White House Plan To Reduce Drug Prices… Is To EXTEND Patents?

from the that's-not-how-it-works-at-all dept

While Congress is still doing its thing to try to make the US healthcare system an even bigger laughingstock around the world, the White House is apparently considering an executive order targeting high drug prices. Of course, it handed this power over to Joe Grogan, a (very recent) former lobbyist for a giant pharma company, Gilead, that has been at the center of some controversy over its highly priced drugs. Grogan is apparently leading this effort despite not having an ethics waiver, which means he’s supposed to recuse himself from these discussions, rather than lead them. But, you know, that’s not happening in the swampy, swampy waters of Washington DC. So just what would Grogan suggest as a way to lower drug prices? How about extending pharmaceutical patents? Yes. Extending.

The documents reveal behind-the-scenes discussions influenced by the pharmaceutical industry. Joe Grogan, associate director of health programs for the Office of Management and Budget (OMB), has led the group. Until March, Grogan served as a lobbyist for Gilead Sciences, the pharmaceutical company that priced its hepatitis C drugs at $1,000 per pill.

To solve the crisis of high drug prices, the group discussed strengthening the monopoly rights of pharmaceuticals overseas, ending discounts for low-income hospitals and accelerating drug approvals by the Food and Drug Administration. The White House declined to comment on the working group.

In what world does anyone with even the slightest economic knowledge think that extending/expanding monopoly powers would bring prices down rather than up? Want to know one of the reasons why drugs are so crazy expensive right now? It’s because those monopoly rights have already gone way too far. If you want lower prices, you want competition in the market, not monopoly suppliers who know they’re dealing with major health issues — and the willingness of insurance companies to pay through the nose.

You can criticize all sorts of things about the way healthcare is handled in this country, or how drug prices are determined. But, it’s impossible to see how anyone with a straight face could possibly claim that increasing patent rights would lead to lower prices. Of course, the argument here is effectively that by making patent powers greater overseas, the big pharma companies can milk foreigners for higher drug prices… which would make it easier for them to drop drug prices at home. Here are the details from the report:

Extending the patent life of drugs in foreign markets to ?provide for protection and enforcement of intellectual property rights.? This will ensure ?that American consumers do not unfairly subsidize research and development for people throughout the globe.?

Except, raise your hand if you think that drug companies would voluntarily lower drug prices in the US, just because they can now also price gouge sick people in other countries? Yeah, didn’t think so. If you want to lower drug prices, the way to do it is to cut back the monopoly powers of Big Pharma so that they’re actually forced to compete more. This isn’t a theoretical or academic claim. Just look at the price of drugs after one goes off patent. They immediately drop. Want cheaper drugs? Ditch the patents and watch the market do its thing.

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Comments on “White House Plan To Reduce Drug Prices… Is To EXTEND Patents?”

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PaulT (profile) says:

Re: Re: Logic

It’s pretty well documented, I think. For example on a quick search:


Fun fact: in many (most?) other countries, the kind of direct marketing of prescription drugs to consumers common in the US is expressly prohibited. They can only market to healthcare professionals, for the public they can only market over the counter medicine.

DannyB (profile) says:

Re: Re: Re: Logic

Dear Mr. Trump,

Please get drug companies to stop convincing people that they have the problem that the expensive drug is a cure for.

Drug companies should refocus resources on R&D efforts into ways to cause people to develop new, novel and unprecedented diseases. Terminal diseases, heretofore unknown in history, for which the expensive drug is the cure.

It would be be a better use of resources. It has potential military applications. Cures for new terminal incurable diseases increase drug sales. Therefore increase revenue, and therefore profits. Increasing shareholder value. Leading to higher executive bonuses. Which somehow magically trickle down to the poor, if they live long enough. And it increases tax revenue so congress has more money to spend on projects like helping states to determine what species should be recognized as their official state tree. And it greatly increases campaign contributions.


