Since I find the
patent wars in the pharmaceutical industry particularly interesting, I decided
to focus on that topic this week. I find patents on drugs interesting due to
the huge amount of funding and time needed to even get a drug into market.
According to forbes.com, the average cost of bringing a new drug to market is
$1.3 billion. To put this price in perspective, 1.3 billion dollars would allow
a person to buy 371 Super Bowl ads, 16 million official NFL footballs, two
pro-football stadiums, almost all NFL football player's salaries, and every
seat in the NFL stadium for six weeks in a row.
The drug developed by major pharmaceutical companies costs between $4
billion to $ 11 billion.[2]
This is an example
of patent war with another popular company in the Bay Area-- Bayer, which has a
manufacturing center located in Emeryville (although its headquarters is in
Germany). Bayer was battling Pharma Dynamics, a Cape Town- based generic drug maker.
I learned that Bayer is called the "evergreening" of pharmaceutical
patents, meaning that they make small changes to existing products in order to
extend their patent protection and keep makers of cheaper generics out of the
market.
On March 2011,
Pharma Dynamics obtained registration from Medicines Control Council (MCC) for
Ruby, a contraceptive drug. Ruby was a generic version of Yasmin, a drug that
was still under patent protection by Bayer. Pharma Dynamics believed that the
Yasmin patent, which was granted in 2004, was invalid and applied to revoke the
patent, after obtaining approval from the Medicines Control Council (MCC) to
sell Ruby. The company claimed that "the Yasmin patent lacked 'novelty'
and 'inventiveness' because Bayer had already patented the product in
1990." This would mean that the patent expired in 2010, since the standard
practice, followed internationally, calls for 20-year protection. This 20-year
period is set to allow the inventor to compensate for their investment and make
a profit before other competitors can copy them. The business development
director of Pharma Dynamics', Tommy Scott, said that the company waited for the
Yasmin patent to expire, and wasn't aware of the second patent issued in 1999.
Bayer claimed that this patent was original, because it contained an active
ingredient that allowed the drug to dissolve faster.
It seems that there
have been growing patent disputes in many developing countries, as companies
try to bring down the cost of medicine by promoting generic versions, normally
termed "incremental innovation" by research-based companies. Competitors
argue that by doing this (filing several patents on discoveries made years
ago), the original inventors limit competition.
This idea of "evergreening" is both terrible and terribly clever at the same time. I'm not sure if the 20 years rule lasts for all patents, but since you can apply for a new patent on an improvement, that would extend the company's existing patent for another 20 years. I sure do feel bad for those other pharmaceutical firms.
ReplyDeleteManali, a great post that shifted my thinking from the smartphone to pharmaceutical industry! (Nice twist, I see your Bioengineering side coming out.) I agree with Amy when she mentions that the idea of "evergreening" is cruelly genius.
ReplyDeleteAlthough I agree that generic drugs make it more difficult to make a profit for the companies that initially invented the "original" drug, I think they are an essential part of our medical industry today. With skyrocketing health care costs, patients are being forced to pay more and more for their health care coverage and a major part of the cost is the medication they need to take. Generic drugs make it more affordable for these patients to receive the appropriate treatment they need. Having expensive drugs makes it much more difficult for certain patients to obtain said drugs and they may not even take them due to the financial burden associate with it...potentially causing the patient to fall ill again and return to the hospital.
ReplyDeleteThe cost associated with pharmaceutical products is due to the immense amount of testing and trials that they undergo before going to the market. So, the pharmaceutical is expensive. Keep in mind that every pharmaceutical that you see on the shelf, represents the 1% of pharmaceuticals that made it to the market. All the other 99% didn't make it past research or did not pass clinical trials. You have to remember that with this industry, regulation is very strict. So, the initial cost of the pharmaceutical is expensive, but "evergreening" to extend patents seems quite unfair. There has to be patent reform to address this area. So, remember that when an pharmaceutical is expensive, a person is not only paying for the process of testing and creating that specific pharmaceutical, but also for all the other products which failed to make it to the market. Through regulation, safe products are achieved, and that is associated with increased costs. So, it's really a debate between safety and cost. What do you all think?
ReplyDeleteYes, I thought "evergreening" was an extremely interesting topic so I brought it up. Another reason I thought this was a really interesting topic was that it bridges healthcare patents with another aspect of healthcare-- the tremendous cost associated with it. Yes, it is true that generic drugs make it more affordable for patients who would otherwise not be able to afford treatment. However, this said, I still think that evergreening in order to "extend" patents seems unfair. Rahul brings up a very good point-- we need to think about the pharmaceutical industry as a whole when considering the cost and what the patents protect. At the end, patenting is mostly used for financial reasons. A pharmaceutical company's job, as a company, is to make money. Thus, they will price their products (the ones that do come out onto the shelf, which is only 1%) high enough for the company to make a profit. Thus, all the failed attempts at making a drug candidate must be factored into this cost.
ReplyDelete