THE "FREE MARKET DRUG ACT"

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THE "FREE MARKET DRUG ACT"

Postby OddDuck » Thu Oct 07, 2004 1:08 pm

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.

The Solution:

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.
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Lowering Drug Costs

Postby oreo » Thu Oct 07, 2004 6:02 pm

As a Canadian, I am always interested in US drug cost issues. We have been hearing a lot about it in recent months. This is especially true in border areas where a lot of Americans come north to get their prescriptions filled in order to save money.

Interesting, no? The same drugs from the same companies are so much cheaper here. Why?

Well for one thing, Bayer can advertise aspirin until the cows come home BUT it (or any other drug company) cannot advertise any prescription drugs. Its amazing how much all those ads (especially magazines - you know the ones, one page to promote the drug and 2-4 pages of fine print to avoid lawsuits) actually cost. And what's the point - your Dr. probably doesn't get to watch a lot of TV or read any of those magazines.

There are other issues and factors as well but advertizing cost can be huge. And the patient pays for every single ad!
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Re: Lowering Drug Costs

Postby HarryZ » Fri Oct 08, 2004 9:08 pm

Carp,

One of the biggest reasons that drugs are far less expensive here in Canada than in the US is the fact that the government controls the price of drugs.

If a pharmaceutical company wants to increase the price of a drug, they first have to submit the increase to the government. They must indicate how much an increase they want and why it is necessary. With the large profit that drug companies already make on most drugs, it becomes very difficult to substantiate an increase.

In the US, it is a totally free market system and the companies will try and get as much as the market will bear. And that has translated into extremely expensive drug costs and the expensive advertising that goes along with it.

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Postby OddDuck » Sat Oct 09, 2004 4:16 am

Well, Harry..........that's correct, but there's a twist. It's the patents.

What happens that drives the costs up on drugs here in the U.S. is the fact that it is NOT free market UNTIL the patent given to the pharmaceutical company has expired. These patents can run for many years, thereby protecting the pharmas from competition for a long time, thereby allowing them to charge whatever they darn well please. They tend to justify that cost to the public by claiming that the profits go back into research. Well, as pointed out by the Senator, if that were the case, then why are we not seeing more advancement in research and NEW and better drugs being produced? As was noted, 70% of the so-called "new" drugs that the FDA approves are simply generic copycats. Not anything new out of all the "research" and clinical trials the pharmas are doing on our behalf.

Therefore, if you want or need a particular drug that is under patent, it'll cost ya. Plain and simple.

Once the patent runs out (which lasts for many years - what is it? Usually 20 to 30 years?), then other companies can start producing "copycat" generic drugs, which then helps to drive the cost back down, but by that time, the industry "going rate", shall we say, has already been set and there is no incentive, really, for the competition to try to drive down the cost of that drug, because they want to make the same profit(s).

As the Free Market Trade Act proposes, if we get rid of protecting pharma companies via eliminating patents on drugs, then right from the start, they will be entering a competitive free market system. Their monopoly on the drug is never given in the first place. If you double whammy the pharmas by also taking away their monopoly on decisions regarding research on top of it, then you have also taken away a big portion of their so-called justification for charging such high prices here in the U.S.

Our system needs to be overhauled. Sad, but true.

And as stated before, in the meantime, there are many drug treatment avenues that are being left unexplored simply because there might not be a large enough "profit margin" for pursuing it. Never mind what might actually be in the best interests of the patient.

Which brings me back around to pounding on the Boardroom table yelling "But what about the PATIENT?" :wink:

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Postby OddDuck » Sat Oct 09, 2004 4:39 am

I always have a follow-up comment......LOL

And speaking of clinical trials (especially the ones sponsored by the pharmas), and not being able to trust them completely.

Take me for example. I don't even have MS, it turns out. (I NEVER had any true clinical evidence of MS, either. No lesions, no inflammation, no O-bands in CSF, every lab test known to man is normal.) Yet, I was diagnosed with "definite MS" and on that very same visit received a sales pitch to participate in one of the pharmas clinical trials - still testing the interferons, by the way. At first I said yes. So I went through the first couple of visits, which were mainly tests, etc. that was given to set a baseline before starting on one of the injectables. Now, right away, (needless to say), there was a problem that had to be ironed out. I was suddenly pressed repeatedly to "claim" that I had experienced two separate exacerbations. Even after me saying repeatedly that if I had MS, it was SPMS or PPMS, because I had NEVER had separate exacerbations, I was still being pressed to claim or show that I did. I stuck to my guns, though.