All US citizens

David says:

Re: Logic

In other words: the logic used to justify this is perfectly valid in a completely different world.

I’d propose to but our representatives to that foreign world they are arguing for but I’d be jealous.

Instead I’d rather compell them to create this world without cut-throat capitalism that they are basing their arguments on here, or be jailed for fraud.

Anonymous Coward says:

There are drugs that are needed that are generic. They are in short supply, anyone out there with a FDA certified plant can make them, they are off patent.

These drugs are best in class, yet no one can get their hands on them because no one wants to make a generic drug. Go figure.

Investment chases return, always have, always will.

Some of those workgroup ideas are targeting discriminatory pricing, which won’t work.

Only one way to really bring down prices, and that is to mandate it. Getting rid of patents really won’t do it, because that just hurts research.

Anonymous Coward says:

Re: Re:

You can solve the economic recouperation cost for non-generics, by setting a recouperation guarantee (the government guarantees a specific economic compensation and if the sales aren’t there, the government will pay the rest after a specified time). But big pharma would never go for that since it would reduce the economic leverage they can put on the pills. But if it requires patents is actually a good question.

The generic problem is much more difficult. Essentially generics are a cheap commodity version of a formerly patented drug. The problem with them not getting produced points to a problem that is much more systemic and cannot be solved by price mandates: The cost of marketing is ridiculous.

The only way to solve the problem is to regulate the process from the manufacturing to the product is in the hand of the consumer better which neither price mandates on their own or changing the patent system can solve.

Anonymous Anonymous Coward (profile) says:

Re: Re: Re:

There is another way. Single payer. Have the government buy all the drugs needed for the country. The competition to get anything sold will drop prices dramatically. Too boot, very little regulation would be needed, and it would be very easy to audit those purchases. Just compare them with Canadian pricing.

PaulT (profile) says:

Re: Re: Re:2 Re:

I prefer a system where the customers are using the drugs prescribed to them by experienced impartial medical professionals, based on the symptoms and condition they’re actually suffering from, and not who has the highest marketing budget in a system with prices inflated by artificial monopolies.

Thankfully, I’ve spent most of my life in those systems rather than the US one.

Anonymous Coward says:

Re: Re: Re: Re:

Like fake Cuban cigars, the intellectual property of communist countries was routinely flouted outside the country, while the IPs of “free world” countries were similarly not recognized within the sphere of communism. So it worked both ways back then.

But now Russian companies are trying to regain control of iconic trademarks, such as “Kalashnikov” and “AK-47” and would no doubt like license fees from companies all over the world building such Soviet-era products.

Anonymous Coward says:

Re: Re: Re: Re:

Soviet space and military technology was not far behind that of the West (and in some cases was ahead) because that was what the government considered the most important.

Since the end of the Cold War, military technology has slowed down. For instance, the main US battle tank, the M1 Abrams, was designed way back in the 1970s. (but that’s OK, since the Soviet tank designs were even older).

Third world nations are happy enough buying half-century old Soviet-era tanks for their growing armies, and prices for T-72 and T-80s in the world market are held down by the fierce competition from former communist-block countries such as Ukraine and Poland which make copies of these Russian designed tanks, completely unlicensed and royalty-free, often undercutting the “official” Russian-built ones on price.

If only the Soviets had foreseen the end of communism and the breakup of their empire, they might have secured some kind of licensing deals on their military hardware before it became a free-for-all. But their lack of business acumen is their loss and the world’s gain.

Gorshkov (profile) says:

Re: Re: Re:2 Re:

Third world nations are happy enough buying half-century old Soviet-era tanks for their growing armies, and prices for T-72 and T-80s in the world market are held down by the fierce competition from former communist-block countries such as Ukraine and Poland which make copies of these Russian designed tanks, completely unlicensed and royalty-free, often undercutting the "official" Russian-built ones on price.

