Tag Archives: generic drugs

Drugsters Back on Top in Latest Health Care Reform Deal

What the press refers to as “tweaks” in the new version of health care legislation would appear to hand Big Pharma a sizeable victory, allowing the companies to extend life times of brand name drugs by selling them at discounted prices within the Medicare drug plan.

The latest deal is once again being portrayed as a magnanimous gesture by the profitable pharmaceutical makers–and to help the poor guys out a little and lessen the strain on their stockholders’s pocketbooks, the government apparently will come in to pay the companies some of the dough they lose in providing discounts. To put it another way, it looks like the discounts aren’t really discounts at all. In the world of Congressional smoke and mirrors, they miraculously become a subsidy.

Government policy ought  to push less expensive generic drugs into the marketplace. Mandating their preferred use by Medicare would be one small step in that direction. Generally speaking, the brand name drugs should be eliminated when their patents run out. The proposed legislation apparently will have the effect of lengthening the drug companies’  monopoly on certain drugs, thereby assuring higher, not lower prices.

Although somewhat confusing, an article in yesterday’s New York Times has details on the latest deal. And I’ve written before on how discounts are transformed into profits for Big Pharma–see the following posts:

Big Pharma’s Phony “Gift” to Seniors

More on the Pharma Con Job

 Bottom line: cost control is sacrificed to market monopoly

How the FDA Helps Big Pharma Keep Drug Prices High

The Obama administration and members of Congress are gnashing their teeth over the price tag for health care reform, and the White House has launched a commission to cut Medicaid, Medicare, and Social Security–the “entitlements” that are supposedly bankrupting the country. But why does health care cost so much in this United States? We find one clue buried in Saturday’s papers–and it’s got nothing to do with old people or poor people.

Here, in a speech reported by the New York Times, Dr. Margaret A. Hamburg, the head of the FDA, describes how the government participates in running up Big Pharma’s profits by slowing approval of generic drugs. These delays give the brand name manufacturers more time to sell their more expensive versions. Over the last year, prices of brand name drugs have been rising sharply, keeping Big Pharma’s profits high. The Times reports:

The delays, caused by a growing backlog of applications at the Food and Drug Administration may be costing consumers and the federal government hundreds of millions of dollars a year as they continue in some cases to pay for name-brand drugs even after their patents expire, industry analysts said.

The new head of the F.D.A. says she means to speed up the process.

“It’s a real problem,” Dr. Margaret A. Hamburg, the F.D.A. commissioner, told an audience this week at the annual meeting here of the Generic Pharmaceutical Association ,an industry trade group. “I don’t pretend to believe that the status quo is acceptable.”

Saying the F.D.A.’s generic drugs department was underfunded, Dr. Hamburg noted a potential remedy: placing application fees on companies seeking approval for generic drugs.

Five years ago, the F.D.A. typically approved a new generic drug within 16.3 months of the application’s filing, according to a report from the agency on Tuesday. But by last year, with limited staff to review an increasing number of applications, approvals for new generic drugs were taking 26.7 months, the report said.

More on the Pharma Con Job

By the way, there’s more than one reason for the purported $80 billion in drug company largesse to the decrepit classes, which I discussed yesterday. This most recent ploy is yet another of Big Pharma’s machinations to extend the life of drug patents, and keep people taking their exhorbitantly priced brand-name drugs. As Reuters points out today, when seniors reach the Medicare Part D donut hole, the majority of them percent either stop taking some of their drugs altogether, or switch to cheaper generics. To keep that from happening, the drug companies are more than willing to offer oldsters their “generous” discounts on brand-name drugs. 

Right now, a company winning regulatory approval of a new drug from the FDA can get monopoly protection under the patent law for 20 years. (Since the patent clock starts ticking before clinical trials begin, the actual life of the patent can be anywhere from 7 to 12 years). Once that time is up, the firm can then file for an extension which can run another 30 months. During that time,the big pharmaceutical company can sue the companies that want to put a generic equivalent on the market, and hence keep the patent in place. And when that time is up, the company can slightly alter the chemical composition of the drug whose patent is running out and introduce an entirely new drug (like Nexium replacing Prilosec). If the FDA goes along with that, the clock starts ticking all over again.

Carolyn Caffrey, an Unsilent reader, makes an important point in her comment on yesterday’s post, which helps explain why the drugmakers are grasping at every possible ploy to keep brand-name drugs sales going.

A LOT of their “cash cow” drugs are up for patent expiration in the next few years. They stand to lose HUGE money. And quite a number of those are drugs used widely by Medicare patients…like Aricept for Alzheimers. So, they’re trying to cut their losses by discounting ONLY brand name prescriptions as a way of squeezing extra life and dollars from those through the Medicare program. I just completed a little summary of 18 of the top “patent cliff” drugs whose patents expire in the next 3 years. But here is a partial list of top sellers that will be open to generics:

in 2010: Lipitor (the #1 drug in retail sales with annual sales in 2008 of $5.9 BILLION); Advair, Levaquin, Cozaar, and Aricept.
In 2011: Seroquel, Zyprexa, Actos, Xalatan, Aprovel, and Plavix (#3 at $3.8 billion);
In 2012: Lexapro, Avandia, Singulair, Zometa, Diovan, Crestor, and Symbicort.

Yeah, some gift to the elderly huh. Don’t you know the advertising is going to be fierce too, and targeted, to keep seniors asking for those, and doctors prescribing them.

I’d be tired…if I wasn’t so DAMN MAD!!