Report Says Patents Prevent New Drugs

An anonymous reader writes "Current orthodoxy claims patents encourage innovation, by allowing developers to enjoy profitable monopolies on their inventions which in turn inspire them to create new inventions. A new report by the non-partisan General Accounting Office suggests that this orthodoxy is wrong — at least when drug companies are involved. According to the report, existing patent law allows drug companies to patent, and make substantial profits off of, "new" drugs which differ little from existing medicines. Given high profit margins on very minor innovations, the report argues that drug companies have little incentive to produce innovative new drugs. In other words, current patent law actually discourages drug companies from producing new medicines. Responding to the report, Senator Dick Durbin (D-IL) released a strongly worded statement suggesting that a legislative response will be forthcoming. "The findings in this new GAO report," said Senator Durbin, "raise serious questions about the pharmaceutical industry claims that there is a connection between new drug development and the soaring price of drugs already on the market. Most troubling is the notion that pharmaceutical industry profits are coming at the expense of consumers in the form of higher prices and fewer new drugs.""

Claritin vs. Clarinex

[Cutie Pi]

One example is Claritin vs. Clarinex. (Both are anti-histamines that don't cause drowsiness in most people). Claritin was a cash cow for Schering-Plough whose patent expired a few years ago. It used to be prescription-only and the cost used was around $1 a pill. Now you can buy 300-ct bottles over-the-counter at CostCo for ~ $10.00.

Enter Clarinex, which Schering claims is certified for both indoor and outdoor allergies. Once again, it's a prescription-only medication with high prices. The punch line: Clarinex is exactly the same drug as Claritin after Claritin passes through your liver once. There are tons of examples like this, where drug companies change the chemical formulation only slightly, usually in inactive places of the molecule (i.e. the "business end" that interacts with the target enzymes is unchanged). Why new formulations like this are granted patents is beyond me.

Re:Claritin vs. Clarinex

[Anonymous Coward]

Based on your description of the change to Claritin, it sounds like Schering modified the molecule to increase its half-life in the body. Although this change does not affect the ACTIVITY of the drug, it is a significant enough change to warrant the label "new."

Re:Not unique to pharmaceuticals.

[simm1701]

Try the japanese system - you get two years to exploit an idea with protection from so that no one else can use your idea in that time.

At the end of those two years, if you are actively exploiting the idea in a business you can get another 1 year of protection and thats it

The principal is that if a 3 year head start on your own idea isnt enough to get you established in the market then you should probably let someone else do it anyway rather than stifle future innovation

(companies also have to keep their R&D far more secure under this system and they only usually patent just prior to launching to market - this in turns requires a much faster and streamlined patent application system)

Link to the report, plus, get them for free

[jeblucas]

GAO Reports can be shipped to you for free if you request them (and you are a US resident). The report referred to in this article is GAO-07-49. Request a paper copy here [gao.gov]. If you want to read the PDF, you can click here [gao.gov] The GAO's a pretty amazing resource. I have a feed of their recent reports on my aggregator, they have a monthly top 10 [gao.gov], etc.

GAO Junkie

Re:We don't need many new drugs

[swelke]

You forget sulfa drugs. They're concentrated in the urine. If you have a bladder infection, those work wonders (and stink like the devil).

Name change; link to report

[Anonymous Coward]

GAO is now the Government Accountability Office. Here's a link to the report.

http://www.gao.gov/new.items/d0749.pdf [gao.gov]

Re: Something different?

[Black Parrot]

> I realize that making drugs (or any other product, for that matter) requires research and testing, etc., and manufacturers need to recoup that money spent. Plus, profits from a block-buster drug go into funding expensive research on drugs that can only target a very small portion of the population.

Actually (according to various news outlets over the past several years), these companies spend ten dollars on marketing for every dollar they spend on research.

Re: This is why we should ban advertising

[Black Parrot]

> If we really want to see new drugs AND get cheaper health care, banning advertisements is a good start.

And it used to be banned in the USA, until "someone" bought enough congressmen to get that reversed.

(Same with the ambulance chasers that you mentioned in passing.)

