only right, but just.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Permalink | Comments | Email This Story

Giant Pharma Company Claims Releasing Data On Drug Safety Is Illegal As It's Confidential And 'Commercially Sensitive'

Glyn Moody — Mon, 18 Mar 2013 08:51:16 PDT

One of the initiatives gaining momentum around the world is open data -- the idea that, for example, non-personal data affecting the public should be made freely available. That's partly to improve transparency, so that citizens are more informed about what is happening, and partly to stimulate new kinds of business that build products and services based on that data.

An important category of open data that boosts transparency concerns basic drug safety information. Last month, Techdirt wrote about the AllTrials initiative that seeks to have key information about clinical trials placed in the public domain. As part of a wider move towards greater openness, the European Medicines Agency, the main body that licenses drugs in Europe, is starting to make available information that has hitherto been withheld.

Although doctors and patients are rejoicing at this greater transparency, not everyone is pleased by the move. AbbVie, the pharma company spun out of the Abbott Laboratories at the beginning of this year, for example, is taking legal action to stop it:

AbbVie, a pharmaceutical company has sought an injunction to block Europe's medicines regulator from releasing "confidential" and "commercially-sensitive" information on its blockbuster rheumatoid arthritis drug, a spokeswoman for the U.S. drugmaker confirmed on Sunday.

The Chicago-based company had taken legal action against the European Medicines Agency to stop it from releasing data on the effects in individual patients in clinical trials for its drug Humira, the Financial Times reported earlier on Sunday.

Except, of course, this isn't "confidential" and "commercially-sensitive" information: it's just basic data about its safety and efficacy. Doctors and patients surely have a right to know this before using products that could potentially have serious, even fatal, side-effects.

Another EU body, the European Food Safety Authority (EFSA), is also opening up:

The project is part of EFSA's continuing commitment to openness and addresses recommendations made by an independent evaluation report of the Authority's performance to further enhance transparency in its decision-making processes. EFSA's Science Strategy also highlights the importance of the Authority playing a leading role in making relevant scientific data more accessible to all interested parties.

Here's one particular set of data that it has now released: Given the level of public interest, EFSA will make all data on genetically modified (GM) maize NK603 publicly available on its website today (14 January).
Once more, that seems reasonable, since the public ought to be able to find about what is going into the food chain whose end-products it will consume. But some disagree: according to a story on Bakeryandsnacks.com, Monsanto is threatening to sue the EFSA over the release of this data.

What makes this a little confusing is that the company is quoted in that article as saying that it "firmly supports transparency" -- and yet here it is fighting tooth and nail against precisely that. Apparently, Monsanto also wants the regulatory environment in Europe to be "science-based". Modern science requires experimental data to be made available so that anyone can check the validity of the conclusions that have been drawn from it. If it can't be scrutinized, the conclusions can't be confirmed, and it's not science. So, given its call for "science-based" regulation, why does the company want to keep that data hidden? A cynic might almost suspect that Monsanto and AbbVie have something to hide.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Permalink | Comments | Email This Story

Court Says Pfizer May Be Liable For Side Effects Of Drug, Even Though Man Took Non-Pfizer Generic Version

Mike Masnick — Wed, 6 Feb 2013 23:57:57 PST

An interesting case in the Alabama Supreme Court has ruled that a man who developed a movement disorder (tardive dyskinesia) after taking a generic version of the drug Reglan can sue Pfizer, the maker of Reglan, even though it did not make the actual generic he had taken (he took generics from both Actavis and Teva, both of whom he's sued as well). This one is a tricky one on the question of secondary liability, thanks to the oddities of the pharmaceutical world. While, naturally, it sounds absurd that Pfizer can be sued for a drug it didn't make, the regulatory world makes it slightly more complicated -- in part because current law says that generic drug companies could not be sued over failures in labeling of risks, because they're basically copying the labels from the brand name manufacturer. Other courts have ruled that the brand name manufacturers can't be sued -- so in theory that could leave the takers of generics with no legal recourse if there were failures to accurately label the drugs they took. Given that, it seems slightly more reasonable to think the brand manufacturer may be more responsible for what's on the label -- but since they can't monitor quality control of the generic, the whole thing seems like quite the legal muddle all around.

Permalink | Comments | Email This Story

First Big Pharma Company Announces Support For Clinical Data Transparency Campaign: Who's Next?

Glyn Moody — Wed, 6 Feb 2013 00:11:46 PST

It would be something of understatement to say that the spiralling cost of healthcare has become a highly-charged political issue in the US (and elsewhere). But wherever people stand on the funding of medicine, there is an implicit assumption that it works, and is worth even the exorbitant prices that pharmaceutical companies may charge. Sadly, that's often not true.

The reason is that drug approval is frequently based on partial or even misleading evidence from the crucially-important clinical trials that are conducted to check that a new treatment is safe and efficacious. Similarly, prescribing doctors often only have access to incomplete information when they are choosing drugs for a patient. Not knowing all the facts about medicines not only leads to a huge waste of money, since ineffectual or inappropriate drugs are sometimes prescribed, but can have life-threatening side effects. Here, for example, is a recent case involving the pharma giant GlaxoSmithKline (GSK) and its diabetes drug Avandia:

The licence for Avandia was revoked in Europe, in September 2010, because of evidence that it could cause heart failure and heart attacks. The drug can still be prescribed in the US, but not to patients at risk of heart problems.

A scientist with the Food and Drug Administration estimated that Avandia could have been responsible for 100,000 heart attacks in the US.

