US, Australia & Canada Decide Screw Over Poor Nations Because Big Pharma's Not Happy With TPP

from the isn't-that-nice dept

With the conclusion of the negotiations for the Trans Pacific Partnership (TPP) agreement now in place, there has been some ridiculous whining from the pharmaceutical industry which got almost everything it wanted in the agreement, but wasn't quite able to get a few things, including a 12 year patent-like exclusivity on biologics. And, because of that hissy fit, apparently, the USTR and its counterparts in Australia and Canada have agreed to help out Big Pharma in another arena. Jamie Love is reporting that this week there's a meeting at the WTO this week to explore granting a special exemption on patent rules for developing nations (i.e., those who often need drugs the most, while also being the least likely to be able to afford them). It's silly to enforce patents in these countries, because doing so would not only lead to almost no business at all, but (more importantly) because lots of people will die or, at the very least, suffer needlessly.

But, because Big Pharma is upset about the TPP, the USTR and others have decided that they "can't" agree to anything that might upset Pharma. Talk about a bunch of captured government officials...

On Friday, 9 October 2015, Ambassador Punke met with representatives from 15 countries (including 5 Ambassadors) from the LDC Group. Ambassador Punke clearly indicated that the US could not agree on an indefinite exemption because certain stakeholders in the United States were quite upset with concessions made by USTR during the final stages of the Trans-Pacific Partnership (TPP). Informed sources noted that the US indicated that "the TPP did not deliver as expected on IP and so we are under a lot of pressure not to give in more on IP."

How far the pharma industry has come from the days when George Merck declared: "We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been."

And, really, how do the folks who work at the USTR sleep at night knowing that they're doing this for no reason other than to help out the profits of a few giant companies at the expense of the public?

Filed Under: developing nations, drug prices, ldc, patents, pharma, pharmaceuticals, tpp, wto

Company Acquires Rights To Drug Used By AIDS/Cancer Patients; Immediately Raises Per Pill Price From Under $14 To $750

from the because-fuck-you,-that's-why dept

When pharmaceutical companies defend outrageously-priced medicines, they often claim these massive profit margins are there to help them recoup the money dumped into research and development. But that has nothing to do with the high prices. R&D costs are consistently lower than companies portray them. The real reason for exorbitant drug prices is a monopoly granted by patents, which lock out all competitors for years. And when the patent nears expiration, pharma companies extend their monopoly by doing questionable things -- like testing high-powered, opiate-based painkillers on children -- just to extend the patent protection for another few months.

None of that, however, explains this: (h/t to Techdirt reader pixelpusher220)

Turing Pharmaceuticals of New York raised the price of Daraprim from $13.50 per pill to $750 per pill last month, shortly after purchasing the rights to the drug from Impax Laboratories. Turing has exclusive rights to market Daraprim (pyrimethamine), on the market since 1953.

Daraprim fights toxoplasmosis, the second most common food-borne disease, which can easily infect people whose immune systems have been weakened by AIDS, chemotherapy or even pregnancy, according to the Centers for Disease Control.

In this case, any research and marketing costs have long since been recouped (or at least amortized). The patents behind the drug -- all granted between 1951 and 1954 -- should be dead. Conveniently for Turing (and other rights holders before it), no company is offering a generic version.

Every time the drug has changed hands (and it's done it more than once), the price has gone up. But no other company has increased the price quite as much as Turing Pharmaceuticals has. Perhaps that's because Turing spent a significant amount of money to acquire an exclusive marketing license, but with none of the attendant patent exclusivity.

Impax Laboratories, Inc. (NASDAQ: IPXL) today announced that it has sold its U.S. rights to the Daraprim brand to Turing Pharmaceuticals AG for approximately $55 million.

Turing, of course, realizes this price jump -- which puts one month's supply in the new vehicle range ($45-50,000) at minimum -- is going to be tough on those expected to pay for it, but claims to have support in place to help absorb some of the ridiculous increase.

A Turing spokesman, Craig Rothenberg, said the company is working with hospitals and providers to get every patient covered. This includes free-of-charge options for uninsured patients and co-pay assistance programs.

