Drug Firms Freaking Out Over Expiring Patents

from the live-by-the-patent... dept

Thu, Mar 10th 2011 4:11am — Mike Masnick

Glyn Moody points us to a discussion about how the big pharma firms are freaking out because their key patents are expiring, and they've failed to develop any new patentable drugs in a while. This is leading the usual patent supporters to worry and fret. Of course, the whole thing is backwards. As Moody points out, expiring patents should be a cause for celebration, not dismay. It means the public is getting access to all sorts of important medicines at much more reasonable prices. That's good news.

The real issue here is that for years patents massively distorted the healthcare market. It hasn't been about keeping people healthy at all. It's been about finding patentable drugs to extract monopoly rents (often at the expense of actually keeping people healthy). Perhaps, if we can get past this silly and short-sighted focus on patentable medicine as being the key component of healthcare, we can start seeing smarter companies develop smarter business models that actually align interests: firms that recognize there's tremendous value in actually keeping people healthy, rather than trying to sell them a tiny pill.

If you start looking at the economic research behind healthcare, you begin to realize that the economic incentives around healthcare are totally screwed up. The reports have shown that keeping people healthy for longer contributes billions, if not trillions to the economy. If firms can't figure out how to profit from keeping people healthy, they're not paying attention. But that's never been the focus of our healthcare policy, and it's a shame. If today's drug companies are felled by their overreliance on patents, perhaps we can finally move on to rethinking healthcare towards making people healthy and improving the economy at the same time... rather than the current structure that appears to do neither of those things all too often.

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Filed Under: business models, drugs, health care, healthcare, patents, pharma

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Planespotter (profile), 10 Mar 2011 @ 4:44am

$10 billion a year! for one drug! Am I supposed to feel sorry for Pfizer? Doubtful seeing as they will be mothballing the site near me in the next two years with 2500 Pfizer employees and a further 3-4000 contractors/agency staff going as well.

So they didn't innovate in the good times, now the bad times are coming and they have nothing new to put on the shelf, ho hum ain't life a bitch!
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Anonymous Coward, 10 Mar 2011 @ 4:55am

"...the big pharma firms are freaking out because their key patents are expiring, and they've failed to develop any new patentable drugs in a while."

Well, doesn't that say something about patents? If those "key patents" were doing what they were supposed to do (promote the progress of science), wouldn't that have lead to more innovation, more "inventions" and (unfortunately) more patents?
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theskyrider, 10 Mar 2011 @ 5:03am

Extend them?
Won't be long before drug companies lobby Congress to extend patents like they did copyrights. 75 years? Not so bad in the scheme of things.

Of course, the true conspiracy theorists have already watched Johnny Mnemonic. (past the flashy graphics and Keanu Reeves you have at the core a company that makes billions treating the symptoms of a disease when they have the cure locked up...because it will only make them millions.)
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Anonymous Coward, 10 Mar 2011 @ 5:18am

Quote:

Wilson writes "consumers should see a financial benefit as lower-cost generics replace the expensive elite drugs, but may suffer in the long term if companies reduce research and do not produce new drugs that meet the public's needs."

Source: Patentlyo: Patent Woes Threaten Drug Firms (Posted on Mar 07, 2011 at 12:41 PM)

They are already not meeting the public needs, what is the NY Times talking about?

They didn't produce anything new and are worried about their cash flow?

Further, those companies are not even the principal driver of drug discovery as most of the job is done by universities around the world.

Further in what world does it make sense to limit the production of something to only one company that doesn't have the capabilities to serve the whole market and makes less in net revenues than the entire market would have made and sold?
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Anonymous Coward, 10 Mar 2011 @ 5:21am

When does the patent on Nexium expire? $6.80 per pill is a bit painful. I can't imagine being in the position of having to pay for meds that cost $50 a pill, but i know they are out there. Those and others that are even higher priced.
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James (profile), 10 Mar 2011 @ 5:29am

I just hope they don't mickey mouse patent law and start a never ending succession line of extensions like they do with copyright law.
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Cloksin (profile), 10 Mar 2011 @ 5:35am

How is it a loss??
A loss?? Really?? They're not losing any money, its just that the amount of money they're taking in is being reduced, they will still be making money on the drugs, they just won't be able to charge ridiculous prices for them. I have a hard time feeling sorry for a mega company like this that wants to complain because they're free ride has come to an end.

I understand that it is incredibly difficult and expensive to bring a drug to market, with all the tests and trials that are required the patent's lifespan is half over before they even start clinical trials. But these companies need to stop trying to make all that research money back in the first year the drug hits the market. If they've really created a drug that is beneficial, then even when the patent expires and generics hit the market the drug will sell sell, create a profit flow for the company. So they are making 10 billion a year on one drug, but do they really need to line the walls of their corporate offices with gold?

I think the "war on drugs" needs to refocus its attention and start targeting these pharma companies, these guys are the real crooks.
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DearMrMiller (profile), 10 Mar 2011 @ 5:42am

Thinking...
I like the mental reversal in regards to health care keeping a population healthy results in more earnings. For whom remains to be seen but I've never thought of it that way.

