JustCare

Tag: Patent

  • Why do people pay so much for Humira now that it’s off-patent?

    Why do people pay so much for Humira now that it’s off-patent?

    Humira, the exorbitantly priced drug taken by millions of Americans, finally lost its patent at the end of 2022, five years later than in Europe. But, even though biosimilar drugs are available, people’s out of pocket drug costs for this drug continued to be high. The drug rebate system in the US benefits drug middlemen and insurers and hurts patients, reports Joshua P. Cohen for Forbes.

    In short, pharmacy benefit managers (PBMs) make a fortune negotiating drug discounts from manufacturers. They usually see these discounts in the form of rebates, which they can pocket and/or share with the insurers offering prescription drug coverage. Americans rarely see the benefits of these rebates.

    Moreover, PBMs, which determine which drugs an insurer covers on its formulary and at what copay, can opt not to include drugs on the formulary. So, Humira’s manufacturer, AbbVie gave PBMs a huge rebate to include Humira on their formularies. The PBMs could then opt not to include biosimilar equivalents on their formularies or to make the biosimilars more expensive to enrollees, in order to maximize profits.

    That appears to be what’s happening. PBMs are not making it easy and inexpensive for people to get a biosimilar drug, even though there are more than ten of them available on the market. These biosimilars had only two percent of market share last March, after being available for 15 months.

    Now, more people are taking a biosimilar of Humira. The big PBMs are finally offering biosimilars. But, CVS and Express Scripts, two PBMs, are doing so with a biosimilar from which they receive a co-branded licensing fee and discounts, in order to continue to maximize their profits from the drug. They steer their customers to their biosimilars, which are often more costly than others.

    What you can do? Shop around. Check out Mark Cuban’s Cost Plus Drugs, Costco and other sources for a lower-cost biosimilar.

    Here’s more from Just Care:

  • One way to lower the cost of biologics

    One way to lower the cost of biologics

    Peter B. Bach and Mark R. Trusheim offer a proposal to lower the cost of biologics in an op-ed for The New York Times. The authors recognize that “competition” will never lower the price of biologics, or most other drugs for that matter. Their solution is to set the price of biologics at  the cost of manufacturing them plus 10 percent once their patents expire.

    Biologic drugs are made using living cells and can be self-administered by injection or administered by a doctor. They cost the US billions of dollars a year; but, they can extend people’s lives significantly. Herceptin, which helps people with breast cancer, and Humira, which helps people with rheumatoid arthritis, are two examples.

    Because pharmaceutical companies are granted patents on new biologics, they can set prices for these drugs sky high. The patent life is supposed to allow the manufacturers to profit from their innovations. And, it is supposed to end and lead to competition that drives down prices over time.

    Bach and Trusheim explain that the problem with biologics is that they are not simple to manufacture. Competition, therefore, is not as likely in the biosimilars (generic alternatives to biologics) marketplace as in the regular prescription drug marketplace. Moreover, to the extent there have been competitive biosimilars, they have not successfully lowered the drug’s price. So, the price of biologics remain sky high.

    Just to say it, competition is woefully lacking in the prescription drug marketplace writ large. In today’s world, there are many generic drugs that are still priced well-above what they should be priced. Competition in the prescription drug market often does not work to bring down prices.

    Through legislation, Congress has tried to create a competitive market for biologics and has failed. More than eight in ten biologics that could have biosimilar competitors do not. Biologics need to be affordable.

    Bach and Trusheim propose that Congress require pharmaceutical companies to lower the prices of their biologics once their patents expire to 10 percent above their production cost. That reform would reduce the price of biologics significantly. Good luck getting this law enacted and, if enacted, figuring out manufacturing costs for each biologic.

    That said, the Washington Post reports that HR3, the prescription drug pricing bill that passed the House in 2019, has a chance of getting passed in this Congress. It would lower the price of 350 of the most commonly used prescription drugs (50-250 a year) in Medicare and private insurance. The price of a drug would be no more than 120 percent of what six other wealthy nations pay (Australia, Canada, France, Germany, Japan and the United Kingdom) over the next ten years. For some inexplicable reason, it would not lower drug prices for the uninsured.