The manufacturer, GlaxoSmithKline, has admitted concealing data about the damaging side-effects of the drug, and there is evidence of the drug's harmful effects.

Here's why that critical data isn't always to hand: companies and researchers can withhold the results of clinical trials even when asked for them. The best available evidence shows that about half of all clinical trials have never been published, and trials with negative results about a treatment are much more likely to be brushed under the carpet.

This is a serious problem for evidence based medicine because we need all the evidence about a treatment to understand its risks and benefits. If you tossed a coin 50 times, but only shared the outcome when it came up heads and you didn’t tell people how many times you had tossed it, you could make it look as if your coin always came up heads. This is very similar to the absurd situation that we permit in medicine, a situation that distorts the evidence and exposes patients to unnecessary risk that the wrong treatment may be prescribed.
That comes from a site called AllTrials (disclosure: I am on the advisory board of the Open Knowledge Foundation, which is one of the supporters of AllTrials). It has a very simple, but very ambitious aim: The AllTrials initiative is campaigning for the publication of the results (that is, full clinical study reports) from all clinical trials -- past, present and future -- on all treatments currently being used.
If doctors have the full facts about all the drugs they can prescribe, they are in a better position to choose wisely. That will almost certainly save both money and lives. Despite that undeniable fact, pharmaceutical companies continue to withhold data from clinical trials, defying a US law that requires them to provide it: Since 2008 in the US the FDA has required results of all trials to be posted within a year of completion of the trial. However an audit published in 2012 has shown that 80% of trials failed to comply with this law. Despite this fact, no fines have ever been issued for non-compliance.
Of course, it's not hard to see why drug companies don't want all that data out there: it would mean that independent analyses could be conducted, with the danger that they might come to very different conclusions about the efficacy and safety profile of the medicine in question. Against that background of the pharma industry's dogged refusal to cooperate in the opening up of clinical data, this announcement, from the same GSK discussed above, was unexpected: GSK today further demonstrated its commitment to clinical trial transparency by announcing its support for the AllTrials campaign. The campaign is calling for registration of clinical trials and the disclosure of clinical trial results and clinical study reports (CSRs) to help drive further scientific understanding.
Specifically: GSK is committing to make CSRs publicly available through its clinical trials register. CSRs are formal study reports that provide more details on the design, methods and results of clinical trials and form the basis of submissions to the US Food and Drug Administration (FDA), European Medicines Agency (EMA) and other regulatory agencies. From now, GSK will publish CSRs for all of its medicines once they have been approved or discontinued from development and the results have been published. This is to allow for the data to be first reviewed by regulators and the scientific community. Patient data in the CSRs and their appendices will be removed to ensure patient confidentiality is maintained.

In addition, while there are practical challenges, the company also intends to publish CSRs for clinical outcomes trials for all approved medicines dating back to the formation of GSK. This will require retrieval and examination of each historic CSR to remove confidential patient information. Given the significant volume of studies involved, the company will put in place a dedicated team to conduct this work which it expects to complete over a number of years. Posting will take place in a step-wise manner, with priority given to CSRs for its most commonly prescribed medicines.
If GSK follows through on those promises, and really does provide all that data in a timely fashion, this is potentially huge. As Ben Goldacre, author of the book "Bad Pharma" about the betrayal of doctors and their patients by drug companies through the withholding of vital information, and a prime mover of the AllTrials campaign, explains: The eccentric position is now not supporting alltrials.net. There is no serious defense for withholding information about clinical trials from doctors and patients. It is simply unethical, and it harms patients.
GSK's move is a breakthrough for the campaign because it negates arguments that it's simply not possible to provide detailed clinical trial information as a matter of course. This means that the pressure will be on the other pharmaceutical companies to follow suit -- or to give the impression they have something to hide about their products.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Permalink | Comments | Email This Story

Pharma Companies Try 'DRM' For Drugs As A Ploy To Stymie Generics

Glyn Moody — Wed, 16 Jan 2013 13:19:09 PST

One of the striking features of the drug world is how pharma companies become noticeably more inventive immediately before their patents are due to run out and their drugs are about to enter the public domain. That's because they need to find a way to differentiate themselves from the generic manufacturers that are then able to offer the same medicines for often vastly lower prices.

Usually this takes the form of modifying the formula of a drug slightly, patenting it, and then seeking to convince the medical profession that the new formulation is better in some way. But sometimes it involves more novel approaches, as here:

In coming months, generic drug producers are expected to introduce cheaper versions of OxyContin and Opana, two long-acting narcotic painkillers, or opioids, that are widely abused.

But in hopes of delaying the move to generics, the makers of the brand name drugs, Purdue Pharma and Endo Pharmaceuticals, have introduced versions that are more resistant to crushing or melting, techniques abusers use to release the pills' narcotic payloads.

As the New York Times article quoted above reports, having introduced these "tamper-resistant" designs, the pharma companies are now pushing to get a ban on generic versions that lack this feature. If you think of "tamper-resistant" techniques as a kind of DRM for drugs, the pharma companies are effectively asking for their own version of the DMCA, which forbids the circumvention of DRM.

The drug companies have dressed this up as a service to society, but some aren't buying it:

While companies like Purdue Pharma insist the public's health is their main concern, others note that producers introduced tamper-resistant versions of their products just as the drugs were about to lose patent protection. In court papers filed in response to Endo’s lawsuit, the F.D.A. described the company's action as a "thinly veiled attempt to maintain its market share and block generic competition."

