As Techdirt recently discussed, the drug pipeline is running
, as Big Pharma's patents are beginning to expire, and the drug companies are freaking out. For years they have been spending more money on research and testing and getting fewer results
. This year alone they are
going to have 11 patents expire on drugs that bring in approximately $50 billion in revenue to the big pharma firms. Of course, the flip side to this is that consumers can start saving about 95% on the price of those drugs, as generics hit the market. The
drug companies have gotten to a point where the incremental increases in
efficiencies are so small as to be meaningless. What is coming is more personalized and targeted treatments
for diseases -- treatments that do not
require bulk production of a specific chemical, but individual testing and
personalized care, and not lifetime treatments and repeat sales, but cures. The treatments will be expensive to begin with, but they will become less expensive over
time. The business model of healthcare is about to
change dramatically, and Big Pharma needs to do something to maintain their profits.
Unfortunately, they seem to have chosen the path of regulating the competition
out of existence, rather than competing and innovating.
One way the drug companies have been coping is to repackage and rebrand
health food supplements. Drugs like Lovaza
, which is nothing
more than the fish oil
you can get in health food stores, and
which has been in use for roughly a thousand years
(800 AD) in the form of red yeast rice
. In the case of
lovastatin, the FDA banned the supplements
because they are "identical to a drug
and, thus, subject to regulation as a drug." That is very convenient
for the drug company, which now charges monopoly rents on the product -- which can increase prices
at ridiculous levels.
More recently, the FDA banned 500 prescription drugs
that had been on the market and working for years. To be fair, it was really 50-100 drugs
(pdf), made by different companies, but that just highlights how there was actual competition in the marketplace for these drugs, which has now been removed. For
all of the drugs, there is either a high-priced prescription version, or all
the small manufacturers have been removed, leaving a virtual monopoly for one
or more larger companies. This process began in 2006 when the
FDA decided to remove marketed unapproved drugs
The reasoning is that these drugs weren't ever technically "approved" by the FDA. While the FDA has been around for about a century, the business of having the FDA first approve drugs before they could go on the market came about closer to fifty years ago
, and a bunch of "unapproved drugs" that were in common usage before that never got approved. The FDA is targeting many of those, even if they have a long history in the marketplace. Conveniently, of course, there always seems to be a pharma company with a monopolized substitute ready.
In 2006 the first "new" monopoly that was created by this FDA process was for the
malaria drug quinine sulfate
. This left
only Mutual Pharmaceutical Company to manufacture quinine in the
(pdf). While malaria is not a disease that affects many people in the US, it
is big business worldwide. Malaria causes 300 to 500 million
infections and over 1 million deaths
each year. Treating this disease with
quinine used to cost pennies a day. In fact, the British turned this
treatment into a cocktail, the gin and tonic (quinine water)
Another drug removed was the antihistamine carbinoxamine
which was created prior to needing FDA approval, in the early 1950s. It was
approved by the FDA in a slightly modified form in 2006. It is
now sold exclusively by Mikart, Inc and Pamlab, LLC with no future competition
because the FDA has banned all 120 other
of carbinoxamine. You can imagine just how much that must increase the profits for Mikart and Pamlab on carbinoxamine, though that seems to come at the expense of consumers.
really nice being granted a government monopoly.
As for the drugs now being banned in this latest purge, you can argue that it's not really 500
drugs, because many are different combinations of the same 50 to 100 drugs.
To be sold, these disapproved drugs will require drug trials and
certification -- a massive and expensive process. Under current law, after
successful completion of FDA trials these drugs will be granted approval. But
in every case these trials are almost certainly not necessary. And, "coincidentally" in almost every case, there is a chemically similar
patented version ready to go. This is a pure money grab: replacing old
tried and true drugs, with monopoly priced prescription drugs. It just
requires removing competing drugs from the market to increase profits.
And with that, I'm off to go have a gin and tonic, while it's still legal...