    Here’s more from Just Care:

  • Drug prices: It’s time for the federal government to step in

    Drug prices: It’s time for the federal government to step in

    Fran Quigley writes for Common Dreams about the need to end pharmaceutical company monopolies if drug prices are going to come down. The federal government right now could exercise its “march in” rights and do just that if it chose to. But, it is so beholden to the pharmaceutical industry, it is not clear when it will.

    We do not have a free market for prescription drugs. Pharmaceutical companies have monopoly pricing power for brand-name drugs only because Congress has given them patent protections. Without those protections, drug prices would come down substantially.

    It costs drug companies pennies to manufacture a drug. But, because of their patent protections, pharmaceutical companies can charge prices that are literally thousands of times more than it costs to manufacture and distribute the drugs. And, insurers pay them; they profit from these high prices.

    Today, we are paying for the discovery of many drug innovations, from which pharmaceutical companies profit handsomely, with our tax dollars. The National Institutes of Health funds most drug research. In fact, it has funded research for every new drug developed in the last ten years.

    The consequence of pharmaceutical patent protections: A large proportion of Americans cannot afford the medicines they need.

    The House of Representatives passed HR3, which would allow the government to negotiate the price of hundreds of drugs over the next 10 years. And, it would limit the price of these drugs to around what other wealthy countries pay for them. But, the Republican-controlled Senate has let this legislation sit on the cutting room floor.

    Until HR3 or other legislation is enacted to lower drug prices, the Department of Health and Human Services should exercise its power to make drugs affordable for everyone. It has the power to issue licenses to other drug companies to manufacture and distribute drugs that are priced too high–“compulsory licensing” power. The government also has the power to directly manufacture these drugs. Either way, the patent holder is paid a fee. However, the government has not used this authority.

    The government’s power stems from the Bayh-Dole Act of 1980. It gives the federal government “march in” rights to issue a compulsory license for any drugs discovered with federal funding. The only condition is that the drug must be deemed not to be available on “reasonable terms.”

    We should also nationalize the vaccine industry and give government the ability to innovate and produce critical medicines. By so doing, we would not have to rely on the pharmaceutical industry for critical drugs.

    There is no reason we need to be beholden to Big Pharma. The US has used compulsory licensing as a threat many times before. In dozens of instances, prices have come down. But, President Trump’s administration won’t use it or even threaten to. Instead, they force millions of Americans to go without needed medicines they cannot afford.

    Here’s more from Just Care:

  • Coronavirus: Republicans in Congress side with Pharma, won’t block price-gouging for COVID-19 drugs

    Coronavirus: Republicans in Congress side with Pharma, won’t block price-gouging for COVID-19 drugs

    You would like to think that everyone in Congress would stand behind basic principles laid out by House Representative Jan Schakowsky (D-IL) and her colleagues in Congress to ensure that all novel coronavirus treatments are priced fairly and available to everyone. But, a group of Republican lawmakers, in partnership with Pharma, are doing nothing to block price-gouging for COVID-19 drugs and vaccines, Sharon Lerner reports for The Intercept.

    Rep. Schakowsky and fellow House Democrats want reasonable prices for COVID-19 vaccines and treatments. The costs of research and manufacturing for these treatments should be public. Pharmaceutical companies should not have control over how to scale up production of these drugs or who has access to them. And, during this pandemic, pharmaceutical companies should not be able to profit indiscriminately.

    Conservative organizations are daring to suggest that ensuring these drugs are affordable and available is “dangerous, disruptive, and unacceptable.” In fact, it’s these arguments that are dangerous, disruptive and unacceptable. The groups suggest that pharmaceutical companies will harm people with COVID-19 if they are not able to profit handsomely from these drugs. But, lowering drug prices will not affect innovation.