There's no doubt that the abuse of painkillers is a significant problem, but according to another recent story, in The Washington Post, alarming levels of addiction to OxyContin and similar painkillers may be partly the drug companies' fault. For instead of warning doctors about this issue, the latter were assured that there were "minimal risks of addiction and dependence" if they prescribed these kinds of drugs for their patients: according to a Washington Post examination of key scientific papers, a court document and FDA records, many of those claims [about minimal risks] were developed in studies supported by Purdue Pharma, the maker of OxyContin, or other drug manufacturers. In addition, the conclusions they reached were sometimes unsupported by the data, and when the FDA was struggling to come up with an opioid policy, it turned to a panel populated by doctors who had financial relationships with Purdue and other drugmakers.
So it would seem that rather than mandating the use of tamper-resistant packaging for these kinds of painkillers, a better long-term solution would be to avoid the use of these drugs altogether, where possible.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Permalink | Comments | Email This Story

After India, Now Indonesia Introduces Patent Licenses For Generic Versions Of Drugs

Glyn Moody — Thu, 18 Oct 2012 03:17:48 PDT

As we noted a couple of weeks ago, when we wrote about India's moves to issue compulsory licences for the production of generic versions of expensive, patented drugs, the big fear for Western pharmaceutical companies was that other countries might follow suit. It looks like that's happening in Indonesia, where the country's president has signed a decree authorizing low-cost versions of key HIV drugs:

the measure would introduce widespread generic competition and generate major cost savings in the world’s fourth most populous country. The decree licenses patents for a slate of HIV medicines, and represents one of the most robust uses of pharmaceutical patent licensing power by a country since the World Trade Organization 1995 Agreement on Trade-Related Aspects of Intellectual Property (WTO's TRIPS).

Again, the concern for the major drug manufacturers must be that this latest move will encourage even more countries to start granting patent licenses for drugs needed by their populations, but which are currently unaffordable thanks to Western-level pricing. Indeed, it's hard to see what can stop that happening now that India and Indonesia have shown the way by invoking the right of countries to issue compulsory patent licenses, as enshrined in TRIPS.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Permalink | Comments | Email This Story

Emerging Countries Take Note: Big Pharma's Losing Patent Battles In India

Glyn Moody — Fri, 5 Oct 2012 03:24:32 PDT

Techdirt has been following the important story of the kidney and liver cancer drug marketed under the name Nexavar since March, when India granted a compulsory license for the first time since re-instating patents on pharmaceuticals. Naturally, the patent holder, Bayer, fought back, and appealed against that decision. Now we learn from Intellectual Property Watch that Bayer has lost:

Last Friday (14 September), the Chennai-based Intellectual Property Appellate Board (IPAB) which is responsible for hearing appeals on patent applications, rejected a petition by German pharma major Bayer AG, seeking a stay on an order of India’s Controller of Patents granting a compulsory licence (CL) to Indian generic drug maker Natco Pharma Limited, for a drug used to treat liver and kidney cancer.

It's quite possible that Bayer will try to appeal to a higher court, but what's noteworthy is that this is just one of several other important pharma cases in India at the moment. For example, the Delhi High Court held that Roche’s patent on the cancer drug Tarceva was valid, but that an Indian generics manufacturer had not infringed on it because it had only been selling a variant of the drug. Another high-profile case concerns the blood cancer drug Gleevec, sold as Glivec in India, whose manufacturer, Novartis, is fighting India's refusal to grant it a patent. Here's the background: The legal dispute in the Glivec case centres around a provision of India’s 2005 patent law, called Section 3(d), which states that "the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant." The dispute brings to the fore a fundamental question: what is an "invention"? Or more precisely, how much innovation is required to obtain a patent in India?
Novartis insists that it is not fighting in order to get more money, but to vindicate its "honor". What this probably means is that it is trying to establish the principle that patents can be given for new forms of drugs, even if they provide no enhancement over earlier versions. If it loses the Gleevec/Glivec case, that could have serious repercussions for future patent applications by the company in India.

More generally, this current round of high-profile drug patent cases may well have major knock-on effects in other regions of the world. Western pharma companies are probably worried that their recent failures in India to gain certain patents or block local manufacturers of generics could be repeated elsewhere as emerging countries wake up to the flexibilities within the TRIPS agreement that India is currently exploiting. The Intellectual Property Watch article mentions three nations that are already considering this -- Botswana, South Africa and Swaziland.

An article in the leading medical journal The Lancet agrees that India's growing success might well encourage others:

In trying to limit compulsory licences and avoid efficacy tests on products, the Bayer and Novartis cases are seeking to undermine public health considerations aimed at improving access and therapeutic advantage. The TRIPS Agreement does not limit the grounds on which compulsory licences can be granted, and does not prevent patent applicants from having to demonstrate enhanced efficacy for their allegedly new and useful inventions. There are many problems facing access to and rational use of medicines in India but the provisions within the country's patent laws, if more extensively and properly applied, should help rather than hinder such access. India's laws and experiences could provide a useful example for low-income and middle-income countries worldwide.

Watch this space.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Permalink | Comments | Email This Story

After India And Brazil, Now China Takes Steps To Allow Cheap Versions Of Patented Drugs

Glyn Moody — Mon, 11 Jun 2012 20:29:00 PDT

In recent months, Techdirt has reported on an important development in the world of medicine, as both India and Brazil have allowed local companies to produce cheap generic versions of drugs covered by patents. In an even bigger blow to Western pharmaceutical companies, it looks like China is following suit:

China has overhauled parts of its intellectual property laws to allow its drug makers to make cheap copies of medicines still under patent protection in an initiative likely to unnerve foreign pharmaceutical companies.