They've had their windfall from findings that 50% of the population had some sort of psychological disorder and consequently needed some pharmaceutical to treat their problem. They are allowed to advertise on television which to me is ethically problematic. They've grown tremendously in the past couple decades due to all of this and now the market is heading rightly for a 'correction'. What more to do they want? F'em.
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Planespotter (profile), 10 Mar 2011 @ 5:44am

Re: How is it a loss??
ooh, ooh! I've got an idea, if we legalise drugs we could get Big Pharma to make them, we could then regulate them and tax them... win, win? We get more tax revenue, we provide Big Pharma with a never ending revenue stream (+ the initiative to become innovative in the recreational drugs market) and we could probably put an end to a large percentage of drug related crime!
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DearMrMiller (profile), 10 Mar 2011 @ 5:45am

Re: Thinking...
Furthermore I think this is a case where patent expiration will cause innovation... obviously unbridled growth hasn't done much for the industry... so let's get back to actually creating things people need.
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abc gum, 10 Mar 2011 @ 6:05am

In the US health care system, one would assume that it is less expensive if the ailing would just shutup and die quickly.
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NullOp, 10 Mar 2011 @ 6:06am

Money money money money money money.....
Big Pharma worried about patents expiring.....good! The ONLY goal Big Pharma EVER had is to make OBSCENE profits! They have done everything possible to rob people on the basis of their health status. They have constantly sold the lie "...we have to recoup development costs". Sure, it's partially true but did you really have to also steal 10 Billion dollars doing it? I really don't know why drug cost are not capped in the US. Oh, that's right, Big Pharma owns congress. Which all links back to the idea of keeping all industry reps out of congress. Out congress DOES NOT need to be advised by anyone who stands to make even one penny on the outcome of a decision. Big Pharma especially should not court congress with their lies and self-serving tripe.
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Thomas (profile), 10 Mar 2011 @ 6:07am

Big Pharma.
has never been about keeping people healthy; it is totally about making the maximum profit. If the pharma companies would much much rather earn $ 20 million helping 100,000 people rather than earn $ 10 million helping 500,000 people. A lot of the research money for the drugs comes from the federal government, so how do they justify their obscene profits? The pharma companies and the health care industry are what makes our health care system so expensive and so bad at keeping people alive and healthy.
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abc gum, 10 Mar 2011 @ 6:09am

Re: Money money money money money money.....
You forgot the stuffing pof ills down the throats of those who do not need it.
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Joe Generic, 10 Mar 2011 @ 6:19am

Color me ignorant, but just because the patent expires, doesn't mean that the brand ceases to exist. Can't they just find a way to spin off some of their own production of the drug for sale as a generic? Or even just drop the price of the brand, and market it based on quality, name, etc.

Heck, hasn't that been done before?
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Anonymous Coward, 10 Mar 2011 @ 6:24am

The real issue here is that for years patents massively distorted the healthcare market.

Massively distorts? I am guessing this is opinion instead of fact, right?

You don't consider that the lack of patents might mean that the medications would have never been developed in the first place (or certainly not as quickly) which would have had amore significant effect on the health market.

But hey, carry on with your one sides misrepresentations :)
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Chuck Norris' Enemy (deceased) (profile), 10 Mar 2011 @ 6:24am

New formula
They should just add 10mg of aspirin and call it a new drug. It has worked for them all these years.
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Deirdre (profile), 10 Mar 2011 @ 6:38am

I'll never forget checking up on a new medication that I had been placed on and discovering (on the internet)that the company was paying doctors $100 per patient up to a certain number of patients to put people on the drug. That was in the late 90's. I immediately asked for something with a generic equivalent-- especially since the new drug had a very weird side effect involving dropping my body temperature.
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sam sin, 10 Mar 2011 @ 6:48am

exactly the same as the copyright industries. why adapt? why make something new? if these companies can continue to rake in mega bucks off of an old product, after giving incentives to politicians and law makers of course, to back them by preventing anyone else from producing that product, why the hell would they want to make anything new? they sure ain't interested in how the very people they rely on feel. nor are they interested in whether those same people can afford the drugs or not, or whether they continue to live or not. money and control are all they are worried about keeping. sound familiar?
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Anonymous Coward, 10 Mar 2011 @ 6:49am

"expiring patents should be a cause for celebration, not dismay. It means the public is getting access to all sorts of important medicines at much more reasonable prices. That's good news"

What? That is the exact opposite of what techdirt has been saying for years. The message that techdirt sends on a regular basis is that patents are written such that they cannot be interpreted by anyone. Thus expiring patents are worthless. It is nice to see techdirt recognize that some patents really do teach something and really do benefit society when they expire.
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Jim, 10 Mar 2011 @ 6:54am

Drug Costs
I worked in the medical device industry for a number of years. You have NO idea how much time, effort and $$$ it takes to bring a medical device or drug to market. The cost of development, clinical trials and regulatory approval is enormous. One of the reasons I left the field is the amount of overhead associated with the regulatory side of bringing something to market. I was doing more work to satisfy regulatory documentation than I did doing development. It took over 10 years to bring the device I was working on to market and there were over 100 people working on it before it moved to production.

