Ok.......With one of my last posts, I noticed this "Free Market Drug Act" in legislation, so I looked it up.
Wasn't it Harry (or somebody in another thread who mentioned the research decisions being made by pharma companies?) Well, I found this new Act sort of intriguing. Here's the scoop. I'm going to highlight some interesting parts. This is from Congressman Dennis Kucinich's website:
Prescription Drug Patents
What is the best way to lower prices?
There are two major problems with pharmaceuticals today.
1. Pharmaceutical prices are high and getting higher. As hard as it is to currently pay for drugs, the Centers for Medicare and Medicaid Services projects that spending will rise more than 150 percent by 2013, to $520 billion a year. This is a cost that families cannot bear by themselves. It is also too great an expense for the government to afford, given current budget constraints. Millions of people will be forced to either forego lifesaving drugs, or bankrupt themselves trying to pay for them. In addition, rising drug costs are similarly driving up health care costs, which adds to the legions of uninsured in the US. The main reason that drugs are costly is that the government grants manufacturers patent monopolies, prohibiting normal market competition for long periods of time. These monopolies allow manufacturers to charge several hundred percent, sometimes several thousand percent more than the competitive market price. For example, some patent protected AIDS drugs originally sold at prices of more than $10,000 for a year's dosage. Generic producers, who manufacture and sell the drugs in a competitive market in other countries, are able to make a profit charging less $200 a year for the same drugs. Simply put, if drug manufacturers were operating in a free market like most other businesses in the US, drug prices would be significantly lower.
2. Pharmaceutical companies are putting out declining numbers of "breakthrough" drugs that represent large steps forward for public health. Instead, they frequently try to tweak a currently patented drug enough to extend the patent life so they can continue to charge prices at far above market value. According to the FDA, over 70% of new drugs are "copycat" drugs like Clarinex, a slightly different (and newer) version of Claritin. Claritin's patent recently expired. The result is too many drugs that simply make money but do not substantially contribute to our health.
In September 2004, I will introduce the Free Market Drug Act, which would effectively result in most major drugs being priced as generics by removing patent protection on pharmaceuticals produced with public funds. Furthermore, the bill would fund the world-renowned National Institutes of Health (NIH) to control and perform the research and development (R&D) on pharmaceuticals in the US. Some funds would be used to expand NIH's capacity to do R&D and other funds would be granted to pharmaceutical companies and universities who already have the infrastructure to do that research. But whenever a drug developed with public funds was ready to be marketed, instead of giving a single drug company the exclusive right to manufacture it, any qualified entity able to get FDA approval could manufacture and distribute it, introducing free market competition. Another advantage of this bill is that pharmaceutical companies would not make the decisions about which drugs to research based on which had the highest profit margins. Instead, some of the best scientists in the world at NIH would make that decision based on the greatest public health need.
In addition to enormous financial savings, the Free Market Drug Act will lead to the development of better drugs and better health care, since more openness in research will speed the research process. Furthermore, replacing government patent monopolies with a competitive market will eliminate the incentive for researchers to conceal and even distort research findings. The distortion and misrepresentation of research findings that results from the incentives created by government patent monopolies is a serious problem that has become a major concern of professional medical journals.
The savings from competition in the prescription drug industry would likely exceed $2 trillion over the course of a decade.
Q) Will this proposal ban patents?
A) No. However, if a company chooses to accept government funding for research, the patent will belong to the government.
Q) Will companies still be able to do drug research, development and manufacture on their own?
A) Yes. But they will need to compete with publicly financed drugs sold at competitive market prices. This will likely not be profitable. Instead, they will have to make their profit margins like most other companies that compete in the marketplace; by finding a way to manufacture the drug more efficiently than their competition.
Q) Is there any precedent for this in the US or elsewhere?
A) The Department of Energy and Department of Agriculture often subcontract research and development. No other country has used a similar system with prescription drugs because other nations balance patent monopolies with some system of price control.
Q) How would this system improve drug efficacy?
A) First, research priorities would be set according to national health needs, so funding would be concentrated in areas that address health needs instead of just life enhancements. Second, research would be made public, so studies that show lack of drug efficaciousness or even drug harm would be known. Currently, these studies are often shelved. Third, under this system, less promising avenues of research will be abandoned. This compares with the current system, where drug companies may continue down dead ends in the hope of being able to recoup some of their investment. Finally, the system would eliminate wasteful research on copycat drugs, which make up roughly three-quarters of new drugs approved by the FDA.
Q) The drug industry says that without patents and competition, the incentive for innovation will be reduced.
A) First, this proposed system of direct and public financing will foster competition between researchers. It will create competing research centers that have to produce in order to survive. Where certain government labs fail to perform as well as others, they could be eliminated and replaced based on review every 10 years.
Second, the industry has always held the assumption that is more innovative and productive than government efforts. On the contrary, government researchers have a much better track record for finding breakthrough cures than industry. According to NIH, "the rosters of those who have conducted research, or who have received NIH support over the years include the world's most illustrious scientists and physicians. Among them are 93 scientists who have won Nobel Prizes for achievements as diverse as deciphering the genetic code and learning what causes hepatitis. Five Nobelists made their prize-winning discoveries in NIH laboratories: Drs. Christian B. Anfinsen, Julius Axelrod, D. Carleton Gajdusek, Marshall W. Nirenberg, and Martin Rodbell."
Moreover, the industry itself is no model of innovation. According to the FDA, more than 70 percent of new drugs approved in the last decade do not constitute qualitative improvements over existing treatments (Baker and Schmitt, p.6). Recent trends show that fewer and fewer drugs are receiving approval - 17 in the last year, down from 24 in 2001 and 27 in 2000.
Q) What if a company decides to use government research and patent it?
A) The government, as the patent holder, would have legal standing to sue the corporation for infringement of patent rights. This legislation would also give legal standing to all prescription drug users, such as individuals, health insurance companies, and states.