Even worse for those companies, the proposed legislation would allow Chinese generics to be sold in other countries: For "reasons of public health", eligible drug makers can also ask to export these medicines to other countries, including members of the World Trade Organisation.
Both ACTA and TPP have clauses that would probably make that more difficult -- another reason why China is unlikely to sign up for either.

As the Reuters article quoted above explains, China has prepared this move carefully, consulting with other countries that have taken this route in order to prevent it being challenged in international forums like the WTO. It is yet another example of China moving up the production chain:

China's stable of generic drug makers has been producing the key ingredients -- or active pharmaceutical ingredients (APIs) -- in medicines for years, exporting them to foreign drug makers, which then sell the patented finished products back to China at prices which the average Chinese citizen often cannot afford.

Pharmaceutical companies in the West will doubtless fight this directly in the courts and indirectly through lobbying of their respective governments, but it's hard to see China backing down, since that would have negative consequences for the health of its citizens and entail an unacceptable loss of face.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Permalink | Comments | Email This Story

Putting Lives Before Patents: India Says Pricey Patented Cancer Drug Can Be Copied

Mike Masnick — Mon, 12 Mar 2012 13:48:00 PDT

India has an interesting relationship with pharmaceutical patents. In 1970, India did away with drug patents entirely, believing it would help create a domestic drug industry. And it worked. As we discussed in the past:

2,237 licensed drug manufacturers in 1969-1970 grew to 16,000 by 1991-1993, production of drugs grew at an average rate of 14.4% per year from 1980 to 1993, India became a net exporter of pharmaceutical products, and the market share of foreign multinational corporations (MNCs) dropped from 80-90% to 40% (Fink 2005). In 1995, six of the top ten pharmaceutical firms in India were domestic, and employment in the sector had reached half a million people

Now, remember how people say that without intellectual property, industries protected by those monopolies collapse? Yeah, the opposite happened in India. And yes, many were producing generic versions, but not all of them were. Either way, despite all of this success, the international community, pressured by the big pharmaceutical firms, cracked down on such practices, and demanded that if anyone wanted to join the WTO -- an important organization for large countries to be a part of -- they had to recognize pharmaceutical patents as per the TRIPS agreement. India finally did so in 2005.

However, one key point in TRIPS that developing countries such as India and Brazil have paid close attention to is the fact that they can force a compulsory license on a drug patent holder in the interest of public health.

For the first time since re-instating patents on pharmaceuticals, India has granted just such a compulsory license, covering a kidney and liver cancer drug marketed under the name Nexavar. Indian generic drug company Natco requested a license, noting that Nexavar was in short supply in India and exceptionally expensive. A typical dosage costs around $70,000 per year in India -- something Bayer says is necessary to recoup the drug's R&D costs. However, reports show that it cost less than $300 million to develop this drug (not to mention that the US government subsidized the process) and Bayer has already made billions selling the drug around the world. In a detailed ruling (pdf and embedded below), India's Controller of Patents (nice title) granted Natco the right to make the same drug, requiring it to sell it at a significantly lower price than Bayer sells Nexavar for, and then pay back to Bayer a 6% royalty rate (which is actually at the high end of what the UN recommends). Natco has to make the drug itself and can't name it Nexavar, make it look the same or even state that it's the same as Nexavar -- but it can make its own version of the drug and sell it, and the license lasts the life of the patent. Bayer can and almost certainly will appeal, but this is going to be interesting to watch for a few reasons.

The real question here is how the US will react to this. The Obama administration has been trying to exempt drugs that treat non-communicable diseases (such as cancer medication!) from such compulsory license rights. In the meantime, the big (non-Indian) drug companies have been working hard to lock up the Indian drug market with patents. Not surprisingly, the Obama administration and the big drug companies have a cozy relationship when it comes to dealing with patents in India.

It's likely that you'll start to hear some rumblings from the US government about how this kind of ruling is a "problem" and how India isn't "respecting" international patent law. Expect to see diplomatic pressure placed on India to put limits on its compulsory licensing program, and potentially even noises about how India has to change its patent laws to "update" them and "harmonize" them with the world. Also don't be surprised if stuff like this leads India to jump up the charts on next year's Special 301 reports from the USTR, which list "naughty" countries. It's probably too late to make it into this year's list for this particular move. Is it really any wonder that India is so worried about ACTA? It knows that ACTA is entirely about ratcheting up enforcement, without any exceptions for things like this where something as important as saving lives comes into play.

Permalink | Comments | Email This Story

DailyDirt: Tiny Drug Factories

Joyce Hung — Tue, 28 Feb 2012 17:00:00 PST

Brand name pharmaceutical drugs are ridiculously expensive, but how much does it really cost to manufacture a drug? A potentially low-cost method is to use microorganisms -- which are plentiful -- to synthesize chemical compounds. For example, synthetic insulin is now made using genetically modified bacteria. Here are a few other examples.

Are you depressed? You can use open-source DNA code from the Registry of Standard Biological Parts to genetically engineer yogurt bacteria to make Prozac. The process takes 4-5 days, and anyone can purchase the DNA code online. [url]
Researchers at the Salk Institute for Biological Studies have created a strain of bacteria that can incorporate artificial amino acids into proteins at multiple sites. This could be used to engineer bacteria to produce a variety of synthetic chemicals. [url]
Green algae could be a cheaper alternative to bacteria in the manufacture of therapeutic drugs. While bacterial cultures require lots of energy and nutrients to maintain, the algae need only sunlight and carbon dioxide in the air. [url]
To discover more interesting science-related stuff, check out what's currently floating around the StumbleUpon universe. [url]

By the way, StumbleUpon can recommend some good Techdirt articles, too.