This sounds like exemplary altruism in the face of a presumably unavoidable [hah] increase in price. But a closer look at what Turing is actually doing shows the company will be forcing patients to choose from all of two options:

For inpatient procurement, institutions can no longer order from their general wholesaler. Instead, they must set up an account with the Daraprim Direct program. Once enrolled, orders may be placed with the company until 6 pm Monday through Friday and will be delivered the next business weekday, because there is no weekend delivery at this time.

For outpatient procurement, patients can no longer obtain the medication from their community pharmacy. All prescriptions must be transmitted to a single dispensing pharmacy: Walgreens Specialty Pharmacy. Upon insurance verification and co-pay collection, the prescription will be mailed to the patient’s home, and most prescriptions can be mailed overnight.

This presents a problem for hospitals. Although the drug is low-use (it combats the effects of toxoplasmosis -- something that can cause serious issues for those with weakened immune systems, like cancer/HIV patients), it still is needed often enough that the two access routes just aren't enough.

My institution recently encountered a difficult scenario in which pyrimethamine was attempted to be obtained through the Walgreens Specialty Pharmacy. The patient in question was currently homeless, and therefore did not have a home or address to which the medication could be delivered. Additionally, the manufacturer did not yet have a system in place to address the situation.

This could have been extremely problematic, but fortunately, my institution is affiliated with a Walgreens Specialty Pharmacy and contracted to provide bedside delivery to patients prior to discharge. The patient was able to receive the pyrimethamine as an inpatient.

Turing, of course, defends the increased price by claiming the exorbitant profit margin will result in increased R&D. But let's take a closer look at what its spokesman is actually saying.

Rothenberg defended Daraprim's price, saying that the company will use the money it makes from sales to further research treatments for toxoplasmosis.

Translation: this money will be dumped into finding another variation to patent, thus locking out potential competitors and allowing Turing to continue charging whatever it wants for the medication.

They also plan to invest in marketing and education tools to make people more aware of the disease.

Translation: we will market the hell out of this new drug.

This sort of thing isn't exclusive to Turing. It's standard MO for all pharmaceutical companies. Rather than engage in meaningful competition, these companies are awarded lengthy monopolies on drugs and treatments by the US government. Turing is no different than Amedra -- part of the holding company acquired by Turing along with the Daraprim rights. But when Amedra acquired the rights from GlaxoSmithKline, it somehow managed to keep its price hike to a couple of dollars, rather than several hundred.

This huge price jump has more to do with the man running Turing, Martin Shkreli. Shkreli doesn't have a background in pharmaceuticals, but he does know how to run a hedge fund. And he's used this expertise to become highly-unpopular very quickly.

Since founding Turing last year, Shkreli has taken a page from what made Retrophin a high-profile--and controversial--player among small biotech companies. Retrophin's stated goal was ferreting out value in biopharma by acquiring assets with potential in rare and neglected diseases, a process that can mean acquiring an underused drug and jacking up its cost to take advantage of rare disease pricing.

Here's one of the moves Shkreli made as the head of Retrophin.

In September 2014 Retrophin acquired the rights to thiola, a drug used to treat the rare disease cystinuria. It was with Shkreli as CEO that Retrophin introduced a 20-fold price increase for Thiola, despite no additional research and development costs incurred by obtaining these rights.

Turing is basically Retrophin 2.0, or more accurately, Shkreli being Shkreli. Shkreli may have still been helming Retrophin at this point, had his own company not ousted him. In August, his former company also sued him, alleging financial impropriety.

It appears that Shkreli is a bit too comfortable operating in gray areas. The market-related shadiness alleged in the lawsuit appears to be just part of Shkreli's everyday business affairs.

In an uncommon move, Shkreli himself led the Series A financing, and Turing isn't naming any of its other backers, calling them "preeminent institutional equity investors" and leaving it at that. In a filing with the SEC last week, Turing counted 34 individual participants in its funding round but reported raising just $62.7 million.

This reported total of the funding round didn't match the claimed total ($90 million). Shkreli had an answer for the missing funding. And that answer was "Shut up."

A spokesman for the company declined to explain the $27.3 million difference, and further questions about the company's financials were met with a terse email from Shkreli asking FierceBiotech not to contact Turing again.