Add in the cost of the majority of things that fail or that are abandoned because they will not be profitable to bring to market and the costs to a company escalate.

FWIW, I haven't worked in that field for over 15 years...
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DH's Love Child (profile), 10 Mar 2011 @ 6:58am

Re:
You don't consider that the lack of patents might mean that the medications would have never been developed in the first place (or certainly not as quickly) which would have had amore significant effect on the health market.

Citation needed.

Actually, Mike has provided ample evidence in studies that patents have hindered the proliferation of new drugs.

Until I see a filing from a drug company that shows that they actually spend more on R&D than on Marketing, I have NO sympathy for them.
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chris (profile), 10 Mar 2011 @ 7:07am

Re:
In the US health care system, one would assume that it is less expensive if the ailing would just shutup and die quickly.

less expensive for whom?

the problem with health care in the US is that the people who provide care (doctors, hospitals, drug companies) want to make lots of money, while the people who pay for care (insurance companies, government, consumers) don't want to pay high prices.

so dying quickly benefits those who pay for care, but those who provide care would rather you live a long and painfully on life support.
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jilocasin (profile), 10 Mar 2011 @ 7:09am

Pharma incentives are completely backwards.
The way things are, the incentives for Pharma are completely backwards to what 'sane' people would think.

Ex:
From least to most important to a healthcare company

Vaccine: lowest payback
Pro: everyone gets a shot
Con: That's all they need

Cure: second lowest
Pro: when they were sick they needed medicine.
Con: only people sick with this illness need the cure
once they get the cure they aren't customers anymore

Treatment: best
Pro: people who need it will need it forever (lifetime customer), if it's life threatening then we can charge outrageous prices (it's their money or their life)
Con: not everyone might have this illness. So if it's not life threatening, it should be vague so that we can say it works for the largest number of people.

Why should they work to find a cure, or heaven forbid a vaccine, for cancer or diabetes, or any of the other ills of modern society. A treatment is so much more profitable.

Even then, there are only so many people with cancer, etc. Now a 'lifestyle drug', there's something we can get everyone interested in.... just think of the money.

Of course failing that, we can just make up treatable illnesses like 'creepy ants crawling leg syndrome' or a nebulous mental illness that a majority of the population suffers from (and didn't even know about before we told them of our drug to treat it).

If you think I'm making this up then you haven't been paying attention. They've gotten otherwise normal rambunctious children 'diagnosed' as ADD just so they they could push their 'treatment' (a.k.a. drugs) to a whole new class of customer.
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Anonymous Coward, 10 Mar 2011 @ 7:15am

Re: Re:
Mike does that by ignoring everything that leads up to the patenting of the medicine, and concentrates only on the resulting market. It is remarkably similar to his too narrow attention on the "marginal costs" part of music distrubtion, without considering how you got there in the first place.

When you consider it takes years of research, testing, and development to bring a medication to market, it is amazing any of this gets done at all. Drug companies are putting hundreds of millions of dollars on the table, and are doing so at risk, in order to make the return on the other side. The patent time period (which is incredibly short, in real terms) allows them to make back and profit from their research and development. Do you honestly think anyone would invest the type of money they are investing to make the return levels that would come from competing with generic drug makers who have little research overhead, and similar production costs?

The medicines might get developed over time, but the comparatively sort patent time is a pretty good trade to get the research moving forward more quickly, to keep the investments in research in place, and to encourage companies to actually go through all the testing and legal risks that come with bringing a new medicines to market.
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weneedhelp (profile), 10 Mar 2011 @ 7:18am

Re:
When I worked for a sound company a drug whore company spent over a million dollars to provide a sound system with headphones to each station in their multi-million dollar gym. And that was just one location.
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The eejit (profile), 10 Mar 2011 @ 7:20am

Re: Drug Costs
Fair enough, but I have an interesting link for you, where a generic drug just got monopolised and had it's cost to the US public go up by between 7,500% and 15,000%.

Yes, you saw that right, 15,000%.
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The eejit (profile), 10 Mar 2011 @ 7:21am

Re: Re: Drug Costs
Goddamn it, I hyperlink-fail.
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M. HIlton, 10 Mar 2011 @ 7:28am

When a patent on a drug expires, the drug companies usually now just go to court to prevent other companies from making generics. It's called "pay for delay" and the courts usually grant them.
http://www.ftc.gov/opa/reporter/payfordelay.shtm

So the issue isn't the patents expiring, really-it's really how many of the drug companies are going to delay generics from being developed? All of them.
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Jake, 10 Mar 2011 @ 7:30am

Recycled Rx
All they need to do is find another use for their drug at a different dosage. Rename and re-patent. Isn't that what happened when Proscar became Propecia?
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Anonymous Coward, 10 Mar 2011 @ 7:51am

Re:
Go back to using the belladonna derived medication Donnatal.
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Michial Thompson, 10 Mar 2011 @ 7:55am

Re: Drug Costs
Jim;

Haven't you figured out yet that little mikee and his worshippers couldn't give a rats ass about R&D, and production and development costs... Thos really don't count, all that really matters is how much it takes to copy something from someone else. Hell they can't even figure out how much datacenters cost even though little mikee has to pay to host his server too.