Permalink | Comments | Email This Story

Making AIDS Drugs Affordable With Prizes, Not Patents

Glyn Moody — Wed, 7 Dec 2011 15:41:46 PST

Of all the dysfunctional parts of the patent system, drug patents are arguably the worst, since the exorbitant prices that patent monopolies allow mean that millions of people simply cannot afford medicines that would keep them alive or would improve their quality of life substantially.

One riposte to this criticism is that such high prices are needed in order to pay for costly research, but as Techdirt has noted before, that's just a myth. Another is that even if the system has its problems, there's no other way. But there is. In both the US and EU, the idea of replacing pharma patents with pharma prizes is gaining adherents.

One of the early attempts to do that came from Senator Bernie Sanders. At the time, we were rather sceptical because of the bureaucracy that seemed to be involved in this $80 billion scheme. Now he's back with a slimmed-down version of his idea:

I introduced a bill in the Senate that would test this new approach on drugs developed to treat one disease: HIV/AIDS. The measure (S. 1138) would eliminate legal barriers to generic competition for HIV/AIDS drugs and reward innovation directly, through a $3 billion a year prize fund.

< ...>

The prizes would be funded by the federal government and private health insurers in an amount proportionate to their share of the HIV/AIDs drug market.

Sanders claims the savings would significant: he hopes that the $10 billion US market for AIDS drugs could be supplied at generic prices for between $500 million to $1.5 billion. He also notes other benefits:

It will give larger rewards for drugs that improve healthcare outcomes and smaller or no rewards for duplicative, "me-too" drugs that are medically insignificant. It also would eliminate incentives to engage in wasteful marketing activities. Prize fund rewards will be based on evidence that drugs actually work and work better than alternatives.

Those "me-too" drugs and the huge marketing efforts that have to be put behind them to get them used instead of similar products from competitors are further symptoms of the patent system's failure to promote true innovation. The present scheme still leaves the problem of how to decide when drugs work "better than alternatives," and how much to pay for them, but at least the field has been narrowed down, which should make judgements easier.

As with his previous proposal, Sanders' latest bill doesn't stand much chance of being realized in the current political climate. But it's good to hear a US senator framing the issue in terms of patent monopolies and their distorted pricing:

The cost of the prize fund would be considerably less than the cost of buying drugs at monopoly prices.

Once people recognize that patents (and copyright) are monopolies, with all the disadvantages and abuses that implies, they might want less of them.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Permalink | Comments | Email This Story

Are The FDA & The Patent System Getting In The Way Of Saving Lives Again?

Mike Masnick — Wed, 24 Aug 2011 23:00:00 PDT

There was a somewhat horrifying article in the NY Times recently about some serious drug shortages in the US, especially for certain forms of cancer. There are a few efforts underway to deal with the shortages, but as the article notes, it's pretty ridiculous that there are any shortages at all, since "the number of cancers diagnosed in a year was easy to predict." Of course, the real problem is that in a claimed effort to "protect" people, the FDA has made it almost impossible for competition to exist:

A crucial problem is disconnection between the free market and required government regulation. Prices for many older medicines are low until the drugs are in short supply; then prices soar. But these higher prices do little to encourage more supply, because it can be difficult and expensive to overcome the technical and regulatory hurdles. And if supplies return to normal, prices plunge.

Left out of this paragraph, but equally important, are patents, which clearly hinder such competition as well. We've discussed in the past how the FDA can often get in the way of medical innovation. Even if it means well (and I'm sure it does), putting in place systems that make it too costly to create real competition does the exact opposite of its intended purpose.

Permalink | Comments | Email This Story

Justice Department: To Protect Pharma Profits, We'll Just Take Money From Google

Mike Masnick — Wed, 24 Aug 2011 16:01:28 PDT

So the big story of the day seems to be about the Justice Department getting Google to "forfeit" $500 million for having ads in the US for Canadian pharmacies. This isn't a huge surprise. News broke of the investigation a few months ago, when Google mentioned in an SEC filing that it had set aside $500 million to settle this particular matter. The Justice Department, in typical fashion, play up how they're protecting Americans from harm blah, blah, blah.

Here's the thing: I can't figure out how this makes any sense at all. First off, why is Google to blame? As we've discussed repeatedly, the US is pretty clear on its liability laws that liability should be applied to the party actually responsible, not third party platforms. Google accepted ads. That should not make it responsible for the content in those ads, let alone transactions that may occur because of those ads. Even worse, Google clearly made quite an effort to make sure such ads only involved legit drugs:

Google changed its policy on pharmacy ads in February 2010, so that it would only take ads from U.S. pharmacies accredited by the National Association of Boards of Pharmacy, and from online pharmacies in Canada that are accredited by the Canadian International Pharmacy Association.

So, now, as a media property that has advertising, do I need to fear that the Justice Department can force me to forfeit money because one of you clicks on an ad and makes a transaction that the government thinks is illegal? That's insane!