In any event, when the neuro checked with the pharma corp. to see if someone with my "disease" presentations fit the criteria for the clinical trial, you know what he was told? He was told that I was "the perfect patient for the trial. Just what they wanted". I thought "what???" I didn't even fit the McDonald criteria for MS, nevertheless for the clinical trial. So, I was put right into it.

After that first clinical trial visit, though, my intuition clicked on and I suddenly doubted myself if I truly had MS, because I knew I did not have RRMS, so I pulled myself out of the trial right away. The moral of the story being: Of COURSE I was the perfect "patient" for the trial! I don't have MS! No lesions would EVER be found on my future MRIs, thereby indicating how "well" the injectable worked. All they would have had to do to make me "fit" the McDonald criteria for MS was somehow simply "show" that I had had two separate exacerbations separated by time, blah blah. I wouldn't cooperate with that, because it was not true!

So, that brings me to this. I cannot believe that I'm the only patient who is put into those trials (or is "fit" into those trials) by the pharmas, who doesn't even have MS! I don't know about you, but something smells REAL fishy here! I don't point a finger at the neuro, because frankly, I think he's just naive about things. BUT..........the pharma knew darn well what they were saying when they said "I was the perfect patient for the trial". Yep....I bet. I'd prove their drug "worked", huh?

You know, not long ago, I even posted on here, I believe, that it would be next to impossible to be "misdiagnosed" as having "definite MS". Now............I have to say, it might be more common than what we would care to believe.

So, how DO you regulate and/or how can you believe clinical trial results that come from pharma companies? If they can show that their drug(s) still work well (apparently in any shady way that they can), they keep their profits. I cringe when I think I might have been a part of deceiving the public on results of the injectables. I'm thankful every day that my intuition kicked in when it did.

Deb
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Postby HarryZ » Sat Oct 09, 2004 6:31 am

Deb,

Having a patent protection for a drug still doesn't remove the requirement for a drug company in Canada in having to apply for a increase in price. In the US, if a company wants to increase the cost of a patented drug, let's say by 20% because of advertising expenses or because it's selling very well and the company wants to make a windfall on it, they simply increase the price.

But in Canada, the company would have to apply to the government for the same kind of increase, showing justification. Of course, in this particular instance it likely wouldn't get the approval. So now you could end up with the same drug, made by the same company, costing at least 20% less up here. And that is what is attracting many people living near the border to cross over and buy their patented drugs in Canada.

Companies like Pfizer have already taken action to fight this. They have threatened (and in some instances already acted) Canadian distributors that all Pfizer drug supplies to them will be cut-off if they sell Pfizer drugs back to US citizens.

Ironically, a recent study in Canada showed that we are paying higher prices for generic drugs that come off patent than most industrialized countries in the world. Go figure!!

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Postby OddDuck » Sat Oct 09, 2004 6:40 am

Harry,

Yes, I understand, and I think we are basically saying the exact same thing. I was only referring to the U.S.

That's the loophole in the U.S. The freedom, if you will, that allows the pharmas to arbitrarily increase drug prices here in the U.S. anytime they want, whereas in Canada, you can get the same drug manufactured by the same pharma company for far less, since, as you pointed out, those same companies can NOT just raise cost at their own whim.

One of the (many) platforms (besides the war in Iraq) that our Presidential race is running on is allowing drugs from Canada to be imported here to the United States. John Kerry, the Democrat running for President, says "yes" to allowing Canadian drugs to be imported here.

Tell me THAT wouldn't put the pharmas in a "Catch 22"! You know what I mean? Their own drugs are basically being re-sold here in the U.S. That might put pressure on them to lower the prices here, since we'll just get them from Canada, anyway.

Actually, in a lot of ways, Harry, I think it's really hilarious! Tell me the pharmas aren't squirming just a little bit to figure out strategic ways to get out of THAT one! Or are lobbying like crazy to make sure a legislative Bill like that never gets put into law. HAH!

Deb
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Postby HarryZ » Sat Oct 09, 2004 8:17 am

Deb,

Actually, in a lot of ways, Harry, I think it's really hilarious! Tell me the pharmas aren't squirming just a little bit to figure out strategic ways to get out of THAT one! Or are lobbying like crazy to make sure a legislative Bill like that never gets put into law. HAH!


After last night's election debate and the very question of drug importation from Canada being asked to Bush and Kerry, I would love to see the "donation" accounting sheets of the big pharmas as to where their campaign dollars are going!!! :D

Harry
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Postby OddDuck » Sat Oct 09, 2004 8:20 am

Geez, Harry....you took the thought right out of my head!!! :lol:

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