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Crying About Higher Drug Prices: Are We Too Hard On The Pharmaceutical Industry?

Due to its lobbying efforts against drug importation reform to lower medication costs and funding of groups that mislead Americans about online pharmacies, scaring them away from safe and affordable medication sold outside the U.S., we often criticize Big Pharma on this blog. Speaking somewhat personally, I question myself sometimes whether they are deserving of such constant criticism. And then I read Daniel Hoffman from Philly.com in “Drug Prices: Higher and Higher” – and I’m reminded that they are!

Big Pharma is a on global government relations blitzkrieg to pressure countries into raising drug prices, spouting nonsense that the higher drug prices are supported by lower health care costs overall. Dr. Hoffman writes about pharma’s efforts in Germany to end a practice that enables doctors and other healthcare professionals to determine if new medications are truly an advance over old ones and merit higher drug prices. If they don’t then the government insurance plans will not reimburse for those products at a higher rate than older, proven medications. Seems fair!

Dr. Hoffman writes that India, with an incredibly dynamic pharmaceutical manufacturing industry, fights back against what that country views as overly aggressive intellectual property claims by Western drug companies. Sometimes India even views those patents as a threat to public health, and when it does it issues a “compulsory license” – the right to manufacture a generic even though there’s a patent in place.

I contend that this tactic can be abused by governments pressured by their own pharmaceutical industries – such as India. However, sometimes they are needed to save lives. What made me sick was a comment made by the CEO of Bayer, Marijib Dekkers, about India’s issuing a compulsory license for the drug Nexavar, which treats late stage kidney cancer. I’d prefer to quote a long section from Hoffman’s piece:

“We did not develop this medicine (Nexavar) for Indians,” Marijn Dekkers declared with unconcealed disdain.  “We developed it for western patients who can afford it.”

A spokesperson for Doctors Without Borders later claimed that Dekkers represents ” ‘everything that is wrong’ with the multinational pharmaceutical industry.” (See here.)

That may be one way of looking at it.  The other is that Dekkers is just more candid in admitting that pharma is all about making money and if millions of people have to die as a result, that’s just the way it is.

So are we being too hard on Big Pharma? The answer is no.

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Pay-to-Delay Settlements Benefit Companies, Not Consumers

We often report about policies affecting access to safe and affordable medication through personal drug importation, and advocate for laws that help American patients – not corporate profits. Like safe personal drug importation, faster access to generic drugs right here at home would make prescription drugs more affordable for uninsured and under-insured Americans. Unfortunately, last month the 2nd U.S. Circuit Court of Appeals made a decision that adversely affects consumers but benefits pharmaceutical manufactures of both brand and generic drugs. The court decided to decline a review of the “pay-to-delay” ruling of Arkansas Carpenters Health and Welfare Fund v. Bayer AG means that, once again, pharmaceutical profits are protected at the expense of greater consumer access to affordable medication.

The decision declares that Bayer, the manufacturer of Cipro, an anti-infection drug, is lawful in paying Barr Laboratories, a large generic drug manufacturing company, $400 million to not challenge Bayer’s patent, which protects the high price now charged for Cipro. When generic drug manufacturers successfully challenge the validity of a patent, they are able to more quickly manufacture and sell low-cost versions of the drugs. Settlements that prevent such patent challenges cost consumers $3.5 billion a year, according to Federal Trade Commissioner Jon Leibowitz.

The 2nd Court’s decision was based on that same court’s earlier ruling of In re Tamoxifen Citrate Antitrust Litigation, 466, F. 3d 187 (2006), which found pay-offs to generic drug companies do not violate anti-trust law. There have been 53 similar pharmaceutical patent settlements, resulting in a variety of drugs with prices out of reach for many American patients.

Such rulings indicate that American patients can only win if the issue is decided differently by the Supreme Court or, and more likely, Congress changes the law.

Senator Herb Kohl is one congressman looking to make this happen. Senator Kohl introduced the Preserve Access to Affordable Generic Drugs Act (S. 369), legislation, which is still pending, to combat the practice of pay-off agreements between pharmaceutical companies and reduce the number of pay-for-delay settlements that keep generic drugs off the market. This legislation would be a big step in protecting consumer’s interests and health costs, and we hope for its success.

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