On top of this, it's even more ridiculous, because the US government has almost always turned a blind eye to grey market imports of drugs from Canadian pharmacies, because they know that without such affordable drugs, people will die. Here we have the Justice Department not helping to save lives, but helping to kill people off by making it that much more difficult to get approved drugs from Canada at more reasonable prices. In fact, amusingly, Senator Patrick Leahy is pushing legislation that will expand the ability of Americans to import such drugs (at the same time he's sponsoring the PROTECT IP Act, which wold force such sites off the internet -- he's not particularly consistent, that Senator Leahy).

Let's face facts here. This has absolutely nothing to do with public safety. This is a cynical move by the Obama administration to ensure support from the pharma industry. Early on in his administration, President Obama specifically supported allowing re-importation from Canadian pharmacies. In fact, the White House has repeatedly said that it's completely in favor of allowing such reimportation.

And yet now it takes $500 million from Google not for actually doing that, but for allowing ads to appear that promote a program the administration has officially endorsed? It's hard not to take the cynical view and simply see this as the US government taking from Google in an effort to make the US pharma industry (who hate, hate, hate Canadian imports) happy.

In the meantime, as Ryan Singel points out, Google is getting dinged $500 million here, while Goldman Sachs got dinged $550 million for "melting the economy." I guess Wall Street and pharma have much better lobbyists than Google.

Permalink | Comments | Email This Story

DailyDirt: Don't Drink The Water

Michael Ho — Fri, 19 Aug 2011 17:00:00 PDT

Water is abundant in most places, and it's generally free -- except for folks who only drink bottled water. So people tend to take water for granted, but there are plenty of reasons to conserve water. Here are just a few reminders.

About 60% of people (surveyed by the WateReuse Research Foundation) don't want to drink water that has ever had direct contact with sewage. The other 40% are wastewater engineers. [url]
Manufacturing plants are apparently releasing lots of pharmaceuticals into wastewater streams. And wastewater processing facilities aren't catching the drugs before releasing them into rivers... [url]
Oklahoma is responding to its ongoing drought after seeing more than its fair share of triple digit temperatures. Unfortunately, some predictions say this "exceptional drought" could last a bit longer, maybe until autumn. [url]
To discover more related links on stuff we eat or drink, check out what's brewing on StumbleUpon. [url]

By the way, StumbleUpon can also recommend some good Techdirt articles, too.

Permalink | Comments | Email This Story

Should Doctors Who Put Their Names On Ghostwritten 'Journal' Articles For Big Pharma Be Sued For Fraud?

Mike Masnick — Fri, 5 Aug 2011 08:41:00 PDT

A few years back, we wrote about one of the (many) nasty and nefarious practices of the pharma industry: ghostwriting scientific "review" articles that pretended to give an overview of research on a certain treatment, but which really promoted a specific treatment, while de-emphasizing the risks. These ghostwritten works were then made to look legitimate by getting a real doctor or academic to put their name on it, and then getting it published, sometimes in somewhat prestigious journals. Back in 2009, there was some movement on this story, as some Senators began investigating this practice... but not much came of it.

However, now, there's a fascinating article over at PLoS, arguing that guest authors who put their names on such ghostwritten papers should be charged with fraud under the RICO Act. The article argues that mere academic sanctions and/or banning such authors from publishing again in certain journals may not be enough. Instead, it suggests that a credible claim can be made in some cases on a RICO class action:

Because a journal’s readers are all harmed by the fraud, they may sue the guest in a civil RICO class action. One of their harms involves the value of the journal subscription. The subscription price represents the value of a year’s worth of articles that conform to the guidelines. Readers would not willingly pay for the fraudulent articles, as shown by the hypothetical example of a guest author who disclaims responsibility for authorship. Whether or not they read the article in question, its publication deprives them of the opportunity to read an article satisfying the journal’s requirements, and thus diminishes the value of their subscription. The harm may be measured by reducing the subscription price in proportion to the space devoted to the ghostwritten article. If the subscription costs $100, and the journal publishes 100 articles per year, it could be said that each subscriber suffers a $1 loss from a fraudulent article. The individual loss is small, but the aggregate loss to all subscribers may be significant—particularly if the cost is trebled under RICO.

While I find the whole practice of bogus pharma marketing of this nature to be ridiculous, I'm still not sure I see a strong RICO claim here. My guess is that a lot of courts would throw this kind of claim out pretty quickly. I agree that something should be done to stop ghostwritten articles, but I'm not convinced that potentially charging them under the RICO Act is going to be the most effective.

Permalink | Comments | Email This Story

According To Pfizer, A Clinical Trial Is A 'Marketing Strategy'

Tim Cushing — Wed, 6 Jul 2011 09:21:14 PDT

It seems like only yesterday (but it wasn't -- it was actually June 28th) that we were discussing the pharmaceutical industry and its general abuse of numbers to keep itself afloat. (In a pool full of money.)

Some more drug company ugliness has surfaced in a report published in the Archives of Internal Medicine. Examining documents uncovered during the Franklin v. Pfizer case, researchers came across details of a marketing ploy disguised as a Phase IV trial of gabapentin, a drug used for treatment of seizures and neurological pain:

"The Study of Neurontin: Titrate to Effect, Profile of Safety (STEPS)" study was a so-called seeding trial, in which the stated objective was to assess the safety and efficacy of gabapentin, but the actual aim was to increase prescribing of the drug by duping the very physicians recruited to conduct the "trial," according to three medicolegal consultants involved in litigation against the drug's manufacturer.

In the STEPS trial, Parke-Davis recruited 772 physicians to prescribe Neurontin (gabapentin) and titrate the dose upward in patients whose partial seizures were not completely controlled by other drugs. The drug company purposefully recruited "site investigators with little or no clinical trial experience [and] provided insufficient training," and limited enrollment to about four patients per investigator.

