In keeping with my discussion about pharmaceutical companies and the costs to live – I responded to Forbes blogger Matthew Herper’s post (found at http://blogs.forbes.com/matthewherper/2011/05/09/stop-demonizing-drug-companies-over-pay-to-delay-deals/) with the following:
I could not disagree with you more Mr. Herper. These pay-to-delay agreements are harmful to consumers and the economy. I would agree with the FTC that these these deals are anticompetitive, violate antitrust laws, and preclude affordable medications coming to the market in a timely manner.
What you imply as a small impact on prescription drug spending – 1%, $3.5 billion a year is not chump change. Let’s consider a few statistics –
- 1/3 of Americans spend more than 10% of their income on prescription drugs
- Because of the expense, more than 25% of those prescribed a medication don’t take it and 23% cut their pills in half or skipped doses
In an economy where every cent counts, generics can be a life saver for some. I would challenge your statement that generics are priced “only a bit below” brand name prescriptions. Generics are 20-90% cheaper than brand name. That is a huge difference. And the savings are particularly needed as these companies drive up the prices of their products fretting over upcoming patent experiations. Perhaps the price differential does not mean a lot to you, but for many the ability to purchase a generic means the ability to remain healthy (and of course from that you can imagine the impact on society in terms of lost revenue or increased health care expenditures if one cannot afford their medications). It is not just a monetary issue – it is an ethical issue.
You imply that Big Pharma funding schemes will be affected. I would challenge that at several levels. These companies will be able to attract investors. Just by looking at your own company’s Forbes 500 list will show the sizable profits these companies enjoy – profits that continue to increase. Investors are likely to continue to invest in these profitable companies – granted I’m not expert on investing, but I bet that these profits will attract many. And I would thwart any argument that the reason they have these profits is because of pay-for-delay. It that is the case, I would like to see some numbers. Secondly, if these companies step up their research and development (where they are supposedly investing all their money) they will continue to attract investors. Certainly there has been a dearth of new ideas in the pipeline – but that just means more work – gosh forbid! There are plenty of ideas out there, incredible new discoveries every day. Sure, it’s hard to get these to market, but not impossible – not so difficult as to hurt their business and bottom line. Third, the waste in court fees and settlement fees only means more money pulled from research and development and out of the pockets of those who need these drugs. Let’s stop this frivolous spending on protecting a patent for longer than necessary and actually focus on what they are supposed to do – save lives by developing new treatments. Is that so much to ask? If these companies are allowed to continue pay-for-delay practices, competition will slide, there will be less incentive for companies to pursue other endeavors. That’s not a completely fair view, as they will definitely be seeking their next big blockbuster. Still, patents were meant to protect intellectual property to encourage competition. These companies already have enough protection, they do not need more without earning it.
I find it incredible that anyone could justify pay-for-delay practices. I am especially disappointed that you end with concluding with the point that it’s possible these “deals actually make it more likely that generic drugs will launch.” I would ask you precisely the difference in time it might take to settle a claim versus going to court over suits of patent infringement.
I am disappointed in your analyses of this issue that will have a greater impact on Americans whose lives being sacrificed in the name of monetary gain.
I would love to hear your comments on this matter. I think it’s a very important issue right now that many are unaware of.