It's all about what they can take for free and how they are oh so screwed over by copyright and patents etc...

If even ONE of them actually PRODUCED anything they might learn the costs involved an why "finding other models" won't work unless you like the soup kitchens
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Thwacht (profile), 10 Mar 2011 @ 7:56am

Re:
I feel your pain. Our Ann Arbor home value totally tanked when Pfizer shut down and left town. Alas, poor drug companies. Once humankind finally mastered boner-pill technology, what's left?
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techinabox (profile), 10 Mar 2011 @ 7:58am

From the NY Times Article:
Francis S. Collins, director of the National Institutes of Health, recently proposed a billion-dollar drug development center at the agency.

�We seem to have a systemic problem here,� Dr. Collins said, adding that government research efforts were intended to feed the private sector, not compete with it.

Excuse me?
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Anonymous Coward, 10 Mar 2011 @ 8:11am

Re: Re: Drug Costs
You hit it. Mike has deluded pretty much everyone into looking only at "marginal costs", which never admitting that the marginal costs on anything are often the very narrow end of the wedge.

Most drugs are actually fairly simple to make once you know how. The actual production of a single dose isn't specifically that expensive. However, knowing what combinations work, knowing the methods to combine the ingredients, how to filter them, how to purify them, how to get them into the right state, how to control their release into the bloodstream... all of those incredibly expensive things have to be paid for. Then there are the legal ramifications, the liability created in putting the drug on the market at all. The risks must be covered somehow.

By narrowly focusing only on selected parts of the process, Mike has been able to create a sort of cult like following where people ignore the bigger picture and focus on a single point in any given process. Inside those narrow confines, he is often right, but taken in the larger picture, he is incredibly wrong.

I have never once seen Mike explain how the development of medicine would be speeded up by eliminating patents. He only focuses on the apparent harm done to people who are trying to glom onto someone else's discovery and re-package for profit (calling it innovation, natch!).

It's a techdirt fairy tale, retold daily.
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Anonymous Coward, 10 Mar 2011 @ 8:18am

Of course the drug companies are freaking out about their patents going away, what do you expect? This isn't anything new, but some big boys are being hit (including the biggest selling drug in the world.)

I fail to understand why people think drug companies should be concerned with all the problems of the health care environment. Do hospitals worry or try to change how drug companies develop drugs? Do doctors concern themselves with how ambulance companies respond to calls? They are drug companies, they do their part and they worry about their part.

Overall health care involves many moving parts, the payor, the provider, the drug companies, the diagnostics and it goes on and on.

Can things be fixed? Of course, but to fix things you need to have a much broader conversation.

Want to improve health in America? Blame the sick. Ban smoking and fat people and our health will improve more than any doctor or drug can help you with.

Put health under govt. control toally (as it controls it now through Medicare and Medicaid) and you will see how quickly things go south.

For the record, I totally support generic drugs, once something goes off patent, you would be nuts to buy a branded drug, as long as it is a true generic.
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ethorad (profile), 10 Mar 2011 @ 8:25am

Re: Re: How is it a loss??
Plus if Big Pharma patents crack, I'm sure they'll be a lot more vigorous in hunting down users who aren't using the official branded version.

Set a drug dealer to catch a drug dealer ...
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Jay (profile), 10 Mar 2011 @ 8:33am

Re: Re: Re:
I want to make sure that we're on the same page before I go off...

You want me to feel sorry for Pfizer so that they can make obscene monopoly rents and control drugs that can help keep people alive.

You want me to believe that this doesn't have a downfall?

You want me to believe that because a patent allows one type of research, consumers can't make a decision from the generics?

...

All this leads to profit?

I'm about... (>years of research, testing, and development to bring a medication to market

Once a compound is formed, that knowledge benefits everyone in the form of allowing various forms of making newer drugs. Once you know the synthesis of a drug, you can build off of that. And the beneficial use of having consumer choice is ignored in this statement for some supposed belief that the fixed costs in all this = better research.

comparatively sort[sic] patent time is a pretty good trade to get the research moving forward more quickly

I laughed. Not only does this not pay attention to how ridiculous patent law has gotten, it also seems to believe that Big Pharma is doing some good in the community. This is not the case. India is hit with this from quite a few points to make higher rents on pharmaceuticals.

So if this is causing deaths in the fact that NO ONE can afford these medicines, then your entire "for profit" position is morally bankrupt.

What we actually need is compertition. What we need is for people to understand that those legal risks aren't because of some offensive need to get paid, but to actually help people and avoid the factory from blowing up from getting the formula wrong.

