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Posted on Techdirt - 24 March 2011 @ 11:35am

FDA Suddenly Bans Drugs That Have Been On The Market For Decades

As Techdirt recently discussed, the drug pipeline is running dry, 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 lovastatin 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 (pdf).

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 US (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 versions 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.

It’s 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…

Posted on Techdirt - 15 January 2011 @ 12:00pm

Hephaestus' Favorite Stories Of The Week

This week’s post on favorite stories comes from regular commenter Hephaestus

In human history, we have people who stand out. These are the people that believe in community, that fight oppression, that innovate, that create the next big thing sometimes with out even knowing it. That’s who I’ve chosen to highlight in Techdirt posts from the past week.

The people around you and the community you build is important. Community Is About Enabling People To Be Heard. Everyone wants to be a part of something larger, something greater than themselves. Unless you have a huge ego and just want to be worshipped.

For standing up to those who wish to oppress, I give serious Kudos To Twitter For Not Just Rolling Over When The US Gov’t Asked For Info. Some of what Twitter did comes from doing what is right and just and maintaining trust. And some of it comes from the fear of financial loss. In the world of business on the internet, they are related. People now talk at the speed of light, so if you break the trust everyone knows almost immediately. This brings me to three givens for internet community, if you lose the trust, you fail to innovate, or if you get bought up by Rupert Murdoch, you lose the community.

Small innovations that occur as part of a larger trend are often overlooked by incumbent businesses. One such trend is the rise of low cost, high quality digital cameras. While the iPhone is does not have the best video quality, a Korean Director Shot a Movie With Just iPhones. The movie is 30 minutes long and seems to be more of a publicity stunt targeted at iWhatever fanbois than a serious attempt at film making. This puts the fact that films and TV shows can be made on a cellphone in the public mind. Combine that with YouTube extending the length of allowable videos and you have a serious disruption waiting to happen. It is only a matter of time before someone does a TV series about a robot on an Android, just for the publicity it will generate.

I have great hope for the next couple of years. Slowly we are seeing things change, sometime for the worse — sometimes for the better. On one side, we see the incumbents in several industries fighting the changes that are occuring with lawsuits, and laws designed to stop the advancements being made. On the other side, we see small incremental changes being made in reaction to these laws and lawsuits. Information technology, open source, online communities like Facebook and Linkedin, changes in the way we find information, all marching forward at a very rapid and predictable rate. We see existing disruptive trends accelerating, and new ones occuring all the time. None of which can be stopped, just slowed down a little.

Oh and my least favorite story of the week, because I want a recount (!!!) is this one about Techdirt’s 2010 numbers. Congrats to Dark Helmet for posting a single comment more than me last year.

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