Using Patents To Needlessly Drive Up Healthcare Costs: The Economic Impact Of Evergreening Drugs
from the evergreening-profits dept
One technique in the world of pharma that has started appearing here on Techdirt is "evergreening" -- making small changes to a drug, often about to come off patent, in order to gain a new patent that extends its manufacturer's control over it. The advantages for pharma companies are evident, but what about the public? What economic impact does evergreening have? That's what a fascinating new paper in the open access journal PLoS Medicine seeks to establish:
The researchers identified prescriptions of eight follow-on drugs issued by hospital and community pharmacists in Geneva between 2000 and 2008. To analyze the impact of evergreening strategies on healthcare spending, they calculated the market share score (an indicator of market competitiveness) for all prescriptions of the originally patented (brand) drug, the follow-on drug, and generic versions of the drug. The researchers then used hospital and community databases to analyze the costs of replacing brand and/or follow-on drugs with a corresponding generic drug (when available) under three scenarios (1) replacing all brand drug prescriptions, (2) replacing all follow-on drug prescriptions, and (3) replacing both follow-on and brand prescriptions.
And here's what they found:
Using these methods, the researchers found that over the study period, the number of patients receiving either a brand or follow-on drug increased from 56,686 patients in 2001 to 131,193 patients in 2008. The total cost for all studied drugs was €171.5 million, of which €103.2 million was for brand drugs, €41.1 million was for follow-on drugs, and €27.2 million was for generic drugs. Based on scenario 1 (all brand drugs being replaced by generics) and scenario 2 (all follow-on drugs being replaced by generics), over the study period, the healthcare system could have saved €15.9 million and €14.4 million in extra costs, respectively. The researchers also found some evidence that hospital prescribing patterns (through a restrictive drug formulary [RDF]) influenced prescribing in the community: over the study period, the influence of hospital prescription patterns on the community resulted in an extra cost of €503,600 (mainly attributable to two drugs, esomeprazole and escitalopram). However, this influence also resulted in some savings because of a generic drug listed in the hospital formulary: use of the generic version of the drug cetirizine resulted in savings of €7,700.
Obviously, this is just one study, in one area, although on the plus side it involves quite a long time period, and many patients. Despite its limitations, it nonetheless offers a useful first analysis of the economic impact of evergreening drugs. It's certainly an aspect of drug prescription that hospitals and doctors need to consider. As the study concludes:
Evergreening strategies have been successful in maintaining market share in Geneva, offsetting competition by generics and cost containment policies. Hospitals may be contributing to increased overall healthcare costs by listing follow-on drugs in their RDF. Therefore, healthcare providers and policy makers should be aware of the impact of evergreening strategies.
That suggests we can expect to see many more evergreened drugs in the future as highly-profitable compounds start to come off patent, and pharma companies search for ways of maintaining their high profit levels.
Follow me @glynmoody on Twitter or identi.ca, and on Google+
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: drugs, evergreening, healthcare, patents, pharma
Reader Comments
Subscribe: RSS
View by: Time | Thread
1) stop those in Congress from getting kick-backs from the industries concerned
2) stop those in Congress, when finishing their duties for whatever reason(s) from immediately (if not earlier!) being employed in the respective industries as a way of saying 'thank you for all you did for us, even though it fucked up the systems and the customers'
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re: manufacturing, using, selling, offering to sell, and importing drugs that are not patented
http://en.wikipedia.org/wiki/Paracetamol
Public domain status doesn't stop anyone from making money on a product whether they created it or not.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re: Re: Re:
What kind of business is this anyways, sounds like a scam.
[ link to this | view in chronology ]
Re: Re: Re:
Most of these changes offer no additional benefit to the patient. They are just a small benign formula change in an effort to claim it's "New and Improved" so they can reap the benefits of an extended patent.
I would equate it to changing the height of lettering on a set of radial tires and calling it "New and Improved".
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re:
Pay for Delay
http://www.ftc.gov/opa/reporter/competition/payfordelay.shtml
[ link to this | view in chronology ]
Re:
http://en.wikipedia.org/wiki/Generic_drug
[ link to this | view in chronology ]
Response to: Anonymous Coward on Jul 18th, 2013 @ 5:16am
Nothing, and this is the way things are supposed to be. The patent system was never intended to give you a PERPETUAL monopoly. Patent protection in the US is 20 years, which is one of the longest in the world. How much more of a monopoly do you want?
[ link to this | view in chronology ]
Re: Response to: Anonymous Coward on Jul 18th, 2013 @ 5:16am
[ link to this | view in chronology ]
biological drug
[ link to this | view in chronology ]
Re: biological drug
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
They obviously do not care.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
I find this strange.
IF corp1, makes a drug, it gets the copyrights.
IF' corp2 Uses the basis of this drug and makes a change to it(making it a different Combo drug) they get SUED into the ground.
If corp1 gets to the end of copyright, they can ADD the same change CORP2 was trying, and KEEP the copyrights??
So, we make drug1..(and dont change/add/make better) and wait for the Copyright END, then add enteric coating to make it more digestible and it works better in the lower intestines. AND get a NEW copyright..
AND corp2 Couldnt do it without getting BEAT TO DEATH..
[ link to this | view in chronology ]
If they gave me SUBOXONE on the other hand I'd probably still be working. But Methadone is free and SUBOXONE is over 700 dollars a month which I can afford but I refuse.
[ link to this | view in chronology ]
evergreening patents
[ link to this | view in chronology ]
evergreening patents
[ link to this | view in chronology ]