Let Us Give Drug Companies a Choice
How does a 25 to 30% reduction in the cost of your most expensive prescriptions sound to you? This is the kind of savings that could result from giving drug manufacturers a choice in how they promote newly patented medications. The choice would be a long patent extension until the cost of bringing the new product from research to market had been recovered from profits. In return the manufacturer would refrain from promotion of that product directly to the public or to physicians by drug sales people who travel to physicians offices and hospitals to push the latest products. A couple of decades ago I checked this latter cost—about $10,000 per practicing physician per year in our country, now at least double that. Besides this cost, there is another more subtle costly result of marketing drugs to physicians.
Increasingly throughout my career as an internist, when I send a patient to a consultant, the patient is sent back to me with a prescription for the latest “me too” product entering this particular market. These are patented drug s with a similar chemical to innovative and popular new medicines. I feel cheated of the benefit of the consultant’s knowledge and experience because he seems too influenced by a recent sales pitch and knows little more about the new drug than I know.
Patients seldom feel cheated; they gained from the saved cost of free samples. But the reality is that the patient was actually cheated by the extra cost, over time, of a newly patented drug instead of an equivalent generic product, even though the generic had already been thoroughly proven safe by prolonged use.
The monetary cost of direct advertising of prescription drugs to consumers is smaller than the cost of samples and sales people-$4 billion per year compared to over $10 billion. However, there is a hidden cost to the public and physicians of this advertising, and it is not possible to audit. The hidden cost is the time spent discussing the advertisements the patient has seen instead of covering the main business at hand in more depth.
The beginning of this direct advertising of prescription drugs was by administrative rule change without public or legislative hearings, and it happened on Bill Clinton’s watch. New Zealand was the only other country to adopt this direct advertising, but only until about one year ago. The termination occurred as part of a comprehensive agreement with Australia to make the two countries compatible in the way they regulate drugs. Even so, the industry almost prevailed. Canada still prohibits advertising of prescription drug to the public, but enforcement has been lax since our defection.
Nevertheless, we can recover the enormous cost of bringing a new drug to market, currently nearly $1 billion. Since the majority of new such marketing attempts fail due to lack of effectiveness or due to side effects, we can safely increase this estimate several fold. This considerable extra cost could be accurately determined as a running average of the entire industry’s experience and added to the costs to be recovered for each successful product as mentioned above, thus rewarding efficient (and fortunate) companies.
Business as usual entails seventeen years of patent protection. Much of that time passes before marketing. The result is very aggressive promotion immediately after FDA approval with some consequences that we have already touched upon. Patients who are already doing well on previously available treatments should not be the first to take new medications. Initial post-marketing safety surveillance should proceed more slowly. This would greatly reduce the adverse outcomes of new drugs that fail soon after approval because of rare, but very severe, effects not observed during testing before market approval. Vioxx is the most recent highly publicized example.
A further incentive to induce most of the pharmaceutical industry to choose the low cost, extended patent choice instead of business as usual, would be to reward “breakthrough” drugs, those with a novel mechanism of action. A good way to accomplish this would be mandatory licensing with royalties paid to the “breakthrough” patent holder by those marketing “me too” drugs until the original drug’s development costs had been recovered.
These “me too” drugs are frequently superior to the original but seldom after the first three or four of them. We need incentives for innovative research. Too much of the public’s money is expended on chasing market share with new drugs that are essentially duplicates of those already on the market. The manufacturers and the public would benefit from the saved costs, both monetary and social, of not promoting new drugs that fail the post-marketing safety surveillance or are virtually duplicate effort. Under the present system, post-marketing safety surveillance of drugs does tend to be neglected and the FDA has not always been able to compel needed additional studies.
Another problem that could be mitigated by a similar manipulation of patent policy is the relative lack of incentives for industry to develop new antibiotics. The same could be said regarding conflict of interest in reserving the latest antibiotics for difficult infections not adequately treated by previously available agents. The introduction of a truly new antibiotic with a novel mechanism of action has become a rare event.
Faced with patent expiration, manufacturers opt for very vigorous promotion immediately after FDA approval. The result has been the early emergence of resistant organisms too soon after discovery of each new antibiotic with a novel mechanism of action. This problem was even more severe a few years ago when antibiotics were promoted to enhance growth of livestock. The reality was that the antibiotics promoted growth by limiting infections—you might say as a substitute for hygienic conditions.
This is how antibiotic resistant E coli 0157 became prevalent in hamburgers resulting in fatal human infections—more lethal because of antibiotic resistance. The germ was part of the steer’s intestinal flora and contaminated the meat during processing. The antibiotic resistance arose because of widespread use of antibiotics for “growth promotion” in most calves for several generations of calves. Of course, these calves acquired an intestinal flora resistant to these antibiotics and continued to harbor them until slaughter. Rare hamburger was most of the problem because it didn’t always get hot enough during cooking to kill germs and because the grinding dispersed the contamination, permitting more bacterial growth and because of larger doses of the infectious agent.
Deaths caused by germs resistant to all available antibiotics are increasing—an emerging major public health problem.
A more prolonged stopping the clock on patent expiration of new antibiotics (ten or fifteen years perhaps) would go a long way toward postponing the evolution of resistant organisms by making the economics of limited use of new antibiotics much fairer to the manufacturer. Almost all use of antibiotics with a novel mechanism of action should be limited to treatment of infections resistant to the previously available agents. All additional antibiotics with the same novel mechanism of action developed as “me too” drugs will have a very similar pattern of resistant organisms and should also be used circumspectly.
These extensions of patent protection would tend to get public and corporate benefits back in step. There is a precedent for this since a seven-year exclusive marketing privilege and other tax incentives were granted in 1983 for orphan drugs, which are useful only for rare diseases but are necessary nonetheless and deserving of incentives.
Patents really did originate to promote innovation for the benefit of inventors and society as a whole. So why not apply that logical thinking to life saving drugs.
John Frantz, MD
May 17, 2006