Tag: "drugs"

A Grand Bargain for Intellectual Property in International Trade Deals?

vaccine-shotBloomberg View columnist Caroline Freund has proposed a thoughtful grand bargain for brand-name pharmaceutical firms’ data exclusivity in international trade deals.

Unfortunately, the column confuses two related but different issues: Patent protection and data exclusivity. The former is available to anyone who invents a better mousetrap. It is an important type of intellectual property (IP), and the U.S. leads the world in protecting inventors’ IP.

To Reduce Drug Prices, Solve R&D Crisis

A new NCPA study concludes that Congress must act to reduce the regulatory burden on pharmaceutical research and development.

Reducing the prices of specialty drugs requires improving the productivity of research and development (R&D). On that front, the news is sobering. Last December, Deloitte and Thomson Reuters examined newly introduced drugs from the 12 pharmaceutical companies with the largest R&D budgets.5 They found it cost $1.3 billion to bring one of these new compounds to market. However, the peak sales forecast for each of these drugs declined by 43 percent, dropping from an average of $816 million in 2010 to $466 million in 2013.

The high nominal prices of new drugs do not compensate for the smaller patient populations they target. Deloitte and Thompson Reuters estimate the internal rate of return (IRR) of R&D spending has dropped in half since 2010, from 10.5 percent to 4.8 percent. Sales of new drugs are not overcoming the loss of patents, weak pricing power for older drugs, or the reduced productivity of R&D.

Why are Health Insurers Persecuting Innovative Drug-Makers, Instead of Bloated Hospitals?

One constant refrain heard in national health policy circles is the need for “integrated” or “coordinated” care. To be sure, I have never heard anyone speak favorably of “disintegrated” or “un-coordinated” care. While there are many good-faith practitioners who do want to integrate and coordinate care for patients, these terms are often used to camouflage a more straightforward way to raise prices. Here’s an example from Bloomberg BusinessWeek:

money-burdenFor the past four years, Pennsylvania insurance company Highmark has watched its bills for cancer care skyrocket. The increase wasn’t because of new drugs being prescribed or a spike in diagnoses. Instead, the culprit was a change that had nothing to do with care: Previously independent oncology clinics and private practices have been acquired by big hospital systems that charge higher rates, sometimes three times as much, for chemotherapy drugs. “The site of care and the type of service provided does not change at all,” says Tom Fitzpatrick, Highmark’s vice president of contracting. “The only significant difference that we primarily see is the [patient] gets a wristband placed on them.”

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States Spent $7.7 Billion on Prisoners’ Heath Care in 2011

GOV065A new report from the Pew Charitable Trusts reports that 41 states experienced growth in their correctional health care spending from fiscal 2007-2011, with a median increase of 13%. Further:

…state spending on prisoner health care increased from fiscal 2007 to 2011, but began trending downward from its peak in 2009. Nationwide, prison health care spending totaled $7.7 billion in fiscal 2011, down from a peak of $8.2 billion in fiscal 2009. In a majority of states, correctional health care spending and per-inmate health care spending peaked before fiscal 2011. But a steadily aging prison population is a primary challenge that threatens to drive costs back up. The share of older inmates rose in all but two of the 42 states that submitted prisoner age data. States where older inmates represented a relatively large share of the total prisoner population tended to incur higher per-inmate health care spending.

OxyContin Abuse: Stopping the Dealers Helps; Suing the Drugmaker Does Not

One of the biggest challenges with the regulation of prescription drugs is how to prevent the abuse of addictive ones. OxyContin, a powerful painkiller is probably the best known example. There are two ways to reduce the abuse of OxyContin: Punish the inventor and manufacturer of this valuable medicine; or go after those to take advantage of addicts who need help.

HSAAlthough OxyContin is widely prescribed by physicians and valued by patients who need powerful pain relief, trial lawyers decided that the medicine, not the addiction, was the problem. Years ago, the decided they could make some money by suing the manufacturer, Purdue Pharma. Back in 2008, Heartland Institute’s Lawsuit Abuse Fortnightly reported on the cost of this effort:

If anyone doubts tort claims are a burden on American drugmakers, consider the fees for Purdue Pharma L.P.’s defense of 1,400 lawsuits in 32 states, alleging that OxyContin, its prescription painkiller, is addictive.

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Colorado Patients Win the “Right to Try” New Medicines Before the FDA Approves Them

Earlier this month, Colorado governor John Hickenlooper signed the nation’s first “right to try” law. The law allows a patient suffering from a disease, for which no medicine has been approved by the FDA, to try an experimental new medicine before the FDA approves it. The law allows, but does not force, drug-makers to provide their experimental drugs to patients. Other states, such as Louisiana and Missouri, are set to follow.

These patients are in dire straits. They suffer from diseases for which there is no other cure, and have short life expectancies. Most of us cannot imagine being in their position: They are willing to take far greater risks than most would accept, in their search for a cure.

Although the Food and Drug Administration (FDA) has an exemption for “compassionate use”, that exemption requires jumping through too many bureaucratic hoops to be useful. So, scholars at the Goldwater Institute developed the idea of state “right to try” laws that would enable residents to use experimental new drugs without FDA approval.

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