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Tuesday, January 29, 2013

Amgen Buying State Legislatures to Prolong Profit Stream

The whole idea of a patent system is that (1) the public gives the "inventor" a monopoly for a period of time (currently 20 years from the application date, with the potential for extensions based on processing delays), and (2) AFTER that time is up, the patented product may be produced by anyone.  The idea is that after the patent expires, there will be unrestricted competition and prices will fall.  And in principle it works -- that's why you can buy Prozac at WalMart for $4 a bottle, when it used to cost hundreds.

But the problem is that the makers of drugs make SO much money while the patent is still in force that  they do everything in their power to keep that cash stream alive, even after the product should by all rights have fallen into the public domain.  There is a long list of shenanigans employed by branded drugmakers to illegitimately prolong those cash flows.  And now I've learned of one more.

As reported in yesterday's NYT, Amgen and other biotech companies are now lobbying states to prevent generic competition AFTER the patent has expired.  The argument is that the generics are not producing IDENTICAL products, but are merely producing "biosimilars," and who can be sure that those biosimilars are safe?

If safety of biosimilars is truly an issue, that is yet one more argument for federal control of the pharmaceutical and biotech industries.  To effectuate the patent bargain, after the patent expires, the federal government should just step in and TAKE OVER the biotech company's manufacturing process, and sell the results at generic prices, possibly through generic companies.  If this is considered a "taking" then perhaps the biotech company should get some "just compensation," pursuant to the Constitution's takings clause.  But that "compensation" does NOT amount to a prolonged billion-dollar-a-year monopoly for technology that should be in the public domain. 

Interesting facts from the article:  

1.  Biotech drugs are drugs that are produced by cells, as opposed to synthesized in chemical reactions.

2.  Biotech drugs now amount to one quarter of the $320 billion annual spending on drugs in the U.S. And that percentage is growing.

3.  Biotech drugs are generally dispensed in the doctor's office, not through pharmacies.  Nevertheless, it's obviously worth the biotech companies' while to stop pharmacies from selling generics whenever they can.

4.  Amgen and Genentech are the two biotech companies that are writing the legislation.  As documented here and here, if Amgen were a human being, it would probably be in jail for fraud.  But since it isn't, its money is still good in state legislatures (and, of course, Congress).

5.  Two of Amgen's biggest sellers are the anti-anemia drugs Epogen and Aranesp. As documented elsewhere (see links in 4, above), Amgen has successfully and dishonestly caused both of these drugs to be over-prescribed.

6.  Other Amgen drugs are Enbrel, Neupogen, and Neulasta.  Enbrel is for psoriasis and rheumatoid arthritis; Neupogen and Neulasta protect chemotherapy patients from infections.  

7.  Genentech (owned by Roche) makes Rituxan, Herceptin and Avastin, all of which are top-selling anti-cancer drugs.

8.  The patents on all the drugs listed in 6 and 7, except for Enbrel, will expire very soon.

9.  The state legislators introducing the bills at issue admit that they were written by Genetech and/or Amgen.

10.  The Virginia house of delegates voted 91-6 in favor of such a bill. 




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