However, if you do feel like discussing the 5000% increase in Daraprim's price, feel free to take your questions to Shkreli himself, who is surprisingly accessible on Twitter. Just know ahead of time that you're too stupid to understand complicated business stuff, you don't represent anyone worth talking to, "everyone else is doing it," and shut up.

The unasked question has its answer: why did Turning flip the switch on a 5000% price increase? Because it can. And it's not just the people being prescribed Daraprim that will eat the cost. It will be every customer of every health insurer that covers the rest of the cost of these prescriptions. These additional expenses will eventually result in higher health insurance premiums. And while Turing is offering to help out those with little to no insurance, these costs -- whether they're absorbed by health care institutions or the government itself -- will be passed on to the general public as well.

Filed Under: daraprim, drug prices, generics, martin shkreli, monopoly pricing, patents, pharma, pharmaceutical pricing
Companies: turing pharmaceuticals

Could A Hedge Fund Manager Trying To Short Stocks Of Pharma Companies With Bad Patents Derail Patent Reform?

from the that-would-suck dept

A few months ago, we wrote that it looked like much needed patent reform had stalled out in Congress, despite expectations that it would fly through Congress easily this year, having the strong support of both the majority party in Congress and the President. And this year, unlike last year, the trial lawyer lobby wouldn't be able to intervene. Of course, the one big obstacle -- as with every time patent reform is proposed -- would be the pharmaceutical industry. But even that seemed like it shouldn't be a huge problem because nearly all of the (relatively mild and fairly weak) reforms proposed really targeted trollish behavior, using overly broad patents to shake down innovative companies. Whether or not you approve of the way drug companies use patents, the trolling issue is a bit outside of that industry's concern, and thus it was believed that while pharmaceutical companies might whine a little bit, they wouldn't really stand in the way.

Except... something changed. As Julie Samuels explains in a blog post detailing the state of patent reform as it stands today, a Wall Street hedge fund guy got the pharma industry all riled up, by making use of a provision in the previous patent reform law to play some silly Wall Street game:

Enter Kyle Bass. The well-known hedge fund manager’s most recent enterprise involves using the IPR process to challenge weak pharmaceutical patents and then short the stock of the company that owns the patent. The pharmaceutical industry, which relies heavily on patent rights, is far from pleased. And despite the fact that the IPR process contains significant protections for patent holders and the fact that Mr. Bass’ actions can already be addressed by the SEC, the pharmaceutical industry has been able to shoehorn its issue into the larger reform efforts.

Let's unpack that a little. The "IPR" process stands for "inter partes review" and it's a process by which anyone can try to challenge a bad patent, by presenting specific evidence that it shouldn't have been granted because of prior art. This process is somewhat useful in helping to get the Patent Office to toss out some bad patent claims that it never should have approved in the first place. It's a fairly limited process too. You can file for an IPR, but the Patent Trial and Appeal Board (PTAB) will only take up the effort if it decides "there is a reasonable likelihood" that it will invalidate the claims based on the submitted material. In other words, it's a pretty high bar to cross, and anyone filing frivolous IPR claims won't get very far at all.

Now, back to Kyle Bass. He's been making news in the last few months by filing for an IPR against pharma patents, while simultaneously shorting the stock of the pharmaceutical firms that hold the patents. He's set up an entire organization to do this, called the Coalition for Affordable Drugs.

Kyle Bass, head of Hayman Capital Management LP—which made a fortune wagering on the housing bust—is targeting patents that he says have little value other than to drive up prescription drug prices. His new fund bets against companies whose patents it believes are spurious, and invests in those that would profit if the patents are invalidated, said people familiar with the matter.

His latest challenge seeks to employ a relatively new and inexpensive petition process to invalidate a Jazz Pharmaceuticals PLC patent for Xyrem, a narcolepsy drug with sales of $779 million last year, two-thirds of Jazz’s 2014 revenues.

Mr. Bass created the Coalition for Affordable Drugs, an organization that is the lead petitioner in several patent challenges filed with the U.S. Patent and Trademark Office. He says he plans to pursue the cases regardless of share price moves. “We will not settle,” he said in an interview.