The study design was uncontrolled and unblinded, and its rigid titration protocol led to the exclusion of 87% of the study subjects. One institutional review board that twice rejected the STEPS application to be conducted at their medical center stated that "the entry criteria and outcome measures are too vague to allow any scientific conclusions to be reach[ed]." Parke-Davis sales representatives collected and recorded individual subject data. In a clear example of data tampering, they not only attended epilepsy patients' office visits (under the guise of "shadowing" the clinician), but also actively promoted the use of Neurontin and blocked the use of competing medications, particularly lamotrigine (Lamictal), at those visits. They also rewarded participating investigators with free lunches and dinners.

In addition(!) to the data tampering, exclusionary tactics, unethical recruitment practices and low-level bribery, the researchers also found that Parke-Davis' (a subsidiary of Pfizer) own internal documents referred to STEPS as "a marketing strategy" and that the trial's findings were secondary to "increasing market share in new prescriptions":

"Mr. Krumholz and his coauthors clearly demonstrate that the true intent of seeding trials is to introduce a new product and induce clinicians to use it," according to Dr. G. Caleb Alexander. As others have noted, "Deception is not just an incidental part of a seeding trial, but rather the very success of the trial depends on such deception, since few institutional review boards, investigators, clinicians, or patients would willfully participate in a study with marketing objectives and little or no scientific value," Dr. Alexander wrote in commentary accompanying the report.

When contacted about its ethics breach (an understatement along the lines of the "Titanic's hull breach"), Pfizer spokesman Christopher Loder responded with a canned response that he quite possibly copied right off Neurontin's (gabapentin) promotional pamphlet:

"Neurontin is an important FDA-approved medicine that physicians have prescribed to treat millions of patients safely and effectively. Neurontin has been widely studied for more than 2 decades and there is an extensive body of publicly available literature on its safety and its use."

True that, I suppose. But at this point you can add "as well as a growing body of publicly available literature on its unethical testing procedures and another in a long series of black eyes for the pharmaceutical industry" to the end of that little blurb any time you want, Chris. "Now" would be good.

Permalink | Comments | Email This Story

Senator Sanders Introduces Medical Innovation Prize Bills

Mike Masnick — Wed, 1 Jun 2011 15:44:11 PDT

For those who recognize the very significant problems associated with pharmaceutical patents, one popular alternative is to set up an innovation prize system, where the government sets aside large sums of cash as a reward for those who create a drug-based cure for certain issues. Senator Bernie Saners has now introduced two bills that would create potentially giant funds for such efforts -- one directed just at AIDS/HIV and one at much wider medical innovation. The bigger bill would set aside .55 percent of US GDP, or more than $80 billion per year right now. That's a pretty big chunk 'o change. The important parts are that it would also set aside at least 5% of the money to go to "open source" medical innovation efforts, which could mean about $4 billion going into open source research.

Of course, this isn't the first time Senator Sanders has suggested such a thing. Four years ago, he introduced a similar effort. As we noted at the time, there's almost no chance that this goes anywhere, because it's a plan that's simply too radical and would upset way too many special interests. That said, while I do think that this would definitely be significantly better than what we have now, I'm not at all convinced it's a good plan overall. To make this easy, I'll just repost what I said four years ago:

If the plan actually worked, and created new, more affordable drugs that saved many more lives, you could make a compelling argument that the net benefit to the economy would far outweigh the $80 billion (see Murphy and Topel's research for support on that). However, it's still not going to be easy to get people to buy into it. More importantly, it's not entirely clear how you'd allocate this money fairly. Any system like this where the gov't is giving away money is going to be gamed by the pharma companies in one way or another. It'll be so lucrative that it will be nearly impossible not to have the system gamed -- especially when it's going to involve a bunch of bureaucrats trying to determine the value of a specific drug. Finally, the bill seems to be entirely focused on pharmaceuticals -- which is part of the problem today. With so much healthcare policy focused on pharma, people forget that new technologies may start to make pharmaceuticals obsolete. Then we're left with an $80 billion subsidy for an industry that should be going away. I'm all for the economic incentives that come from innovation prizes, but building a huge mis-targeted gov't bureaucracy around them seems risky. Really, it seems to just be replacing one system of gov't subsidies with a different one, and that hardly seems likely to fix the problems currently facing the healthcare space.

Again, this would definitely be better than what we have now, but I think it just replaces one market-distorting government subsidy setup with a different one.

Permalink | Comments | Email This Story

Desperate Drug Companies Raising Prices On Drugs Still Under Patent

Mike Masnick — Fri, 8 Apr 2011 06:07:53 PDT

In recent weeks, we've discussed how drug companies are freaking out because they can't find anything new to patent, and their popular drugs are about to go off patent. Of course, as we've seen, having a monopoly lets them charge ridiculously high prices, and so the various drug companies (at least those who can't get the FDA to just hand them a new monopoly) are apparently dealing with the first issue by embracing the second one: they're ramping up prices on pretty much anything they still have under patent, with the largest increases being for those drugs that are closest to going off-patent.

Talk about a short-term strategy. Historically, it's been shown that when brand name drugs go off patent, they still command a significant premium in price over generic competitors. Yet, if the drug companies keep raising the prices higher and higher, it'll simply drive more people to seek out cheaper alternatives. If the drug companies actually priced the drugs reasonably, and recognized that they already had a strong branding lead (often on the backs of huge marketing campaigns), they'd realize they could keep a decent share of the market, even with somewhat higher prices. But simply trying to squeeze every last penny out of people while the drugs are still under patent seems like a strategy to completely give up once the drugs go off patent.

