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June 14, 2007

On The Subject of Pharmaceutical Patents

There are some who argue against the development of new drugs at all:

The health of the nation (and indeed of the world) would be better served, I believe, if we concentrated on treating patients effectively with the agents that we already have at our disposal than by the constant development of new drugs. Whilst costly new drugs may benefit some patients, I strongly suspect that they also deprive other patients of effective, but less spectacular, treatments by eating into limited health budgets. In other words, to paraphrase George Bernard Shaw, new drugs rob Peter to pay Paul, and therefore get the wholehearted support of Paul.

The alternative proposal would be that the costs of new drugs are regulated in such a way that they have a zero impact on health budgets and a proven net benefit on the health of the nation.

I don't agree with this idea, but there's an element of truth to it. We tend to view drug development as an unambiguous positive -- more medications are always better, more formulas are always superior. But, in fact, there are limited resources, and the money spent tracking down newer and more powerful treatments is money we could choose to devote to broadening access to less costly, less spectacular, but very effective treatments. Pharmaceutical development is undoubtedly a marvel, but it's one with real costs, and there are a host of alternative ways to structure the industry that could emphasize its strengths while decreasing its drawbacks.

June 14, 2007 | Permalink


There's another aspect to the "no new drug" argument: many new drugs perform no better than their generic counterparts, but market forces encourage their use -- driving up healthcare costs.

Posted by: karl | Jun 14, 2007 2:45:27 PM

But where will that leave me?

Posted by: Huey Lewis | Jun 14, 2007 3:02:15 PM

Of course, the one area where we do (always to keep up with the, if you'll pardon me using this evil word, evolution of drug resistance) need new drugs is antibiotics.

But these don't really allow for much in the way of profits, so our current system generally doesn't meet the need for them.

Just adding my $0.02.

Posted by: DAS, (Possibly Mad) Scientist | Jun 14, 2007 3:08:34 PM

I agree with Karl, absolutely, though I'd term them market failures. There is too little incentive to compare drugs efficacy now, especially after they are off patent. Glaxo doesn't actually want to know whether their new drug is more effective than an existing generic, they'd rather just assert that it is.

Posted by: AJ | Jun 14, 2007 3:11:21 PM

I agree with DAS. We could change the focus to new antibiotics and new vaccines, which aren't being pursued because there is little profit in it. There should be some incentive to provide drugs that benefit the majority of people and not just more penis pills.

We could also focus on a healthier lifestyle so we won't need all the cholesteral, heart and diabetes medications.

Posted by: Steph | Jun 14, 2007 3:15:06 PM

Well, that's a great argument, unless you or someone you know is dying of something for which there is no current treatment (but for which there are treatments in pipeline). I'm inclined to get esophagus-ripping mad at this line of thinking, but I'll restrict myself to noting that the flaw in the argument is that money currently spent on drug developement, if not spent on drug developement would probably not therefore be spent on treatment options that you would prefer to see. It probably wouldn't get spent on health care at all.

Also: Polio? Does Mr. Konarzewski want to go back to 1950 and make this argument?

Posted by: Seb | Jun 14, 2007 3:19:15 PM

This argument is almost right. The pharmaceutical industry needs to spend less time coming up with new ways to treat chronic conditions for which there already are effective treatments, and to spend more time on stuff for which there are no current effective treatments.

Posted by: nolo | Jun 14, 2007 3:35:34 PM

This seems to me to be an arguement that makes some sense in a current time only frame, but is absolutely stupid when applied over time.

Even minimal improvments in treatment (including drugs) over a short period of time add up to be a tremendous advantage over a long period.

Posted by: Dave Justus | Jun 14, 2007 3:40:08 PM

The incentive is also higher to develop treatments that one must take daily or weekly for life (statins, vi@gra) than cures which one takes for a week and then never again, barring a relapse (vaccines, antibiotics). If I can sell you a one dollar pill every day for the rest of your life, I'll make about as much money in six months that I would get from the $200 shot that saves your life in a single dose. I would see the benefit of this proposal being the diversion of pharmaceutical investments away from "blockbusters" that boost share prices and back towards medically necessary treatments.

Posted by: justawriter | Jun 14, 2007 4:00:44 PM

I can sell you a one dollar pill every day for the rest of your life, I'll make about as much money in six months that I would get from the $200 shot that saves your life in a single dose.

But it doesn't work that way. Consumers value convenience and other product improvements and markets respond to that. On your account, carmakers would never have produced more reliable or durable cars because they could make more money building crappy cars that broke down often and wore out quickly. That's not what happened.

Posted by: JasonR | Jun 14, 2007 5:00:23 PM

The hell that didn't happen. I'm driving a 27 year old Benz that looks to be in mint condition compared with any 10 year old car built in America.

The "new drug" thing is basically a scam built on our memory of the cure for polio or the development of penicillin. Most of our problems today should be prevented, not cured, and of those remaining, we know that most of those will eventually be cured by stem cell research, the proper use of antibiotics instead of promiscuous shotgun prescribing, and the end of the drug wars that have prevented the use of the safest drugs we know- morphine, codeine, and marijuana.