The Coalition has been busy of late, filing a whole bunch of IPR petitions against a whole bunch of phamaceutical firms. And, boy, are those pharma firms pissed off. Celgene, for one, has talked about seeking sanctions against Bass, claiming that Bass is using the process as a form of extortion:

Celgene attorneys made this point in a June 3 email to the patent office. But there was more. They also alleged that his coalition threatened to challenge Celgene patents “unless Celgene met their demands.” Those demands weren’t specified, but the email states that “when Celgene did not pay,” the patent challenges were filed, according to the patent office order, which cited the email.

And, using this whole story, to argue that the whole IPR process is a disaster, the pharmaceutical industry is trying to revamp and effectively destroy the entire (important and useful) IPR process.

And while it seems likely that Bass's efforts are much more about enriching himself via the stock shorting than actually making drugs more affordable, arguing that his efforts somehow undermine the entire IPR process is a stretch. Indeed, as noted earlier, there are built-in protections that make it rather inefficient for anyone to really abuse the process the way pharma companies are portraying. Again, the special board in the Patent Office, the PTAB, has the ability to just outright reject any IPR petition it doesn't think has a chance of surviving. And, in fact, a recent report by the Patent Office shows that (1) less than half of all IPR requests result in actual challenges and (2) even then, the vast majority of claims being challenged are actually allowed to stand. As of the end of June of this year, you can see that the PTAB rejects most petitions, many more are "terminated," and of those that go to a full trial, many retain patentable claims that were challenged: Even more to the point, if you look at the total number of claims actually challenged, against those that end up being found unpatentable, it's a fairly tiny number: only 4,225 claims out of were challenged. That's less than 12%. Hell, even if you look at just those claims that the PTAB initiates proceedings on, less than 25% of them are invalidated. In short, the idea that the IPR process is making it easy to simply kill off good patents is not even remotely supportable. Instead, it appears to be doing what it's intended to do: make it more reasonable to help people kill off bad patent claims. If pharma firms are worried about what Bass is doing, it should only be if the patents they have are questionable in the first place. If they're legit, they won't pass the laugh test, and the whole process won't get anywhere.

And yet... because the pharma industry just doesn't like having to deal with Bass at all, it's trying to destroy the whole IPR process, saying that's the only way that it will support the other aspects of patent reform. But undermining IPR would do serious damage to patent reform as a whole, and take away a key tool that actually does work in more quickly invalidating crappy patents. Whether or not you approve of the way in which Bass is doing what he's doing, the process isn't really open to abuse in a manner that should raise any real concern. And, for everyone else, the IPR process remains an important element in stopping abusive patents.

Filed Under: inter partes review, ipr, kyle bass, patent reform, patents, pharma, pharmaceutical industry, ptab, short selling, uspto
Companies: coalition for affordable drugs, hayman capital management

Bosses Of Big Pharma Companies Unable To Deny Australia Being Ripped Off On Drug Costs

from the and-that's-even-before-TPP-is-in-place dept

Here on Techdirt, we often write about the bad behavior of Big Pharma, particularly in terms of how it is one of the main driving forces behind far-reaching international agreements like TPP. As a recent leak underlines, drug manufacturers hope to use TPP to extend the monopolies that allow them to charge high prices for their products. Confirmation that drug pricing has little to do with actual costs in at least one part of the world comes from a surprising source -- the heads of Big Pharma companies, as this report in the Canberra Times reveals:

Multinational pharmaceutical companies are unable to assure Australians they are not being "ripped off" on the price of medicines as a result of their complex global supply chains.

The Australian heads of nine of the biggest global drug suppliers were forced into the embarrassing admission on Tuesday after backing themselves into a corner by insisting they have no idea what their own sister companies in other countries pay to import the same medicines.

This interesting confession was made during an Australian Senate inquiry into corporate tax avoidance. Apparently, Pfizer paid just AU$21 million (about US$16 million) in company tax in 2014, even though its Australian sales were AU$1.4 billion (about US$1 billion). The company claimed that was because its "cost of sales" in Australia were more than three-and-a-half times higher than those in the US. However, when pressed on those figures:

Pfizer managing director David Gallagher said he didn't know what any other Pfizer subsidiary paid for drugs manufactured by the company in Ireland and declined repeated requests to explain the "arm's length" process that determined intra-company transactions, known as "transfer pricing".