Think of the children...
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Jay (profile), 10 Mar 2011 @ 8:38am

Re: Re: Re: Drug Costs
"I have never once seen Mike explain how the development of medicine would be speeded up by eliminating patents. He only focuses on the apparent harm done to people who are trying to glom onto someone else's discovery and re-package for profit (calling it innovation, natch!). "

A world without patents would be a world of experimentation.

Basically, as soon as a drug is released, someone else would take it and try a different way to do it, creating something new.

We kind of call that stuff innovation but it seems you only think about the smaller picture of who's getting paid for it.
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Jay (profile), 10 Mar 2011 @ 8:39am

Re: Pharma incentives are completely backwards.
Don't get me started on the new DSM-V...
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Anonymous Coward, 10 Mar 2011 @ 8:44am

Re: Re: Drug Costs
In your anger, you seem to have missed that several of us do produce things.
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Anonymous Coward, 10 Mar 2011 @ 9:00am

Re:
exactly the same as the copyright industries. why adapt? why make something new?

Because no gravy train goes on forever. It's a pity that big pharma and big media are having to learn that the hard way. They chose short-term profit over long-term sustainability, and now their decisions are catching up to them.
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Anonymous Coward, 10 Mar 2011 @ 9:01am

Thanks for moderating my comments, yet again.
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Anonymous Coward, 10 Mar 2011 @ 9:03am

Re:
Then the funeral homes would get all that money!
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Jim, 10 Mar 2011 @ 9:05am

Re: Re: Re: Re: Drug Costs
>>Basically, as soon as a drug is released, someone else would take it and try a different way to do it, creating something new.

Let me get this straight. A drug company that spends many years developing a drug and marketing it publishes its formulation. Another company then uses that formulation to create a new product in a fraction of the time and a fraction of the cost. And the incentive for the first company to produce another product is...???

Seems to me the first company is the one innovating and spending big bucks to do it. The second company is leveraging the development costs of the first one to provide marginal benefits. That's not innovation by my definition. It's closer to a non-symbiotic parasite.

Don't get me wrong, I don't condone patent extensions or long patent periods that violate the spirit of giving the public a benefit but there has to be a benefit to taking on the initial risk. If there is a better way than the patent system then present it and put it into practice. I haven't seen an alternative put into practice that works.
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Ron Rezendes (profile), 10 Mar 2011 @ 9:12am

Re: Re: Re:
"Drug companies are putting hundreds of millions of dollars on the table, and are doing so at risk, in order to make the return on the other side."

"Do you honestly think anyone would invest the type of money they are investing to make the return levels that would come from competing with generic drug makers who have little research overhead, and similar production costs?"

Ummm...those millions of dollars are usually mine since much of the funding comes from MY Federal Gov't who gets this money from my taxes.
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Anonymous Coward, 10 Mar 2011 @ 9:20am

Re:
Want to improve health in America? Blame the sick. Ban smoking and fat people and our health will improve more than any doctor or drug can help you with.

"Fat people" is not a bannable concept, barring a 1984 scenario where everyone is monitored by the government and forced to exercise daily. Furthermore, given that other addictive drugs are still available in this country despite the government's best efforts, I'm a bit skeptical of the effectiveness of a cigarette ban.

Put health under govt. control toally (as it controls it now through Medicare and Medicaid) and you will see how quickly things go south.

Cognitive dissonance: A statement that the government should control health, followed by a statement that the government should not control health.
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Anonymous Coward, 10 Mar 2011 @ 9:21am

From the link

"�We seem to have a systemic problem here,� Dr. Collins said, adding that government research efforts were intended to feed the private sector, not compete with it. "

This is a problem with this country and its mentality. It's mentality isn't about helping the general public, it's about having government funded research feed the private sector that funds political campaigns. Helping the public is only a secondary consideration if even a consideration at all.
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Anonymous Coward, 10 Mar 2011 @ 9:22am

Re:
Exactly, that's just their mentality. It's all about profits, what's best for the general public isn't even a concern.
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Anonymous Coward, 10 Mar 2011 @ 10:00am

Re: Re: Drug Costs
link:

http://www.boston.com/news/local/massachusetts/articles/2011/03/10/preemie_birth_preventive _spikes_from_10_to_1500/
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Anonymous Coward, 10 Mar 2011 @ 10:02am

Re: Re: Re: Re: Re: Drug Costs
I concur that some sort of patent protection on drugs, etc are acceptable, but for a drug company to begin declaring the end of their world when their patent expires is the issue with the original article from Mike. I believe what most people are lashing out at are that the drug/pharma companies will most likely try to extend their patent protections instead of innovating. And I do concur that there should be some streamlining of the regulatory process, but you still need to have enough of a process to make sure that the product doesn't kill anyone and is accurately described and tested.
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Jay (profile), 10 Mar 2011 @ 10:22am

Re: Re: Re: Re: Re: Drug Costs
I forget where I read it, but smaller businesses do ~40% of the R&D to create newer drugs. Larger companies spend more money on marketing, which causes patented drugs to be so much more expensive.