Not true. After the breakup of the Soviet Union, per agreement, countries were specifrically given ownership of whatever assests were physically in their country, with the exception of the nuclear forces. They wern’t making "copies" at all – they were making the real thing.

Also, the tank designs you refer to – (same for the M-1) – are continiously updated. Basically, the only thing a modern T-72 has in common with one from the Soviet era is the frame.

PaulT (profile) says:

Re: Re:

“Of course, now your drugs will come from people equivalent to the DMV”

As opposed to people who will happily raise the price by a factor of several thousand, secure in the knowledge that you still have to pay for it no matter the cost? Who will screw you and your family over in a heartbeat if it improve this quarter’s profits? I think many people will accept that.

Also, what is it about “American exceptionalism” always seeming to imply “exceptionally bad”? You seem convinced that having healthcare systems similar to the ones present in every other developed country will inevitably lead to communism or anarchy, even this has not happened anywhere else. You seem obsessed with spreading your brand of democracy across the globe, you convinced that anything that the resulting democratic government touches will inevitably fail. It’s a very strange mindset some of you have.

Anonymous Coward says:

Re: Re: Re:

Strange mindset? We have a strange mindset? You mean Capitalism? What is your mindset? Our “democratic government touches will inevitably fail”? Really?

I’m telling you, you foreigner leftist globalists are on worldwide retreat, for sure. We (Americans) will lead the way by publicly crushing your stupidity in open elections, and the rest of the world will follow. Like always. MAGA.

PaulT (profile) says:

Re: Re: Re: Re:

“We have a strange mindset? You mean Capitalism?”

No, I mean the “we want a democratic government but are convinced that allowing the government to run anything will lead to inefficiency and failure” mindset so often espoused. It’s totally contradictory.

“Our “democratic government touches will inevitably fail”? Really? “

That’s what you people always claim, yes.

“I’m telling you, you foreigner leftist globalists are on worldwide retreat, for sure.”

It doesn’t matter how many idiotic, meaningless buzzwords you use to hide your claims, they’re still laughable.

Can you think for yourself, or do you just mindlessly repeat slogans you heard somewhere?

Wendy Cockcroft (user link) says:

Re: Re: Re:2 Re:

Given that “leftist” means “anyone who cares about the public interest” and that the Red Scare is still in full swing, the only way to be politically orthodox, to the right-wingers, is to not give a rat’s about other people at all and to denigrate the public interest at every opportunity.

It explains why UK Prime Minister Theresa May was lambasted by the right wing press in America for promoting “liberal democracy.” That’s their idea of a nightmare.

Peter (profile) says:

“He says the U.S. government, however, could cut the cost of treatment by almost two-thirds by buying Gilead on the open market – its market capitalization on March 17 was about $90 billion — and selling off all its assets except the U.S. rights to Sovaldi and Harvoni.”

Anonymous Coward says:

Considering the way that copyright terms have been extended repeatedly by Congress, perhaps we should be very glad that patents don’t grant the holders anywhere close to the 100+ year monopolies that copyrights bring.

It’s a wonder why patent-rich corporations such as the drug industry have never really pushed for the kind of “forever minus a day” terms that Hollywood movie studios successfully lobbied for.

Maybe only now they’re starting to realize that they have plenty of catching up to do.

Anonymous Coward says:

Re: Re:

No. That is not one of the President’s powers. Not that it will stop him from trying, but any move to use an EO to do so will likely yield an immediate legal challenge (or several) including a request for a stay while the matter is litigated.

On a more personal note, my EpiPen has expired. If I’m stung, I’m now faced with either (a) taking the risk of using it or (b) taking the risk of not using it. I certainly can’t afford another one, well not unless I want to skip eating for a couple of months.