Understandably surprised by this, the Senate Committee chairman asked the heads of Pfizer, AstraZeneca and GlaxoSmithKline to confirm what they seemed to be saying:

"As the CEOs of three of Australia's biggest pharmaceutical companies, you have no idea what drugs cost in other jurisdictions? You can't tell us whether we're getting ripped off?"

As the Canberra Times reported:

All three agreed they could not.

It seems unlikely that TPP will do much to improve the situation.

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Filed Under: australia, big pharma, drug costs, pharma

Leaked TPP Chapter Shows How It's A Massive Gift To Big Pharma And Against Public Health

from the but,-fast-track's-in-place,-so-too-bad,-suckers dept

Over the last few years, we've seen leaks here and there of the various chapters of the TPP agreement, but generally ones that are quite out of date. The latest public leak of the "intellectual property" chapter that I'm aware of was done last October by Wikileaks and was the version from the previous May (2014). Now, Politico claims that someone has leaked the May 2015 version, though Politico has not published the document (which, frankly, is pretty lame for a journalism property). But, based on Politico's report, the agreement still looks to be what everyone's been saying it would be: a huge gift to giant corporate special interests, such as Big Pharma:

The draft text includes provisions that could make it extremely tough for generics to challenge brand-name pharmaceuticals abroad. Those provisions could also help block copycats from selling cheaper versions of the expensive cutting-edge drugs known as “biologics” inside the U.S., restricting treatment for American patients while jacking up Medicare and Medicaid costs for American taxpayers. “There’s very little distance between what Pharma wants and what the U.S. is demanding,” said Rohat Malpini, director of policy for Doctors Without Borders.

In response, the USTR falls back on its standard lame reply, about how draft texts are not "final." But this is why it's actually important to post these draft texts publicly, because what the draft Politico saw appears to show is that, whether or not it gets it, the USTR is fighting for policies that would harm poor, sick people, and massively benefit giant pharmaceutical conglomerates.

The highly technical 90-page document, cluttered with objections from other TPP nations, shows that U.S. negotiators have fought aggressively and, at least until Guam, successfully on behalf of Big Pharma.

That bit of information seems rather important in determining whose interests the USTR is truly representing in these negotiations. Remember, that while the final agreement will be posted publicly, the negotiating texts (which show what each side argued for) are being kept secret for four years after ratification -- by which point the staff at the USTR will likely have turned over greatly, and whoever is there now can pretend they had nothing to do with the negotiating positions that the US is now locked into.

And, of course, now that fast track is the law, Congress can't even step in to fix it. They'll only be allowed an up/down vote on the entire agreement -- with tremendous pressure on them to approve the whole thing, even if there are dangerous provisions mixed in the overall agreement.

Of course, we all know that this is why the agreement is secret. It's not politically feasible for the US government to publicly show that it's fighting against the health interests of the public and in favor of pharma profits. But it appears that's exactly what's happening behind closed doors. And that seems... wrong.

Filed Under: big pharma, biosimilar, competition, drugs, generics, ip, patents, pharma, pharmaceuticals, tpp

Big Pharma Companies Happy To Use The US Government To Push Industry Agenda, Not So Happy To Pay US Taxes

from the hardly-fair dept

Big pharma companies exert considerable influence on US trade policy. Research by the Sunlight Foundation shows that the pharmaceutical industry has been lobbying for the measures it wants in TPP longer and more consistently than any other sector. For example, one of the most important -- and contentious -- chapters of TPP is about keeping drug prices artificially high. Big pharma has also been vocal in calling for the European Union to be put on the Special 301 Report's "Priority Watch List" for daring to require that basic safety data about drugs be made available. Given this wide-ranging support from the US government, you'd think that pharmaceutical companies would be only happy to pay back in the form of taxes, say, but as Quartz points out, that's far from the case:

Pfizer's bid to purchase AstraZeneca failed, but the company's attempt to move to London in an effort to avoid US corporate taxes has inspired a new round of commentary on America's corporate tax system. Perhaps it should also spur a look at America's commitment to raising drug prices around the world.

