Sen. Bernie Sanders, long an outspoken critic of the nation’s high drug prices, dropped a new bill Tuesday that, at least on the surface, positions him as a partner to President Trump in the administration’s efforts to bring down the cost of medicines.
But the Vermont Independent’s bill — which won’t even formally be introduced until January — raises more questions about Washington’s efforts on this policy front than it answers.
The Sanofi deal is not unique. The high-priced prostate cancer drug Xtandi was developed at UCLA with taxpayer-funded research grants and support from the Army and the National Institutes of Health. UCLA licensed the drug to a small biotech company in San Francisco. Pfizer Inc. paid $14 billion to acquire that company last year. Americans are being charged $129,000 for a one-year treatment. The same drug regimen costs just $30,000 in Canada.
Thanks to pharma, Americans are not allowed to know where their drugs are manufactured. THe FDA recently found that many of these drugs are contaminated, due to no regualtions or inspection of the manufacturing processes or supply chain. They even found that the few FDA inspections were unable to detect contamination. Reimporting drugs is a short term work around, it is clear we need stronger action.
Since only 2-3 new drugs that make it to market actually recover their R&D costs, the threat of losing patent protection will discourage innovation, to everyone’s detriment. A better solution is to get rid of excess regulation that doesn’t improve safety or effectiveness, since it is the driving force behind soaring drug prices. https://www.statnews.com/2018/10/01/changing-1962-law-slash-drug-prices/
The use of the phrase that pharmaceutical companies would be “stripped of their patent rights” is regrettable. Patent holders would retain their patents and their right to sell medicines under the Bill, but instead of having monopolies they would face generic competition. So-called compulsory licensing rights are enshrined in the World Trade Organization Agreement on Trade Related Aspects of Intellectual Property Rights and provisions allowing such licenses are common in the laws of most countries, including the U.S., which allows government-use licenses by any federal official or federal contractor under 28 U.S.C. sec. 1498 so long as reasonable compensation is paid. Of course, Big Pharma wants untrammeled rights to charge excessive prices for new medicines and then to raise prices unconscionably 10% per year thereafter. But patients, insurers, and government payers can’t afford the escalating costs of patent-protected medicines where after-cost earnings are far in excess of what is spent on research and development. Moreover, instead of investing super-profits in R&D, Pharma “invests” in stock buybacks and dividends and gambles on promising, early-stage innovations largely funded by NIH. The current system of paying too much for medicines to get too little, poorly targeted, and inefficient R&D should be switched for new innovation/access models that produce better focused and more efficient research at a fraction of the cost and that then manufacture quality assured medicines generically for low cost sales.
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