Really, what happens is that scientists have just as much of an ego as anyone else. The race would be for a science group to put their stamp and say "I did it first". As it's reasoned out, this acts as a regulatory (albeit inexpensive) check. Larger companies have a drug and can market it for a higher price while the smaller companies make variations of the drug. Think about how we have aspirin and anacin. Now, if you go to Wal-mart and see aspirin for $5, the anacin may be $3. In order for aspirin to make money, they would HAVE to lower their price.

Right now, the generics are legally blocked from entering the market, which allows others to form monopoly rents to devestating effect.

So people shop around for cheap drug. Even to their cousins in the north
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Anonymous Coward, 10 Mar 2011 @ 10:34am

Re:
Or Priloec, which is over the counter and (if memory serves) an isomer of the same drug with the same effect.
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Anonymous Coward, 10 Mar 2011 @ 10:36am

Re: Re: Thinking...
unbridled growth hasn't done much for the industry... That's because unbridled growth is also known as cancer.
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JEDIDIAH, 10 Mar 2011 @ 10:41am

The old cow is dead. Didn't bother raise a new one.
Patent encumbered drugs are a cash cow.

That's because they have a monopoly and they can set any price they like. Once their patent expires, they have to compete on the same shelf with some generic maker that sells their product for $4 rather than $50.

Of course they want their cash cow back.

Being good American companies, they didn't bother to plan for the future and only focused on the quarterly numbers. So they never accounted for the inevitable day when their cash cows died.
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JEDIDIAH, 10 Mar 2011 @ 10:45am

Cry me a river...
I have personally payed $5000 of this R&D cost myself for a SINGLE drug.

So cry me a river if your monopoly expired.

You had PLENTY of time to exploit it and pay for new R&D.
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Anonymous Coward, 10 Mar 2011 @ 11:04am

Re: Re: Re:
Good little troll. Comments like this show that at least one middle manager at some big-name pharma company is upset that his job might not be as morally upright as he likes to imagine, right around the time he tries to steamroll the issue of massive human death and suffering by claiming that drug companies have a right to monopolize chemical compounds which they may have "discovered" but certainly didn't "create" -- the laws of physics did that.

This is the same kind of mind who would like to patent numbers or mathematical equations or laws of physics if they thought they could make a buck off of it.

Sickening, reprehensible, and morally bankrupt: my only comfort is that those unfortunate enough to be near you in your daily life are probably as disgusted by you as I am, even if they have to hide it whereas I do not.
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Anonymous Coward, 10 Mar 2011 @ 11:12am

Re:
Want to improve health in America? Blame the sick.
I'm not going to apologize for this.
FUCK YOU.
I'm one of a legion of people who have genetic conditions that can do NOTHING about them. I'd love nothing more than to not have to worry about finding insurance to cover the $40,000 of medication I'll burn through in a year, and never mind there's only one manufacturer for the drug that keeps me alive.
My two major genetic defects have no known source and feed into one another in such a way that should the one that actually has a treatment gets out of control, the second untreatable one will kill me.
I wish to god for a cure that will never ever come because the conditions are rare enough that there's not enough profit in pursuing it despite the research being underwritten by my tax dollars.
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Anonymous Coward, 10 Mar 2011 @ 11:22am

Re: Re: Re: Drug Costs
And of course any give drug company did ALL that R&D themselves; they had to invent GLASS before they could even store their reagents -- before that they were using their hands to hold the chemicals! Oh, and they had to invent computers, paper, ink, etc. -- because they never "glom[med] onto someone else's discovery"; they were BONA FIDE AMERICAN COMPANIES who INVENT EVERYTHING FROM SCRATCH -- they even invented FIRE, dammit, and that was after they willed themselves into existence; they never "stole" their own lives from their mothers' unwilling bodies, that would be "repackage[ing] for profit"!

Jesus Christ, you folks disgust me; you think that those companies invented everything they sell single handed? What the hell are you smoking? Most of the time people go to other worlds; you're in another damned universe.

Even if they had stomached the full R&D cost (oh, and that patent-related costs had nothing to do with the cost of , delivering the drug), and if you somehow include sales as a form of "R&D" which you apparently think makes sense, that would still imply that the drug prices should be proportional to the actual cost; that is, they should earn back their R&D costs, plus a tidy profit -- tidy, not obscene, not grotesque, not ludicrous.

So can you even sensibly begin to discuss the asked price of the drugs in question in the context of their actual production cost, in light of the 25 year window we're talking about here?

Oh, and while we're at it, can you explain why it's okay to let people die for the sake of profit, or can you justify defrauding people by telling them (or paying doctors to tell them) they need drugs which they actually do not (and are damned expensive) and probably have harmful side effects?

Probably not; I get the impression you'll just ignore this post like you ignore anything else you don't like to acknowledge or can't readily argue against.

What a worthless waste of oxygen talking to you would be.
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Mike Masnick (profile), 10 Mar 2011 @ 12:02pm

Re:
What? That is the exact opposite of what techdirt has been saying for years. The message that techdirt sends on a regular basis is that patents are written such that they cannot be interpreted by anyone. Thus expiring patents are worthless. It is nice to see techdirt recognize that some patents really do teach something and really do benefit society when they expire.