The US taxes the global income of its companies, which has lead many of the largest to keep profits overseas indefinitely to avoid paying Uncle Sam, and even shift US profits overseas to avoid public levies. So-called “inversions” -- reverse mergers where a US company buys a foreign one and assumes their jurisdiction, as Pfizer proposed -- have also become more popular. Four US pharmaceutical companies have used the tactic to go overseas in the last year, and four more are considering similar moves.

It's probably too much to hope that the US government will abandon its unquestioning support for the pharmaceutical industry, but if more drug companies do relocate overseas to avoid paying US taxes, the public outcry against it doing so may grow.

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Filed Under: drugs, pharma, pharmaceuticals, taxes, tpp, trade, ttip

Big Pharma Accused Of Patent Plot Of 'Satanic Magnitude' By South African Health Minister

from the fighting-for-their-lives dept

Here on Techdirt we've written a number of times about India's efforts to provide key drugs to its population at prices that they can afford, and how its approach is beginning to spread to other countries. That's a big worry for Western pharma companies, which see their business model of selling medicines at high prices threatened by newly-assertive nations. The latest to join that club is South Africa.

As Brook Baker explains on infojustice.org, the "current South African patent regime is a PhRMA dream":

virtually every drug company patent filed in South Africa, so long as the applicant can fill out the form and pay the filing fee, will be and is granted. No one -- I mean no one -- double checks whether a patent application has any merit whatsoever. No one checks if alleged innovation is in fact new or well known under existing industry practice. No one checks if the patent application impermissively makes numerous claims or duplicates claims made previously. Pfizer could get a patent on a peanut butter and jelly sandwich tomorrow if it wanted to.

But all that is about to change, thanks to a comprehensive reform of the South African patent system. Here's what would happen in the realm of pharma, as described by Baker:

What PhRMA [Pharmaceutical Researchers and Manufacturers of America] doesn't like about the proposed SA reform that SA Draft IP Policy recommends: (1) tightening up patenting standards, (2) examining patent applications vigorously, (3) allowing other parties to oppose patent applications, (4) limiting patent terms to 20 years only, no extensions, (5) disallowing monopolies based on data/registration exclusivity and patent/registration linkage, and (6) adopting easier to use parallel importation and compulsory license mechanisms. Each and every one of these provisions is lawful; each and every one is acknowledged by international bodies including WIPO, the WTO, UNDP, UNAIDS, WHO and others; each and every one is a wise exercise of public authority that -- in accordance with the Doha Declaration on TRIPS and Public Health -- prioritizes public health and access to medicine for all.

Of course, the big pharma companies are preparing to put up a fight against this move. One suggested approach, contained in a document entitled, "Campaign to Prevent Damage to Innovation from the Proposed Draft National IP Policy in South Africa," backfired badly when it was leaked by a public-spirited whistleblower to the South African Mail & Guardian newspaper. Here's the reaction of a senior South African politician after having read it:

Health Minister Aaron Motsoaledi has accused a group of multinational pharmaceutical companies active in South Africa of conspiring against the state, the people of South Africa and the populations of developing countries -- and of planning what amounts to mass murder.

"I am not using strong words; I am using appropriate words. This is genocide," Motsoaledi told the Mail & Guardian on Thursday, in response to a plan he described as a conspiracy of "satanic magnitude" -- a plan he called on all South Africans to fight "to the last drop of their blood".

Understandably, the pharma companies have backed away from that particular campaign, but as KEI reports, they certainly haven't given up. Nor are they likely to, because the stakes are high. The campaign document explains why quite clearly (pdf):

South Africa is now ground zero for the debate on the value of strong IP protection. If the battle is lost here, the effects will resonate. Clearly [Médecins Sans Frontières] and similar NGOs understand that. A robust public affairs program is necessary to create the environment for a sensible IP policy to be adopted by the [South African] Cabinet and implemented through legislative processes. This program is meant to support -- and lead -- direct lobbying efforts. Without a vigorous campaign, opponents of strong IP will prevail -- not just in South Africa but eventually in much of the rest of the developing world.

