TAKING PITY – from Jenny Thompson of the Health Sciences Institute
September 19, 2002
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Dear Reader,
Sometimes it seems like international pharmaceutical companies just can’t catch a break. This past June I told you about a couple of tough hits the drug giants recently had to endure. Congress was hounding them with the Greater Access to Affordable Pharmaceuticals Act, designed to close some legal loopholes and make them let go of their stranglehold on expired patents. Then on July 1st, a new set of voluntary guidelines went into effect that called for pharmaceutical salespeople to cut back on the gifts, meals, sports event tickets, “consulting” gigs and other perks they’ve used to encourage doctors to prescribe their products.
So have you been lying awake at night wondering how in the world these beleaguered drug giants are getting along? Well, don’t you worry. They’ve been doing just fine. Let me bring you up to date about how the poor wretches have been coping.
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Extensions that keep on going, and going, and going…
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“Pretty in Pink” was the title of the 6/18/02 e-Alert about a tricky little move that drug companies have been using to extend the patents on their premiere, money-making products. And who can blame them for trying? They spend millions, sometimes billions of dollars to produce a best selling product, and then as soon as they get a patent, the generic drug companies start laying plans to move in when the patent expires. At that time, the generic versions of the drug hit the market and the former patent holder can only stand aside as the profits of its former gravy train product start rolling in for someone else.
Did I say, “stand aside”? What I meant to say was: “launch a battalion of attorneys to sniff out and pry open every available loophole.” Which is their right, of course. After all, exploiting loopholes is a great American pastime. But when does too much become just way too much? When even the U.S. Senate takes notice.
In June I told you about how a patent holder can claim that its drug has a new use or a newly added chemical property, and based on these claims, the FDA will often grant a patent extension of 30 extra months even though the change in the product may be only superficial. Eli Lilly, for instance, took their superstar workhorse, Prozac, gave it a different color, and under a new name offered it as a relief to premenstrual irritability. And for their efforts they got a big O.K. on that from the FDA.
In the meantime, drug companies also found that they could extend a patent by claiming that the generic manufacturer of the drug had violated a regulation. What specific regulation was being questioned didn’t matter because, simply by asserting the claim, a 30-month patent extension was automatically granted. In addition, if a drug company had more than one patent on a drug, they could get more than one extension by making additional claims. That’s where the Senate drew a line in the sand and passed a bill designed to cut off the drug companies at only one 30-month extension.
But those drug company lobbyists and legal teams don’t go and get all submissive when the Senate says, “Stop.” No way. A Senate bill is nothing more than a wake-up call to them.
The Congressional Budget Office (CBO) has estimated that if the Senate bill becomes a law, it could save consumers as much as $60 billion over the next decade. And the drug companies would still be able to defend their patents. Everyone wins, right? Well, no. Because if you’re a pharmaceutical company this is what you hear in that CBO statement: the Senate is allowing consumers to take away $60 billion that is rightfully yours. But consumers wouldn’t be the only winners. A number of large corporations would reap huge financial benefits from the passage of this bill by reducing the cost of company health plans. As a result, some of those corporations lobbied in favor of the legislation. But some of those corporations forgot that they had business partners who were drug companies. Oops.
Georgia-Pacific Paper Company, for instance, was about to conclude a three-year sales deal with Eli Lilly, when it suddenly found that Lilly was not pleased that G-P was a member of Business for Affordable Medicine (BAM). (Affordable medicine! What were they thinking?) Georgia-Pacific saw the light and asked that its name be withdrawn from the BAM web site. Eli Lilly reps denied that they pressured G-P, but admitted that they do have a policy of contacting business partners to “explain” why they don’t support the Senate bill. (I can’t help but wonder if that “explaining” session might have resembled a scene out of “The Sopranos.” )
Meanwhile, it must be gratifying to the entire pharmaceutical industry that Verizon Communications, Marriott International and United Parcel Service have all pulled back on their support of Business for Affordable Medicine, as well as the Senate bill. Apparently they just needed the situation “explained” to them.
If you’d like to see a list of the companies still requiring further explanation or more details on the pending legislation, you can visit the web site maintained by the Business for Affordable Medicine (www.bamcoalition.org ).
Next week I’ll have further reports from the front lines of the drug industry’s ongoing battles. I’ll give you an update on the Pharmaceutical Research and Manufacturers of America (PhRMA) guidelines that went into effect last summer to govern the relationships between drug companies and physicians. And I’ll also tell you the tale of a former senior consultant to the FDA who now claims that the government agency often sacrifices safety for speed in the approval of new drugs, especially when “user fees” are changing hands. It just keeps getting better and better. Or, rather, worse and worse.
Sources:
“Big Drug Makers’ Tactics” the Washington Post, 9/16/02Copyright (c)1997-2002 by www.hsibaltimore.com, L.L.C.