Re:Exaggeration

[sinclair44]

Agreed, and another problem with that is the change has only to be minimal even as little as changing the purpose and/or dosage of a drug.

Exactly. I'm a clerk in a pharmacy and on a particularly non-busy night we were all talking with the pharmacist about this sort of thing. He gave an example of some company which came out with Drug X (can't remember which one). As the patent on Drug X was about to expire, they created "Drug X Gel Capsule... better than before!!!" Of course, doctors, not really knowing, started prescribing the new X Gel Capsule, which had a new patent and thus no generic (and by this point, the original X's patent had expired and had cheaper generics).

Well, the pharmacist pulled out one of the new X Gel Capsules. Guess what it was? Just the original Drug X encased in a gel cap. That's it. A regular pill in a gel cap.

Re:new drugs?

[Ninjaesque One]

You're not quoting anyone. I have to burn karma, but [sic] means that was the spelling as it. As in, Meanwhile, pharmaseuticals[sic] with known dangerous side effects. . .. I get to use it, because I'm quoting you. Original texts should not have [sic] in it.

Re:Exaggeration

[dthree]

There was another example of this where drug company A's patent on a symptom pill was about to expire, so they make some minor change to it, change the name and get another 10 years out of it. Meanwhile, drug company B releases a generic form of A's patent-expired drug and gets promptly sued by A for patent violation. "It's expired" you say, "how can they sue?" It's because company a sets up a cage of side patents around the drug, everything from how the pill is coated to broadly sweeping descriptions like "drug is delivered by a time-release mechanism". Even if these things have been used before on other drugs, even the same TYPE of drug, company A claims patent infrigement based on the "unique combination with our product". In another example, company A patents a substance that is created inside the body when a patient takes the branded or generic versions of their drug, therefor taking generics creates a patent violation in the patient's body! This is just a (cheap) way of of trying to outlaw generics.

So it looks to me like the legal team of a corporation is now required to become a profit center, rather than just provide protection for company interests. With rising drug costs far outpacing inflation AND the great profit increases for most drug companies, it seems like the legal teams and the multi-billion dollar marketing campaigns are paying off.

Dental care?

[tepples]

The medical system is HUGELY biased to work on treatments for things not working properly, rather than work on prophylaxis. This will never change unless we go to socialized medicine, because people fundamentally go to see a doctor when they are sick, and not to manage their future potential illness burdens.

Then why are teeth different? It's common for United States residents to have their teeth cleaned by a professional hygienist and looked at by a dentist (doctor of dental surgery) twice per year.

If a new drug comes out that offers no additional benefit, but has patent protection, WHY DOESN'T THE CONSUMER BUY THE GENERIC?

Because as I understand it, new drugs rarely offer "no additional benefit". For instance, Allegra (fexofenadine hydrochloride) is less toxic to the heart than Seldane (terfenadine), and Cialis (tadalafil) lasts longer in the body than Viagra (sildenafil citrate). The ADD medication Strattera (atomoxetine), a norepinephrine reuptake inhibitor, has the advantage over the previous standby Ritalin (methylphenidate) that reuptake inhibitors are an indirect stimulant and thus take longer (two weeks) to start working. This may sound like a disadvantage, but unlike amphetamine style stimulants, reuptake inhibitors does not lend themselves to abuse and are not scheduled as controlled substances. But you may be right about Nexium (esomeprazole magnesium) vs. Prilosec (racemic omeprazole magnesium), as it appears that the biggest difference is the dosage: Nexium is prescribed at higher doses than Prilosec was.

Re:More like:

[Guppy06]

"With the kind of laws regulating this industry, you wouldn't even be able to research *aspirin* today, let alone have it approved or sold."

"Aspirin" itself would likely still be a trademarked term in the United States had we not declared war on the country of origin. World War I and the ensuing revocation of Bayer's IP in the US was a boon to the generic drug industry.

meanwhile in a different part of the world....

[Quetzo]

Novartis is suing the Indian government for rejecting the Novartis patent.

From TFA:
Novartis had sought a patent for a new use for its cancer drug Gleevec, which was rejected by the Indian patents office in January, on the ground that the drug was a new form of an old drug, and therefore, not patentable under Indian law.

the article [indiatimes.com]