Wow. I don't think you could have misrepresented me any more than you did here. Nowhere did I say that the expiration of the patent meant that *the patent* taught others how to make the drug in question. Just that the expiration stops the blocking of others building a competitive market.

Troll on.
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Mike Masnick (profile), 10 Mar 2011 @ 12:06pm

Re: Drug Costs
You have NO idea how much time, effort and $$$ it takes to bring a medical device or drug to market. The cost of development, clinical trials and regulatory approval is enormous.

Actually quite familiar with this. Not sure what that has to do with patents. Did you miss the point where I was talking about how much more money could be made?

Right.

Also, a couple of pointers on the "costs." First the actual costs are exaggerated tremendously. Merrill Goozner's analysis debunks the whole $800 million pill thing, and shows that it's really more like $40 million. $40 million is still a lot, but just get things in order.

Second, since much of it is clinical trials which is a regulatory issue, we should be looking for ways to fix that from the regulatory side, rather than dumping it all on the drug makers.

Finally, if you look at markets where drugs were not patentable, they did quite well, and were quite innovative before the patent folks came in and demanded patents (often killing local pharma industries).
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Mike Masnick (profile), 10 Mar 2011 @ 12:10pm

Re: Re: Re: Re: Re: Drug Costs
Let me get this straight. A drug company that spends many years developing a drug and marketing it publishes its formulation. Another company then uses that formulation to create a new product in a fraction of the time and a fraction of the cost. And the incentive for the first company to produce another product is...???

Actually there is research here that we've written about. The first player in the market for drugs commands a HUGE premium, even when there is generic competition. Don't knock the first mover/branding advantage.
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WHOAMI, 10 Mar 2011 @ 12:33pm

Patents
Thank god! I read patients instead of patents
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Lawrence D'Oliveiro, 10 Mar 2011 @ 12:35pm

Re: You don't consider that the lack of patents might mean that the medications would have never been developed in the first place
Here�s the proof: they had the patents all these years, and yet it hasn�t encouraged the creation of many new drugs. If it did, they would have lots of new patents to replace the old ones, and we wouldn�t be having this Techdirt item.

But it didn�t, and they don�t, and we do.

QED.
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Anonymous Coward, 10 Mar 2011 @ 1:06pm

Re: Re:
How is that trolling?

My interpretation is perfectly fair, nowhere did you say *how* the public would get 'access to all sorts of important medicines at much more reasonable prices'. Do you really think that new competitors in the market are now going to start from scratch to develop these already existing medicines? They are not going to reinvent the wheel, they are going to use resources that are already available, like the expired patents.
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The eejit (profile), 10 Mar 2011 @ 1:16pm

Re: Re: Re: Re: Drug Costs
er, the pharma costs are considerably exaggerated. IF it costs a doctor 30k to prescribe a drug for one year, and it costs, say, $100m for full R&D costs, unless the drug is a pretty uncommon one for what it treats, then it'll recoup those costs pretty quickly.
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Paula, 10 Mar 2011 @ 2:37pm

Re:
I take medication for my migraines. My insurance provider restricts me to 9 tablets a month; if I had to pay the full prescription cost for those 9 tablets, it works out to just over $30/tab. Fortunately for me, that is not the case. But I definitely feel for those who don't have enough or no insurance.
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Jim, 10 Mar 2011 @ 2:37pm

Re: Re: Re: Re: Drug Costs
Inventing glass, computers, paper and computers? uh, did someone say strawman? Some other entrepreneur innovated, developed and sold those for a profit...because they COULD MAKE A PROFIT DOING IT. And apparently drug companies decided to pay a negotiated price instead producing it themselves. Or maybe they stole them to inflate their profit margins even more? Probably.

As for how much is a tidy profit for any given product why don't we just let you decide what that is? I'm sure you'll be fair and unbiased. Everyone will be happy with what they receive and be motivated to put that money at risk again to produce a sure-fire cure for cancer on the first try.

>>What a worthless waste of oxygen talking to you would be.
And yet you did. Oxygen is free anyway...
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Jim, 10 Mar 2011 @ 2:43pm

Re: Re: Re: Drug Costs
>>But recently, KV Pharmaceutical of suburban St.Louis won government approval to exclusively sell the drug, known as Makena (Mah-KEE'-Nah). No one could have foreseen that coming... lol
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Anonymous Coward, 10 Mar 2011 @ 3:17pm

Re: Re: Re:
I not only believe I know people would invest, because 80% of research done in drug discovery is not actually done in big companies, the break throughs are all done by universities with federal funding.

Also you wouldn't believe the number of people who needs a job right now any job, they could all benefit from unencumbered production channels.
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Anonymous Coward, 10 Mar 2011 @ 3:21pm

Re: Re: Re: Drug Costs
Obviously you are ignorant of history.

Read about penicillin(the first wonder drug) and how it was discovered and developed.