Anonymous Coward says:

Re: Re: Power

well, the story here looks pretty gossipy/fake-news, particularly the patent extension stuff.

referenced story-source is Kaiser Health News, which in turn claims to rely upon anonymous sources and mysterious documents alleged to reveal discussions within Trump’s “Drug Pricing and Innovation Working Group.”. But there’s no mention of patent extensions. pretty weak “journalism”. seems more of a routine hit piece on Trump

Talmyr (profile) says:

Re: Re: Re: Power

You mean, Trump does a bunch of stupid things that only benefit the super-rich and large companies and this story fits that experience perfectly – not much of a hit piece then, if it’s along the lines of “Orange Dictator carries out more of his regular legislative plan”.

Tell you what. When Trump actually helps some of the less well-off (without there being some huge pay-off elsewhere) then we’ll protest these stories more. Until then, we’ll continue to believe his actions are consistently anti-humane.

Meantime, don’t you have some bushes to hide in?

Anonymous Coward says:

this is all part of Trumps ‘Master Plan’! in fact, it sounds like a good alternative to what was used in post WWII Germany! all this government is interested in is ensuring that the ‘master race’ the ones controlling the wealth of the nation, can carry on doing so while making more money for themselves at the expense of the ordinary people! perhaps if those who suffer from various illnesses start to drop like flies because they cant afford the medication they need and the jobs they used to do dont get done unless the wealthy roll up their sleeves and stick their hands in the shit, what is needed will then be done!!

Anonymous Coward says:

Post WWII Germany? Really? That's your comparison?

It’s amazing what these leftists will stoop to. What you are witnessing with this article, and with the recent elections, is the complete collapse of the Leftist agenda, including the anti-Patent, anti-Copyright anti-Government agenda of this site. It’s falling down all around you.

I understand the “post-war” mentality on the left, but this was just a propaganda war, and you lost, bigly . Sooner or later, you will think about rebuilding a new platform, likely without TechDirt, I don’t think you will see those ideas here. This place already reminds me of Dresden, scary, with just blown out frames of fractured ideas present. No good ones, nothing behind any of them except hate and throw-back to Nazi times.

Anonymous Coward says:

Re: Re: Post WWII Germany? Really? That's your comparison?

Well, you’re often well spoken, what do you think? The patent office lost Michelle Lee, the Supreme Court has another conservative in Gorsuch, the Republicans have won interim elections 4-0 despite huge Hollywood and media support, and I see the anti-patent anti-government leftist agenda collapsing. The Russia story is pretty much dead, nobody cares about it anyway, Hillary is widely hated by right and left, and there is no leader emerging. Mike looks like he is being held hostage while on stage, can’t breathe or speak normally. The left is getting pummeled, right? Or do you see it another way?

Talmyr (profile) says:

Re: Re: Re: Post WWII Germany? Really? That's your comparison?

1940, 1941…Germany was running rampant around Europe and Russia (with some Italian help). France was flattened and the UK restricted to its sceptred Isle. The US was conspicuous by its usual absence from the war against dictators.

1942, Japan joins in the fun, taking over the Far East and giving the US a big black eye. Fortunately, Germany was stupid enough to declare war on the US as well as the USSR and you lazybones decided to get involved in both campaigns. After a long, slow 2-year grind we were slowly making progress, and after 3 we finally won.

So no, we don’t think we’ve lost yet, Sooner or later the inhumanity of the GOP/Mango Mussolini’s program will come back to bite them and we can take a few more steps forward to universal health, well-being and prosperity.

Anonymous Coward says:

Re: Re: Re:2 Post WWII Germany? Really? That's your comparison?

And on that glorious day, will we all sing “Kumbaya” together? Universal health, that’s for the whole Universe, right? As well as well-being AND prosperity. Maybe that would be a little ambitious as a “first step” after Republican rule for 200 years (likely event).

Mike Masnick (profile) says:

Re: Post WWII Germany? Really? That's your comparison?

What you are witnessing with this article, and with the recent elections, is the complete collapse of the Leftist agenda, including the anti-Patent, anti-Copyright anti-Government agenda of this site. It’s falling down all around you.