    Thirty-one conservative organizations reject the value of ensuring everyone access to COVID-19 drugs and keeping pharmaceutical companies from setting high prices for them. The Hudson Institute, the Council for Citizens Against Government Waste, and Consumer Action for a Strong Economy, many of whom are supported by Pharma, are among those conservative organizations opposing fair pricing for these drugs.

    It should be said that taxpayers have supported the research that is responsible for the vaccines now in clinical trials. Notwithstanding, Pharma insists that it would not be producing these drugs if it didn’t have intellectual property rights–patents–to them.

    To be clear, pharmaceutical patents are the problem. They confer monopoly pricing power on pharmaceutical companies. They do not allow for fair prices. They undermine access to needed treatments. They hurt Americans. A November 2019 Gallup poll found that 34 million Americans knew someone who had died because he or she had not gotten a needed drug. It also found that 58 million people could not afford their prescription drugs. Drugs don’t work if people cannot afford them.

    Other wealthy countries are working together to combat COVID-19. The World Health Organization is moving to ensure that research and data related to COVID-19 is not proprietary. President Trump says that the US will withdraw from the World Health Organization.

    To date, Pharma lobbyists have succeeded at keeping reasonable COVID-19 drug pricing legislation from being enacted as part of stimulus packages. How many lives will be lost if they continue to succeed?

    Here’s more from Just Care:

  • Coronavirus: Federal government should reconsider drug research incentives to prioritize public health

    Coronavirus: Federal government should reconsider drug research incentives to prioritize public health

    A new report from Public Citizen lays out the reasons for concern about the new coronavirus and the likelihood of future pandemics. In short, the US does not have a good system in place to develop treatments or vaccinations for these viruses. To address this problem, Public Citizen makes the case for changing the way our government incentivizes research and development so that the public health becomes the chief priority and not corporate profits.

    Over the last 20 years, we have now seen three different instances of coronavirus spreading around the world and causing grave harm to people. We had SARS in 2002, severe acute respiratory syndrome. We had MERS in 2012, Middle East respiratory syndrome. And, we have the novel coronavirus now.

    Government-funded research to develop tests, treatments and vaccines that protect against coronavirus disease is critical. And, the National Institutes of Health has been funding that research since 2002. All in, the NIH has invested more than $684 million in this research.

    But, we still depend on big Pharma for treatments and vaccines to protect against coronavirus disease, even though pharmaceutical companies have not been investing in this research to any significant degree, participating in just six clinical trials. We must stop relying on these for-profit companies to provide us with the treatments we need for novel viruses and infections. Even when they have treatments, we cannot count on pharmaceutical companies to provide them at an affordable price.

    Right now, to encourage pharmaceutical companies to undertake critical research, the US government gives them patent monopolies, allowing them effectively to set prices. The goal is to incentivize them to invest by promising that they will be able to secure a reasonable profit from a successful drug. But, instead, pharmaceutical companies with successful drugs use their monopoly power to drive drug prices sky-high and keep generics from entering the market. Moreover, they market their drugs heavily in cases where other less expensive drugs will provide better treatment.

    Our patent system induces pharmaceutical companies to develop drugs that can earn them the greatest profit–such as cancer drugs–rather than drugs that treat the greatest needs. Cancer drugs now have an annual average price of $149,000. It hardly matters to a pharmaceutical company that its new cancer drug does not deliver a better benefit to patients than other drugs already developed.

    Pharmaceutical companies can make killer profits if they focus on developing drugs to treat chronic conditions, often regardless of their safety or efficacy. A Government Accountability Report shows that the 25 biggest pharmaceutical companies brought in on average twice the profits as the biggest 500 companies!

    Vaccines and antibiotics, in stark contrast, are far less profitable than cancer drugs and drugs for other chronic conditions. One-time cures deliver less revenue than medicines that are taken in perpetuity. Put differently, developing drugs to treat infectious diseases is not a good business model. Consequently, pharmaceutical companies have few in the pipeline.

    In short, we cannot count on the pharmaceutical industry for treatments for infectious diseases and drug-resistant bacteria. So, what is to be done? Without new antibiotics, a U.K. report found that antibiotic-resistant bacteria could kill 10 million people a year by 2050.

