Overzealous protection of consumers’ safety coupled with robust patent protection has created a mechanism whereby large pharmaceutical companies can rapaciously raise prices without any fear of competition. It’s easy to blame the greed of the drug companies. They are, after all, the ones profiting from the situation. What do we know of human nature, though? If it’s possible to profit from a loophole or by gaming the system, someone will do it. So, how DO they do it?
Upon successful application for a patent and FDA approval, a company has 20 years of government-mandated monopoly in the form of a utility patent. In today’s age of invention, 20 years may appear to be an absurd amount of time. It gets worse, though. While generics can, in normal circumstances, gain FDA approval relatively easily after a patent expires, they cannot do so if a NEW patent has been filed on that drug with an improvement, however marginal. In layman’s terms this means that an owner of a patent can extend the patents on their drugs by making superficial improvements every 20 years. I don’t know about you, but I’d rather have access to a slightly less effective drug at a fraction of the price than continue to line the pockets of patent trolls. Additionally, the existence of a cheaper option puts pricing pressure on the name-brand drug and makes it more difficult for them to raise prices.
Unfortunately, that STILL isn’t the end of the story. Generics have an avenue to fast FDA approval, but biosimilars must go through a far more vigorous and expensive approval process. It even includes the necessity of expensive clinical trials. Why? The primary difference between generics and biosimilars is the size of their protein molecules. While this may render proving identical properties more difficult, it by no means necessitates the rigor with which it is treated. In fact, we are alone in the world in doing so. Cheap biosimilars for insulin exist everywhere but here for precisely that reason. Just for emphasis, I’ll say that another way: people all over the world are having their lives saved by drugs the FDA is not approving. Obviously we do not want dangerous or ineffective drugs on the market, but we have crossed the line from protection to prevention of access to affordable and beneficial care. The costs of waiting must be weighed against the benefits of a slightly lower chance of a harmful drug being used to treat patients. As competition enters the market, costs are immediately driven down and consumers benefit. What, then, should we do?
Any action is going to have consequences, both positive and negative. We can safely assume, though, that our system as it exists is too protective of pharmaceutical companies and their patents. Drug costs will plummet with the possible economic cost being that of lower investment in research and development in novel drugs may decline upon reduction of the length of patent protection. Additionally, we need to minimize costs to obtaining FDA approval and fast-track drugs already approved by similar agencies and Europe and/or Canada. We have a long way to go towards improving our healthcare system, but these actions would be a welcome beginning.