Taming Patent Drug Prices
People taking the drug Prilosec to treat serious heartburn should have seen their monthly costs drop from $152 to about $80 in October, when the manufacturer’s patent on the widely prescribed drug was set to expire. At that point, a cheaper generic drug should have hit the market. It didn’t. Loopholes in U.S. law allowed the drug company, London-based AstraZeneca, to file a lame lawsuit against its generic competitors and trigger a 30-month delay on approval of the generic. Prilosec earned $3.7billion for AstraZeneca in the United States alone last year, so the legal bills will be worth it.
Such abuses, costing U.S. consumers billions of dollars a year, should be at the heart of hearings that begin today in the Senate Health Committee. Prilosec is just one of many patented drugs kept exclusively on the market by hardball legal tactics.
Perhaps the most egregious case is Taxol, a drug for treating breast and ovarian cancer that was developed entirely with U.S. taxpayer dollars in the 1970s and ‘80s.
In the early ‘90s, the U.S. government allowed Bristol-Myers Squibb Co. to patent the drug in exchange for a promise to allow generic companies to enter the market in five years, by the end of 1997. When that date came, Bristol, by then earning more than $1billion a year on the drug, mounted a ruthless assault on would-be generic competitors. Four years later, women finally got access to a generic costing half the $8,000-a-cycle price of Taxol.
Congress can best close these loopholes by passing SB 812, a bill by Sens. John McCain (R-Ariz.) and Charles E. Schumer (D-N.Y.) that would discourage the Federal Trade Commission from its practice of giving automatic 30-month patent extensions to any brand-name drug manufacturer that wants to challenge a generic in court.
Drug companies deserve to recoup the significant costs of bringing drugs to market and earn a fair profit. McCain and Schumer’s bill merely requires the FTC to assess each patent infringement claim carefully.
The McCain-Schumer bill was declared dead last year. This year is a new story. Two powerful groups--labor and employers--have rallied behind it as a way of dampening drug prices that have sent their employee health premiums soaring. It will take more than this bill to tame drug costs, but it at least takes aim at costly patented drugs that long ago made back their development costs and turned a handsome profit for their makers.