Also most research is done in universities and not by big companies they just rip what others sowed, they are a cancer inside society.
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Anonymous Coward, 10 Mar 2011 @ 3:27pm

Re:
Quote:

Put health under govt. control toally (as it controls it now through Medicare and Medicaid) and you will see how quickly things go south.

Well, only in the U.S. because in Canada people love it, in the U.K. they also love it, in Japan, in Sweden, in Finland, in France and in a lot of other places, how they can do it and Americans can't? is the rest of the world more capable?

A heart surgery to implant a stench cost $10.000 in some countries, in the U.S. it costs $140.000 dollars WTF!?

Explain why others it is so cheap outside the U.S. that insurers are paying the cost of international travel, first class and still paying less.
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Ron Rezendes (profile), 10 Mar 2011 @ 4:51pm

Re: Re: Re: Re: Drug Costs
Please don't tell me these guys KV Pharma now have a monopoly on anything! I honestly fear for people's lives at this point.
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Anonymous Coward, 10 Mar 2011 @ 6:48pm

Re: Re: Drug Costs
But what about the sunk R&D costs for all the formulations that did not work?
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G Thompson (profile), 11 Mar 2011 @ 1:04am

Re: Re: Pharma incentives are completely backwards.
why have you got one of those new 'addictions' *eye roll*

There will be an App for that...

oops wrong story..

I mean there will be a "high priced Uni invented stolen by Pharma Inc sold for squillions" drug for that
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Jose_X, 11 Mar 2011 @ 7:16am

Re: Re: Re: Re:
I agree that the basic science from universities model is valuable.

You can't efficiently throw extra globs of money at a problem to try to force a breakthrough. Breakthroughs happen when many people have time to reflect and when pure accident facilitates a key observation.

And you also don't want a few firms that leverage the public sector and science to run out a bit ahead of others to snatch monopolies.

As for clinical costs, who says we need a monopoly patent grant to fund that? We can have those who want to produce the medicine buy a license to help make back those costs.
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Anonymous Coward, 11 Mar 2011 @ 10:15am

When you start to assume drug companies mean health care, that is dangerous thinking. Not to slam drug companies, but they only play a part in the whole thing, even if it is a big part.

Drug costs consume about 15% of all healthcare dollars spent in the US. You can't fix the system by changing a small part.

Health care in the US is pretty good, you may not like how we pay for it, you may not like limited access, but I wouldn't trade our health care system for any other countries setup.

Drug companies success at drug discovery has pretty much sucked recently, this has been the trend for quite a while, and now the patent chickens are coming home to roost. I am not sure why there has been a lack of success and if anyone tells you they know why, they are lying. Maybe the easy drugs have been discovered, maybe we now have the technology in place that identifies drugs that will harm a certain group of people and those projects get killed now when in the past, they were allowed on the market, who knows.

I will say this though, health care is rationed. In the US, we do that with money. In some countries, they do it with time. We have to have a conversation on what exactly we want our system to provide. The majority of health care dollars is spent in the last years (or weeks and months) of life. Is this appropriate?

Should we spend millions on someone with a rare genetic disease, millions that could care for many "healthy" people? Should we tell the family that sorry, grandpa has to die because this expensive procedure will only give him an additional year of life? Should we tell that young couple that their premature baby won't make it because the costs are too great?

Ask any doctor and they will tell you that fit, non smoking people greatly reduces health care costs. Know what the greatest cost to our health care system is today? ESRD. End Stage Renal Disease. Dialysis. Get rid of fat people and most of that goes away. We are going in the other direction, what does that mean?

So you have to decide what you want out of our system. Drugs produced by pharmaceutical companies have saved more lives than any doctor out there ever will, but drugs are only part of the equation.

We have to decide what we want and how it is delivered.
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Anonymous Coward, 11 Mar 2011 @ 10:25am

"Well, only in the U.S. because in Canada people love it, in the U.K. they also love it, in Japan, in Sweden, in Finland, in France and in a lot of other places, how they can do it and Americans can't? is the rest of the world more capable?"

Why is it that people in Canada and Japan and France and Saudi Arabia fly here when they are faced with serious health concerns?
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Anonymous Coward, 14 Mar 2011 @ 6:25am

Re:
Cause they get a free "grope" on the way in.... and it may be their last.
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Anonymous Coward, 14 Mar 2011 @ 3:44pm

Re: Re: Re: Re: Re: Drug Costs
Check your threading, mate.

This was a reply to #519, not you.

And although sarcastic (I hoped that was obvious... oh well) in nature, the point is that most of the "pro IP" trolls around here seem to think using any pre-existing knowledge is theft -- except when big pharma uses that knowledge to "create" a new drug.

And technically, I didn't talk to you (or the person I was actually directing the comment to); this is typing -- and yes, I meant 'talk' literally in that last sentence.
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Anonymous Coward, 14 Mar 2011 @ 3:45pm

Re: Re: Re: Re: Re: Drug Costs
That was my point in its entirety, actually.

Thanks for reinforcing what I just said...

Is your sarc-dar really that poor?
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