In other words, expect the battle over pharma patents in South Africa to turn pretty nasty.

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Filed Under: aaron motsoaledi, big pharma, patents, pharma, south africa
Companies: pfizer, phrma

Why Opening Up Clinical Trials Data Is Good For Pharma Companies Too

from the everybody-wins dept

Earlier this year we wrote about how AbbVie, the pharma company spun out of Abbott Laboratories, had gone to court to stop the European Medicines Agency (EMA) from releasing clinical trials information about one of its drugs. Despite what AbbVie claimed, this was not commercially sensitive in any way, but simply basic data about safety and efficacy.

It's often overlooked that this data is mostly obtained by testing new drugs on volunteer members of the public who take the medicines in order to establish their safety. By definition, these volunteers are putting themselves at risk. They selflessly offer to do that in order to advance medicine and confer benefits on society as a whole. That means the clinical data obtained from such tests belongs to the public that made them possible, at least from a moral viewpoint.

If a company seeks to prevent the free dissemination of that safety data, as AbbVie is doing in Europe, it is breaking the implicit compact it made with the people who agreed to try out its drugs. Those invited to take part in future trials of AbbVie's drugs might then begin to ask why they should endanger their health and even lives purely to boost one company's profits.

But even if AbbVie is resistant to the argument that it has a moral obligation to allow the clinical trials data to be released, and is not concerned that the public might think that it has something to hide, perhaps it will be won over by a recent article in The New England Journal of Medicine (NEJM), written by four people from the EMA. This puts forward a quite different argument, that releasing test data will directly benefit pharma companies themselves, and offers a number of reasons why.

First, access to the full data sets of completed studies will lead to improvements in the design and analysis of subsequent trials.

Basically, the more information that drug companies have about what works and what doesn't, the better they can design their future tests.

Second, lessons from past trials about the heterogeneity of treatment effects not only will streamline drug development but also may enhance a drug's value in the marketplace. Identification of a population with high unmet need in which a new treatment may be more cost-effective than other available treatments can aid sponsors during reimbursement negotiations.

Again, the more information companies have about how different groups of patients responded to a drug, the easier it will be to spot particular sub-groups in the population who derive particular benefit. Selling products for that sub-group will be both easier, more profitable and more ethical than simply trying to sell to everybody, since the drug may be ineffective or even inappropriate for many of the general population.

Third, since several possible treatments for one medical condition are often available, comparative-effectiveness information is important to patients, prescribers, and sponsors seeking to position their products.

For a given condition, there may be several possible treatments. Making clinical test data available allows them to be compared, and the best one selected for future drug development, instead of investing huge sums in what may well be a relatively ineffective approach.

Finally, one of the inherent inefficiencies of data secrecy is the repetition of trials and projects that are doomed from the outset; drug developers may continue to pursue a given target even though clinical trials conducted by others have demonstrated the effort's futility.

In many ways this is the most important reason. If the results of clinical trials are kept secret, companies run the risk of repeating the mistakes already made by others. Not only is that a waste of time and money that could be better spent on more fruitful avenues, it is putting test subjects at risk unnecessarily. As the NEJM points out:

In at least one documented case, the availability of data from completed trials could have spared trial subjects a potential health risk and saved millions of research dollars.

The article concludes:

A managed-release environment that allows sharing of patient-level data while ensuring patient privacy would create a level playing field for all stakeholders. What is sometimes labeled as "free riding" may ultimately pay dividends for innovative companies and for public health. It is ironic that the organizations that most resist wider access to data are the ones that stand to benefit so much from greater transparency.

In fact, this is no mere theoretical possibility. We know this approach works, because it is precisely what we see in the field of open source. Sharing the code freely creates a level playing-field that allows companies to innovate faster because they can build on the work of others. The rise of a multi-billion dollar software industry based around such sharing, and the unprecedented rate of innovation this drives, are yet more reasons that companies like AbbVie should be striving to promote, not prevent, the release and dissemination of clinical trials information as open data.

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Filed Under: clinical trials, data, innovation, openness, pharma
Companies: abbvie

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.

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Filed Under: drugs, evergreening, healthcare, patents, pharma