Healthy Skepticism Library item: 17888

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Publication type: Journal Article

Ed.
An innovative challenge to the pharmaceutical industry
The Lancet 2002 Nov 2; 360:(9343):1341
http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(02)11417-6/fulltext

Abstract:

For those who feel that it is high time the powerful pharmaceutical industry had its wings clipped, last week gave cause for cautious optimism. On Oct 21, US President George W Bush stepped into the White House Rose Garden to announce “immediate action to ensure that lower cost, effective generic drugs become available to Americans without improper delays”. Two days later, the European Parliament gave preliminary support to a major reform of European pharmaceutical law.
The US proposal, which was published in the Federal Register on Oct 24, is now the subject of a 60-day comment period. It purports to address the problems with the 1984 Drug Price Competition and Patent Term Restoration Act, usually known as the Hatch-Waxman Act. This law amended existing legislation to provide a framework for manufacturers of generic drugs to file applications against brand-name drugs. Before the Hatch-Waxman Act, generic rug manufacturers were obliged to duplicate the safety and effectiveness research done by the innovator company. The Act allowed generic manufacturers to use and reference existing research when filing with the Food and Drug Administration (FDA) to produce and market a copy of a brand-name drug. In addition, the Act stipulated that the brand-name company must share relevant research information with a generic-drug company before the patent of a drug has expired so that the generic firm is able to start testing its own copies. The proposed change to European Union (EU) legislation would similarly allow generic firms to prepare for product launch before the expiry of the innovator-drug patent (see p 1397).
But the Hatch-Waxman Act, which was intended to ease the passage of generics to the marketplace, has allowed ample scope for the brand-name drugs industry to fight back. Loopholes have been found and extensively exploited by the pharmaceutical industry. In July, the US Federal Trade Commission (FTC) made public its year-long review of impediments to generic drugs coming to market. The FTC report described the various methods that brand-name manufacturers have used to delay or prevent generics becoming licensed. One popular delaying tactic has been to file new frivolous patents, based on a feature such as the pattern on a tablet. Despite the fact that the new patents filed reflect no change in the patented drug’s effectiveness, a freezing of the original patent is triggered, and progress of any generic competitor is stalled. Multiple frivolous patent applications have resulted in delaying generic entry to the market by several years. Bush stated: “Our message to brand-name manufacturers is clear: you deserve the fair rewards of your research and development; you do not have the right to keep generic drugs off the market for frivolous reasons.”
These moves towards tighter legislation in the USA and EU signal an important message to the global pharmaceutical industry. The escalation in price of prescription drugs, and the resultant drain on the economies of the developed world, has reached a critical point. Spending on drugs by Europe’s statutory health-insurance systems in 2001 is estimated at E 78·5 billion (US$77 billion)-almost double the cost a decade earlier. Moreover, governments can no longer ignore the concerns of key sectors of their electorate, notably senior citizens in the USA, who are volubly unhappy with their prescription-drug bills. And while it is reasonable that a company should have patent protection in return for intellectual innovation, it is also reasonable to question just how great a powerhouse of innovation the pharmaceutical industry is. A report by the nonprofit US National Institute for Health Care Management in May this year found that the FDA approved 1035 drugs during 1989-2000. Only 361 were new molecular entities (of which only 153 were selected for priority review); the remaining 65% contained active ingredients available in drugs that were already approved.
The message that the brand-name companies must take away from these important legislative changes is that they need to rethink their investment strategies. For too long, the drug industry has invested heavily in securing the most creative minds to staff their legal departments. Given the remarkably few truly new drug discoveries in the recent past, it is clearly time that these drug companies invested preferentially in the creative minds in their laboratories.