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Drug
Companies Preventing Generic Drugs
If
your pharmacy bill is staggering, you might be interested to know
there may be a cheaper version of the drugs you need, but brand
name drug companies don't want you to know about it.
If
you had a choice between a costly prescription drug and its cheaper,
generic version, which would you choose? Often, do you even have
the choice?
While 3 billion
prescriptions are filled annually, 44 percent are filled generically
— yet that equals only 10 percent of the nation's drug bill.
Americans spend $145 billion per year on prescription drugs, according
to IMS Health, which provides market research to pharmaceutical
and marketing companies.
And the pharmaceutical
companies that make the brand name drugs want to keep it that
way.
Legislation
was introduced in Congress today to reform the laws regulating
when particular drugs may be sold in their generic form. This
is important to consumers because the generic drug, which won't
have a brand name, is, on average, 70 percent cheaper.
And according
to the National Association of Pharmaceutical Manufacturers, if
the number of generic prescriptions increased by a mere 1 percent,
Americans would save $1.4 billion a year.
Buying Time to Maintain Price Control
Currently,
pharmaceutical companies have the exclusive right to sell the
drugs they develop for 20 years, the time during which the drug
may not be sold in its cheaper, generic form.
But the drug
companies have invariably found ways to keep the generic version
of their brand name product off the market for a longer period
of time — to buy more time and delay market competition.
The legislation introduced is designed to close the loopholes.
"You're seeing
more and more brand name manufacturers keeping generic drugs out
of the market place by effectively manipulating the patent system,"
says Nancy Chockley of the National Institute for Healthcare Management.
Andrx, a maker
of generic drugs in Florida, is on the receiving end of the newest
strategy. The company was ready to sell a cheaper version of Prilosec,
the hugely popular drug used to treat ulcers and heartburn.
"They have
been on the market with this product for approximately 13 years
in the United States and had $33 billion in sales over that period
of time," explains Elliot Hahn of Andrx, who thinks that is long
enough.
But Astrazeneca,
the manufacturer of Prilosec, recently won new patents that were
not related to how the drug works in the body but to how it is
made in the factory.
The strategy
is called "patent stacking," where companies stack on any patent
they can, just as its original patent is about to expire.
"Some of them
are as frivolous as the color of the bottle," says William Nixon
of the Generic Pharmaceutical Association in Washington, D.C.
"Every new patent that they can put through the patent and trademark
office wins them another two-and-a-half year windfall at the expense
of the consumer."
It takes two-and-a-half
years because add-on patents automatically delay the approval
process of generics by the Food and Drug Administration.
Staggering Sales Provide Incentive
The generic
industry expects more battles like this one because over the next
few years, patents will expire on about two dozen popular brand
name drugs, with sales exceeding $30 billion.
Drugs such
as Accutane, Augmentin and Flovent all come off patent within
the next couple of years alone.
For Prilosec's
maker, Astrazeneca, the time it has gained will represent about
$11 billion in sales. The company declined requests for interviews.
An industry
spokesman says adding on patents is legal and allows companies
to earn more money to innovate.
"It's essential
that the companies are able to protect their legitimate patent
rights," says Alan Holmer of the Pharmaceutical Research and Manufacturers
of America. "That's what this debate and balance is all about."
The bill outlined
today would make it far more difficult to patent stack. With billions
at stake for business and for consumers, a very tough battle is
expected ahead.
Related
articles:
Reference
Source 102
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