    We must stop giving pharmaceutical companies monopoly pricing power on their drugs. The lack of available treatments for the novel coronavirus demonstrates that our research model is broken and that we need a new model. Perhaps the government should be manufacturing drugs as well as paying for research and development. Or, it should be giving licenses to whichever companies want to manufacture a needed drug in order to drive competition.

    We might also consider separating research costs from the prices charged for drugs in order to ensure everyone can benefit from needed drugs—an idea that enjoys support from some on the ideological right and the left.

  • Democrats in Congress looking to end drug company patent abuses

    Democrats in Congress looking to end drug company patent abuses

    One big way to bring down the cost of prescription drugs is through changing the way the patent system works for pharmaceutical companies. Drug patents effectively confer monopoly pricing power on pharmaceutical companies. Stat News reports that a group of Democrats in Congress are looking to end drug company patent abuses.

    Historically, pharmaceutical companies have been able to find ways to extend their patent protections. They have led lawmakers to mistakenly believe that they need the patent protections–they need to be able to set drug prices sky high–in order to invest in innovations. But, the data show otherwise.

    This is really the first time that policymakers have taken on the drug companies’ power to set drug prices. Of note, compulsory licensing is accepted by Republican and Democratic lawmakers in the states. The National Governors Association endorsed a “compulsory licensing” proposal that is not unlike language in drug price negotiation bills introduced by Sen. Bernie Sanders (I-VT) and Rep. Ro Khanna (D-CA), and by Rep. Lloyd Doggett (D-TX).

    The Bayh-Dole Act permits compulsory licensing for the public health and safety, but it has never been used. Health care advocates have been calling for its use to help ensure critical medicines are affordable. But, the NIH has never wanted to step in. It does not want to be in the business of controlling drug prices.

    Some expect that, if HHS has compulsory licensing as a stick to bring down prices for drugs that are priced excessively, drug companies will come to the bargaining table to negotiate drug prices. They will not want the government to break their monopoly pricing power.

    If you want Congress to rein in drug prices, please sign this petition.

    Here’s more from Just Care:

  • Pharma is undermining the discovery of new drugs

    Pharma is undermining the discovery of new drugs

    Mariana Mazzucato’s op-ed in the Washington Post offers yet another reason why the federal government should be regulating drug prices. Pharma is not investing a meaningful amount of its enormous profits on drug innovations. In fact, Pharma is undermining the discovery of new drugs that we desperately need.

    According to Mazzucato, the data show that nearly 80 percent of the new drugs that the FDA approves are variations on drugs that have already been on the market. And, even when the drugs are truly new, pharmaceutical corporations are not making new drug discoveries to help people with diseases where they cannot profit handsomely. Just one in 25 approved drugs around the world between 2001 and 2011 were aimed to help people with rare diseases.

    Currently, it is legal for a drug company to run out a drug’s patent over 20 years, take that drug off the market to prevent generic competition, and reformulate its drug so that it is administered differently or at different frequencies. It can then get a new patent for its reformulated drug and extend its ability to control the price of the drug. Wherever, possible, that is what drug companies do.

    How can we address this problem? The government should take a mission-oriented approach for the research and development of new drugs, much as it does for the development of breakthrough technologies for national security through DARPA, the US Defense Advanced Research Projects Agency. It should use taxpayer money for the public good, to benefit taxpayers–to drive important new drug discoveries that are needed and to ensure that the new drugs are priced fairly. That’s how the Internet was created, along with the microchip and other major technological advances. 

    We need the US government driving critical medical breakthroughs. The US Department of Health and Human Services (HHS) should be promoting health care innovation, targeting the kinds of discoveries we most need. A well-functioning HHS would have more leverage over how its corporate health industry partners acted for the public good. HHS would ensure more transparency among pharmaceutical companies, so that the public better understood their costs, investments, and profits. Finally, HHS would demand fair drug prices. 