The new drug scam is based on the same reasoning Detroit uses to sell you a new car- You love that new car smell, don't you? But it turns out that new car smell is composed of fumes that might kill you.

Posted by: serial catowner | Jun 14, 2007 5:51:04 PM

"we know that most of those will eventually be cured by stem cell research, the proper use of antibiotics instead of promiscuous shotgun prescribing, and the end of the drug wars that have prevented the use of the safest drugs we know- morphine, codeine, and marijuana."

Can I get a pony, too?

Posted by: Klug | Jun 14, 2007 6:00:03 PM

The hell that didn't happen. I'm driving a 27 year old Benz that looks to be in mint condition compared with any 10 year old car built in America.

Then you or someone else must have devoted an enormous amount of effort to maintaining or restoring that Benz.

For a more realistic comparison of old and new cars, try reading this.

Posted by: JasonR | Jun 14, 2007 6:19:18 PM

The question to ask yourself: would that drug be here today if it weren't for patents?

Posted by: Jason | Jun 14, 2007 7:52:29 PM

Very odd to quote Bernard Shaw on health care. He was opposed to vaccinating against small pox.
See Doctors' Delusions

Posted by: Robert Waldmann | Jun 14, 2007 8:36:33 PM

A point that has been given a little currency on this forum but not in the original blog posting is the so called "me-too" drug craze. Many of the large pharmaceutical companies do not really bring about new, innovative medicines as patents require. Instead, they often repackage existing drugs with small--often nominally demonstrable--changes, and market them as truly new drugs. Evidence of this includes many of the antidepessant and blood pressure medications.

Posted by: Jeff | Jun 15, 2007 12:04:23 AM


While there are a number of truly egregious examples of me-tooism (Viagra/Levitra), do you really think that there isn't a difference between Wellbutrin, Zoloft, Prozac and Paxil?

Posted by: Klug | Jun 15, 2007 12:28:42 AM

I don't know why "me-tooism" is supposed to be a problem, let alone a "craze." Different companies produce and sell similar products and services in pretty much every sector of our economy. Is there a "me-too craze" in the computer industry because Gateway, Dell, HP, Compaq and a bunch of other companies all make PCs with similar capabilities?

Anyway, I think Jeff is also ignoring important differences between different drugs that may superficially appear to be very similar, such as differences in their side effects, interactions with other drugs, or mode of action. A drug that works well for one patient may not work well for another, which is why it may be important to have a range of drugs to address a particular disease or condition.

Posted by: JasonR | Jun 15, 2007 1:19:27 AM

My big problem with new drug development is that so much of it ISN'T new. Drug companies repeatedly make copycats of old drugs, and then make a killing with the new patents. This isn't innovation at all, and it adds to the cost of health care.

Posted by: beckya57 | Jun 15, 2007 1:58:34 AM

ENCODE 2007 just out.
More and more detailed and applicable genomics.
And this is only the first 1%.

No way we can pass up the opportunities for some
of the pharmaceutical 'miracles' just peeping up.

It will take real R&D money which BigPharma has been
sluicing off into advertising and executive perqs.
So that would have to be redirected and Edwards award ideas would work too.
Like that.

But simply can't quit. Too much magic on the horizon.

Posted by: has_te | Jun 15, 2007 2:20:24 PM

Look, here's a little newsflash for you- most people, and their doctors, can't really tell whether one sub-variant is better than another.

When you take or prescribe a drug, you have different dosages, different times of day, different absorption factors, and different problems you're trying to treat. Then there are the other drugs you're taking, and if you're taking one, it's a good guess you're taking others. Then there are the combination drugs, sometimes combinations of drugs to treat one problem, other times combinations of a drug and the drug you take to make the first drug tolerable.

How your doctor responds to this mess pretty much depends on the time of day and his golf game last week. And that's assuming you actually brought a full list of all the drugs you're taking, which the doctor will assume you can't possibly take all of them at the times indicated because, really, who could?

So for most of the new drugs this pretty much boils down to "do you like it" and "will your doctor prescribe what you like".

Our wonder and amazement at how well drugs work comes from what happens when an unmedicated person in an emergency takes one of the basic drugs- an asthma inhaler, an antibiotic, a shot of morphine, a dose of insulin. What happens then really is a miracle.

And the basic problem in this country is that a lot of people can't afford that miracle. At the same time, a lot of other people are paying $100 extra per prescription because they think they get less tummy aches, or maybe the drug company flew their doctor to Hawaii to explain how well the new drug works.

And we have seen, repeatedly, that the drug companies cherry-pick their studies to demonstrate a difference that remains trivial in spite of their best efforts to cook the evidence.

Are there problems remaining that could be solved with drugs? Sure there are- and the biggest of those problems are the people who can't afford the basic drugs that have long outlived their patents and could be supplied for pennies per dose. The "moral hazard" here is the risk of becoming a moral monster who would let people suffer and die in the hopes that someday the drug companies will invent a miracle cure to satisfy the one-tenth of one percent of the wealthiest people who in some way are unhappy with their drugs now.

It's a heckuva way to run a railroad.

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