Permalink | Comments | Email This Story

Eli Lilly's Reliance On Patents May Be Its Downfall

Mike Masnick — Thu, 7 Oct 2010 22:34:10 PDT

Copycense points us to a NY Times piece about how pharmaceutical giant Eli Lilly is facing some tough times ahead. Why? Because the patents on the drugs that make up most of its revenue are all set to expire soon, and their pipeline of newly patented drugs is pretty far behind. Of course, what this highlights is the folly of relying on patents as your business model. The patents become a crutch, and you're unable to build a real business doing anything other than coming up with new patentable drugs. It takes the focus away from building a real business around making people healthy, to one that's focused on coming up with stuff we can sell that can be patented.

Permalink | Comments | Email This Story

Court Won't Rehear Pay-For-Delay Patent Lawsuit; We Pay, They Delay

Mike Masnick — Thu, 23 Sep 2010 10:26:04 PDT

Among the many, many nasty things done in the name of patent law is the rather disgusting practices of "pay-for-delay", where a big pharma firm sues a generic pharma maker for patent infringement, with no legal basis, and part of the "settlement" that is then worked out is that the big pharma will pay off the generic pharma not to enter the market with a generic for a certain period of time. Basically, it's a (by definition and government support) monopoly player in the market paying off competitors to keep the market exclusive. It's difficult to see how that's not a blatant violation of anti-trust law. But, alas, apparently the Second Circuit doesn't see it that way. In April it tossed out a lawsuit over this issue, because the pharma companies involved put in a few worthless other things into the deal that acted as "cover" for the real anti-competitive move -- and, since the "monopoly" was from a patent, the court didn't see it as an anti-trust issue.

So, basically, even beyond the basics of patent law, non-infringing generics are being kept out of the market through what certainly seems like it should be blatant anti-trust practices. The generic pharma asked the entire Second Circuit to rehear the case, especially since the original three-judge panel had expressed some concerns over its own ruling, and even thought that the case might benefit from a full panel review. And yet... that's not going to happen. Joe Mullin points us to the news that the court has rejected the request for an en banc (full panel) rehearing of the case.

It did this despite the fact that the Justice Department, the American Medical Association and 34 state attorneys general all filed briefs in support of an en banc rehearing. And, then there's the FTC which is against these kinds of deals as well, and claims that they've cost consumers over $3.5 billion per year, and that number is rapidly growing each year. Of course, with all that firepower against such blatantly anti-competitive deals that make it more expensive to get important drugs, you'd think that perhaps a law change would be in order. No such luck. While the big health care reform bill that was passed earlier this year at one time had a provision outlawing such pay-for-delay scams, it got dropped from the bill along the way.

Permalink | Comments | Email This Story

WHO Exaggerated H1N1 Flu Problems, After Consulting With Consultants Working For Pharmaceutical Firms

Mike Masnick — Thu, 10 Jun 2010 06:15:35 PDT

The deeper you look at the pharmaceutical industry, the more and more ridiculous it seems. Pharma has abused patent laws greatly for many years (even though many of the roots of the industry come from areas that refused to allow patents on drugs... until some companies got too big and wanted to limit competition). The latest news is that the World Health Organization apparently has been dinged for exaggerating the H1N1 flu threat... in part because they relied on pharmaceutical industry insiders for information. Guess what they suggested? Stockpiling a limited supply of super expensive pharmaceuticals, which were so super expensive thanks to patents limiting competition. Part of the issue is that the goals of the pharma industry are not at all aligned with basic public policy on health care. The incentive structure is entirely screwed up. Pharma has no interest in making sure people are healthy, but because sometimes its drugs happen to do that, as a side effect of making money for the industry, officials falsely believe that pharma execs should have some sort of say in public health policy.

Permalink | Comments | Email This Story

Pay-For-Delay Ban Dropped From Health Care Reform

Mike Masnick — Wed, 24 Mar 2010 14:42:00 PDT

While plenty of folks are still digging through what the new health care reform (really medical insurance reform) law really means (and it's likely not what you hear most of the TV pundits talking about), it's unfortunate to hear that the provision to ban "pay for delay" schemes from pharma companies was removed. We talked about these sneaky deals last year. Basically, big pharma companies threaten (and often sue) the makers of generic drugs, just before a drug is about to go off patent. There is no actual patent infringement as the basis of the lawsuit, but the lawsuit acts as a negotiating ploy, with part of the "settlement" being an agreement from the generic drug maker not to enter the market. It's a blatantly anti-competitive move. Basically, the pharma companies leverage their gov't granted monopoly to build up a bunch of cash, which they can then use to pay off potential competitors in order to keep that monopoly for years past the expiration of the patent.

It makes drugs much more expensive for everyone while being a clearly anti-competitive practice. So it seemed like a good thing that the health care reform bill was supposed to ban it. Until... of course... it was removed days before the bill was approved. No matter what your take is on health care reform, it's hard to see any reason to allow this kind of practice to continue, and even if it wasn't included in the the health care reform bill, and isn't included in the current patent reform bill, it seems like there's no reason the FTC can't just step in and make the point that this is blatantly anti-competitive. The FTC knows this is a problem -- and has even said that these sorts of deals have cost US citizens $3.5 billion per year in higher drug costs.

Permalink | Comments | Email This Story