    Today, pharmaceutical companies have far less financial incentive to develop drugs that cure diseases than to develop drugs that people must take for the rest of their lives to control their diseases. It is usually more profitable to keep someone on a drug for decades than to provide the person with a drug that ends their disease once and for all. Goldman Sachs analysts and others should not be asking, “Is curing patients a sustainable business model?”

    We need to put patients ahead of profits. It is a matter of our health security and, as such, a matter of national security. 

    Here’s more from Just Care:

  • Let’s have a prescription drug public option

    Let’s have a prescription drug public option

    also, by Stephanie Taylor, originally published in The American Prospect.

    Kara Eastman, the Democratic nominee in Nebraska’s Second Congressional District, tells a story while campaigning about visiting her mother while she was dying from cancer. Her mother’s medicals bills were stacked so high on the kitchen table, Eastman says, that when she visited, they couldn’t see each other through the piles. Just one of her mother’s pills cost $2,500 a month.

    Eastman decided to run for Congress to offer alternatives to the skyrocketing cost of health care. She campaigns calling for Medicare for All and further solutions to the crisis of unaffordable prescription drugs. Her message is resonating. She beat a well-known opponent in her primary by a few hundred votes.

    Spending on prescription drugs is growing faster than any other sector of our health-care system. Drug companies, meanwhile, are raking in record profits, far higher than those in other industries—and they are spending considerably more of it on buybacks and dividends than on research and development. Most importantly for their bottom line, they are breaking records with their spending to influence Congress to protect their monopolies.

    Drug company revenues soared from $534 billion in 2006 to $775 billion in 2015. That’s billion with a “b.”

    According to a study by researcher Adam Gaffney, Americans spend more on outpatient drugs than the residents of any other industrialized nation—$1,026 per capita annually. The average in advanced industrial nations is $515; in Denmark, it’s just $240. The problem isn’t that Americans use four times the drugs that Danes do; it’s that drug prices are much higher in the United States than anyplace else. In 2014, a daily 50-unit dose of insulin glargine cost $186 a month, after applicable discounts, in the United States—but only $63 in the United Kingdom and $46 in France.

    In fact, U.S. taxpayers are paying twice. First, their taxes fund the research and development of new drugs: Federally funded studies contributed to the science behind every single one of the 210 drugs approved between 2010 and 2016. Taxpayers, for example, funded the development of Crestor, a popular medication to lower cholesterol. Now Crestor is sold by the private pharmaceutical giant AstraZeneca, which made over $16 billion in profits on Crestor alone during a three-year period.

    It’s clear that simply strengthening regulations on pharmaceutical corporations is not enough. Such corporations will prioritize lining their pockets over saving the lives of everyone who needs their medications, when the laws permit that—as they do in the United States. And when they do invest, they will always invest where there is the greatest potential for profit, not where there is the greater potential benefit to the public health.

    One way to address that dilemma is to create a taxpayer-owned drug company to produce and distribute medications at affordable prices—especially drugs that have been developed with U.S. taxpayer dollars. Unlike private corporations, this public drug company would focus on developing drugs based on public need rather than perceived profitability. The company could use private contractors to develop and manufacture the drugs, but it would own the patents and therefore ensure that everybody has access to them. Economist Dean Baker has pointed out that this type of model is how the Department of Defense operates to create many weapons of war.

    The United States would not be the first country to create a national drug company. Brazil, Cuba, South Africa, and Sweden all have publicly owned drug companies. While there would be a cost to setting up a public drug company, Baker and others have shown that the savings on drug prices in the United States could fully offset the added costs of a such a company. Depending on the scope of that company, Baker has shown savings of hundreds of billions of dollars per year.

    This is not just good policy. It’s good politics, too.

    The Progressive Change Campaign Committee (co-founded by one of the authors) recently polled a cross-section of Republicans, independents, and Democrats in swing and Republican-leaning congressional districts on support for the idea of creating “a publicly-owned not-for-profit pharmaceutical company to compete against private drug companies, to create more competition in the marketplace and stop big drug companies from jacking up prices for our seniors.”