I’m curious how one argues that anti-patent, anti-copyright is somehow a "left" agenda. After all, patents and copyrights are centralized government monopolies and subsidies handed out to individuals and companies. That sounds very much like a "leftist" ideal. Whereas "the right" claims to be about less centralized government and a free market — something that copyright and patents directly oppose.

Anonymous Coward says:

Here is a fact, the US has the best medical care in the world. We provide the best medical care anywhere. When a dictator gets sick, where does he go? Of course the US. When a pilot in Switzerland gets cancer, where does he go? Of course the US.

Our medical treatment is second to none.

Of course, how we pay for it is a different system.

Anonymous Coward says:

Re: Re:

“Here is a fact, the US has the best medical care in the world.”

Please define “best”.
Is it “best” in a technical/medical sense?
– citation needed
Is it “best” if you can not afford it?
– no citation needed as this is common knowledge

Seriously, your flag waving is cute but it does no one any good.

Anonymous Coward says:

Re: Re: Re:

According to this


the US has 16 of the top 30 hospitals in the world.

Here is also a fun fact, we are talking about healthcare, but this article is about pharmaceuticals. In all healthcare spending, pharmaceuticals only make up about 14% of healthcare dollars spent.

If you want to fix healthcare, drug prices won’t do it alone.

PaulT (profile) says:

Re: Re:

“Of course, how we pay for it is a different system.”

Even if the other claims are true (and they are somewhat faulty), therein lies the rub.

If a system provides top notch medical care to the rich, but it is priced out of reach of a huge proportion of its citizens, then it is not the best by any reasonable definition.

“When a pilot in Switzerland gets cancer, where does he go?”

I wonder, did you have a specific example in mind there, or did you just randomly pick it from thin air? Because it amusingly reminded me of articles like this, arguing that the Swiss medical system is actually the world’s best.


Anonymous Coward says:

Re: Re: Re:

The pilot example comes from one of the local NYC hospitals that use him as a radio ad. He states “I could have gone anywhere in the world, but I chose to go to …(I forgot the name of the hospital, sorry)

I agree, it is expensive, is it out of reach for a “huge” proportion of its citizens? Not so sure about that.

It is a fact that a large percentage of people who file bankruptcy here in the US preceded that with medical costs.

PaulT (profile) says:

Re: Re: Re: Re:

“The pilot example comes from one of the local NYC hospitals that use him as a radio ad.”

OK, so something that most people won’t get since most of the world won’t have seen that ad? That’s not a great reference if you’re trying to argue on a global scale. By the way, has anyone confirmed that he’s actually a pilot who made that choice, or just someone acting as one for the ad?

“I agree, it is expensive, is it out of reach for a “huge” proportion of its citizens? Not so sure about that. “

There’s a long debate to be had there, although I think that the top echelon care you were referring to is certainly out of reach. At the very least, the figures for people who were denied care for pre-existing conditions (something which Trump is promising to re-introduce), lower access to preventative rather than emergency care, and care which is avoided by people who can’t afford the bill seem to take up a significant percentage. But, unless you come up with a baseline as to what actually constitutes “high quality care” and “access”, you can make the figures say whatever you want.

“It is a fact that a large percentage of people who file bankruptcy here in the US preceded that with medical costs.”

This is true. Just as it is true that this simply doesn’t happen in most other places in the world. That, again, is a reason I’m glad I didn’t grow up in the US – from early medical issues for myself as a child to intensive care treatment for my father in the last year of his life, worrying about the bill was not something my family has ever had to do.

Anonymous Coward says:

And here is another fun fact. In the future, maybe soon, maybe far off, there will be no jobs in the United States, and probably the world. AI and advanced automation will eliminate pretty much ALL jobs.

How do we as a society deal with that? It is happening on a small scale now, but that will speed up. Bernie Sanders was just a candidate too soon.

The question is will it be a good thing or a bad thing? Will future generations have great lives or will we need someone like Matt Damon to lead us to Elysium?

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