    In the Third Congressional District in Kansas, currently represented by Republican Kevin Yoder, 61 percent said they support the idea, 23 percent are opposed, and 16 percent are not sure.

    In the First Congressional District in Wisconsin, currently represented by Republican Speaker Paul Ryan, 69 percent support the idea, 20 percent oppose it, and 11 percent are not sure.

    In the Third Congressional District of New Jersey, currently represented by Republican Tom McArthur (who introduced the bill that gutted much of the Affordable Care Act), 66 percent support the idea, 19 percent oppose it, and 14 percent are not sure.

    These are overwhelming bipartisan numbers that reflect the impact that big pharma’s greed is having on Americans across the country. Families everywhere are struggling to absorb the skyrocketing cost of prescription drugs—drugs that were often developed with public money in the first place.

    There is no good reason or justification for continuing with business as usual. We’re calling for a public drug company that allows us to keep life-saving technologies developed with our dollars in the public domain—and get them into the hands of everyone who needs them.

    Here’s more from Just Care:

  • Governors’ association says US should break drug patents through compulsory licensing for high cost drugs

    Governors’ association says US should break drug patents through compulsory licensing for high cost drugs

    The National Governors Association (NGA), a conservative body, has issued a report in support of compulsory licensing  for high-priced drugs, writes Nicholas Florko for IWP News. In simple English, the NGA recommends that the government step in and break prescription drug patents for essential drugs when their prices are unreasonably high.

    If there is a public health crisis, compulsory licensing is needed to ensure Americans have access to expensive drugs. Compulsory licensing is already permissible, and has been for more than 50 years, under 28 USC 1498, but it has not been used to break a drug patent since the 1960’s. The US Department of Defense has used 1498 in a few instances: for waste-removal techniques, night vision goggles and for verification of electronic passports.

    Under the compulsory licensing law, the federal government can manufacture the patented drug or contract with an outside company to manufacture the drug. The drug maker that owns the patent has the right to sue the government for compensation.

    The federal government also has “march in” rights, which enables it to bring down the cost of excessively priced drugs that have been developed with government funding. The federal government has never exercised this authority.

    Representatives of 11 states drafted the NGA report, and the recommendation supporting compulsory licensing as a best practice in certain instances was not unanimous. Some members believe it would thwart innovation, even if without it people lack access to critical drugs. Other members were concerned that the federal government would never use this tactic to bring down prices, a reasonable belief given that it has not done so in more than 50 years.

    Here’s more from Just Care:

  • Multiple patents drive up drug prices

    Multiple patents drive up drug prices

    Many prescription drugs have patent protections that deliver monopoly pricing power to their manufacturers for far longer than the 20-years intended by the US patent law. A recent report by I-MAK finds that the top 12 drugs in the US have an average of 71 patents each. Multiple patents drive up drug prices in the US. Not surprisingly, Americans are struggling to afford critical medications.

    In the last six years, prices on these 12 top-selling prescription drugs have increased an average of nearly 70 percent. Four of these drugs have seen their prices more than double since 2012–Lyrica (163%), Enbrel (155%), Humira (144%), and Lantus (114%).

    And, four of these 12 drugs have already benefited from patent protection for 20 years. Still, their manufacturers continue to seek patent protections for many more years–Herceptin, Rituxan, Biogen, Enbrel and Remicade. This practice of extending patents through modest changes to a drug is called “evergreening.”

    AbbVie manufactures Humira, the top-selling drug in the US. It has 247 patent applications for Humira. Roche/Genentech first filed for patent protection for Herceptin, a cancer drug, in 1985. Today, it continues to file patent applications, which could extend its monopoly pricing power as long as 48 years, until 2033.

    We need to reform the patent system and stop these patent abuses. We need generic competition in the prescription drug marketplace. It could help drive down drug costs. For now, 19 million Americans are forced to buy their prescription drugs from abroad, where prices are significantly lower.

    If you believe Congress should rein in drug prices, please sign this petition.

    Here’s more from Just Care: