Streamlined for Technology Transfer
What’s good for business isn’t good for people
Before the Bayh-Dole Act, taxpayer monies financed
discoveries and these were in the public domain. The National Institutes of Health (NIH) is
now the major distributor of your tax dollars for medical research (known as
R&D - Research and Development). Most
NIH sponsored work is carried out by universities. The drug companies claim that they spend
millions of dollars on research and development but actually the most money is
spent in advertising, promotion, marketing – and legal fees.
Drug company profits soared in 80s and 90s as well as
their political clout. They manipulate the FDA that is supposed to
regulate them. Bayl-Dole was meant to
stimulate the foundering generic industry by loosening up some FDA requirements. As we shall see, the laws did not level the
playing field or create fair competition.
The NIH enters into deals that directly transfer research
to industry. Small biotech companies – often founded by university researchers are
the new working model. They carry out
initial drug development and hope for lucrative deals with big pharma. There are no generic biotech products, so
monopoly rights are unlimited. It is no
wonder that large biotech companies are now members of the trade group
Pharmaceutical Research and Manufacturers of America (Phrma).
The 1984 Hatch-Waxman Act was also very favorable to big pharma. This act extended monopoly
rights for brand name drugs and lengthened their patent life. Big pharma is all about protecting exclusive
marketing rights.
The Basics
There are two forms of monopoly rights:
U.S. Patent and Trademark Office (USPTO)
and
Exclusivity granted by the FDA
These systems operate independently but act as backups to
each other
Molecules are researched that may cure or treat a
disease. These drug candidates are kept in vast libraries. Promising molecules or those already in use
are kept in a database. Only small
percentage are newly discovered or synthesized molecules. The FDA classifies
these as new molecular entities (NMEs). Others are new versions of drugs
already on the market and are called “self-originated NCEs”.
With the introduction of biotech companies, new molecules
can be synthesized and extracted from animal, plant or mineral sources. R&D in biotech companies focus on making
or modifying very large molecules like proteins or hormones by using living
systems – often with recombinant DNA technology.
Preclinical stage
In this stage, promising drug candidates are found and
studied via animals and cell cultures. A small fraction of drug candidates make
it through the preclinical stage and go on to be tested in humans.
Clinical Stage
Tested on humans
Only a small percentage of these make it to market
The clinical stage is regulated by FDA where drugs must be proven reasonably safe and effective.
Phase I
Give the drug to small number of volunteers to establish
safe dosages and study metabolism and side effects.
If it looks promising, the test stage leads to Phase II. (Exceptions
are drugs for serious conditions and medical emergencies which are fast tracked.)
This tactic is a new and creative way for
Pharma to push lucrative money makers on the market quickly -- like the Ebola vaccine. In this case, they created the
emergency, then were ready to offer a solution that would greatly benefit them
financially. The more we research and
learn about Big Pharma, the more we will conclude that MONEY, not people, are
their priority.
Phase II
Patients with the relevant disease or medical condition
are tested. The drug is given at various
doses and effects compared with those not given the drug. We have all heard of the placebo effect where
people will “feel” better if they believe a pill can help them – even if that
pill is made of sugar. Wouldn’t it be
great if big pharma’s pills were tested against natural cures? It won’t happen because that would
definitely not be good for their business or their profit margins! They rig the studies to their favor, of
course.
Phase III
Safety and effectiveness of a drug is evaluated in larger
number of patients. If all trials are successful, FDA approval follows.
Patents and Exclusivity
Drug companies usually obtain a patent on a new drug
before clinical testing begins. Patents protect companies. Clinical trials take
a few years and during this time the drug cannot be sold. Clinical testing is subtracted from the 20
year patent life. Drug companies find
ways to accelerate this testing period.
Drug companies do not have direct access to human subjects
nor do they employ physicians to do so. They can give grants to faculty
researchers to carry out clinical trials.
They often use contract research organizations (CROs) to gather
information. The CRO middlemen establish networks
of physicians to study drugs and collect information. Big pharma pays these contractors for that
information. Many big drug companies
have centralized patient recruitment offices that outsource much of this work to
CROs.
Health Advocacy Groups (HAOs) are created and paid for by
big drug companies to push the process along.
The groups call for new drugs to enter the market sooner and the ruse
works well. They can also be used by big pharma to stir up controversy about the effectiveness of generic counterparts.
Not all trials are registered with the FDA or NIH
Post Marketing or Phase IV studies
These drugs are already on the market. “Commitment studies” are used to find new
uses for old drugs and test their safety.
However, companies delay such tests, sometimes indefinitely, because they don’t want serious side
effects to be discovered. Though the FDA has
the authority to pull a drug from the market if the commitment study isn’t
done, they have never done so. There may
be thousands of these phase IV studies in any given year. In 2001 alone, there were 80,000 and the
number is sure to be much higher now.
The most common Phase IV trials are “surveillance
studies”. CROs pay doctors to put
patients on drugs and answer questions about them. Such a study may ask a doctor to start five
patients on a new drug. After 6 to 8
weeks, the doctor fills out a form,
returns it and then receives an “honorarium” payment that could be $500 and up. The summaries are short and simple and have
no scientific value. Doctors usually
make more money working for CROs than spending time with patients. Basically, doctors are paid to prescribe a
drug. The majority of phase IV studies
are never submitted to the FDA or published. They are all but unregulated.
Large advertising agencies are paid well by the drug
industry. They have purchased or
invested in CROs and MECCS (medical education and communication companies) Marketers can direct research toward drugs
they think will be big sellers. MECCs often ghostwrite articles in favor of
drugs. “Clinical research” and
“education” are merely marketing tools.
Loading the Dice
Sometimes patient volunteers are paid but more often, doctors
are offered large "bounties" by CROs to study human subjects. (In 2001, this averaged about $7,000 per
patient). Physicians in one trial were
paid $12,000 for each patient enrolled plus another $30,000 on the enrollment
of a sixth patient. I wonder how many patients
were enrolled that didn’t really need the drug that was being “studied”!
Monopoly Rights = Big Profits
Big pharma basically acquires monopolies via a government approved system – in the form of USPTO patents and exclusive marketing rights
granted by the FDA. Big pharma also receives tax credits worth billions of dollars
including 50% credit for the costs of testing orphan drugs – those with an
expected market of lower than 200,000 people.
Once a company loses exclusive rights to a drug, the FDA
permits generic versions to come on the market.
Brand-name drug sales plummet when this happens.
Keeping generics off the market, even for 6 months, can be worth
millions of dollars to Big Pharma.
Prescription drugs have a patent life of 20 years from
the date the application is filed with UPSPTO.
A patent can apply to:
Features of the drug – even coatings and coloring
The drug substance itself – the active ingredient
The method of use – mouth or injection
The formulation – including the manufacturing process
Patents can be obtained for different uses of the same
drug. For example, Prozac is patented to
be used for depression and then another patent is made to prescribe it for
obesity. Each of these patents, in turn, can have multiple other patents.
USPTO has incentive to grant such patents rather than
deny them because examiners are paid bonuses that depend on the number of
patents they process.
Exclusivity is granted by the FDA. It is given at the time a drug is approved
for marketing – after the primary patent is obtained. A company can market the drug for a certain period
of time and the FDA will not approve the same drug made by anyone else. This
period of exclusivity can be anywhere from 3 to 7 years. Even after that time is up, the FDA cannot
approve a generic drug if the relevant patent is still in effect.
Drug companies are supposed to list relevant patents with
the FDA in the Orange Book. These are
not all the patents on a drug – there can be many more. These are just the patents on the FDA
approved drug substance itself, its formulation and its approved use. However, determining what is a relevant patent triggers many lawsuits.
Big drug companies hope that controversies arise concerning if a relevant patent is still in effect. It doesn't mater if that patent is in effect or not. They can and often due sue generic companies for patent infringement anyway because this delays FDA approval of the generic drug for 30 months. That is 30 months more of profits for big pharma.
The first generic company to
challenge a patent would have six months exclusivity free from competition by
other generics once their product goes to market, even though they must wait over two and a half years to do so.
Pharma well knows the ins and outs of laws and
uses the loopholes to their favor. Brand-name
drug companies routinely file numerous patents on their money making drugs and these
can be in a series, spread throughout the life of the first patent. The patents cover every conceivable feature
of a drug. Exclusivity can be prolonged for years in this manner.
In 1997, the FDA Modernization Act added six more months
of protection if drug companies test their drugs on children – including drugs
used to treat adult diseases like high blood pressure. Yes it is unethical. Yes Big Pharma uses it every chance it gets.
Companies can also change their top-selling drugs in ways
that will add three more years exclusivity. They
will patent the trivial variation, seek FDA approval and promote their “new and
improved” drug. The gimmick works.
Brand-name companies may also pay generic companies to
delay their entry into the market or to keep prices high.
Marketing for Profit
For instance, Astra-Zeneca patented Nexium, which is a
form of Prilosec and received 3 years FDA exclusivity. They did everything they could to prolong their blockbuster Prilosec.
Prilosec made $6 billion in sales worldwide per year. It was approved by the FDA in 1989. The patent was scheduled to expire in October
2001 after a six month extension for pediatric testing. The company continued to file more patents in
the Orange Book that would extend patent protection until 2019. For each patent, they claimed 6 extra months
to test on children.
When Prilosec’s exclusivity approached its end, Astra-Zeneca
sued generic companies right and left, charging infringement. This tactic works and is commonly used. Finally in 2002, a generic version of
Prilosec arrived on the market with 6 months exclusivity. However, the generic price remained the same as the brand name.
Astra Zeneca then petitioned the FDA to convert Prilosec
from a prescription drug to an OTC product.
Under Hatch-Waxman, they received another 3 years of exclusivity for the brand name. FDA does not permit identical formulations to
be sold as prescription drugs and OTC drugs, so a slightly modified OTC
Prilosec version entered the market.
In the meantime, Astra Zeneca pushed its “new”
purple Nexium pill. Their advertising and marketing blitz paid off and consumers are happy to pay a higher price for a drug that is essentially the same as Prilosec OTC.
This is but one example of Big Pharma's business as usual. Drugs are a
commodity for sale. It is not about promoting better health for the patient - it is about promoting their product for sale and profit.
Quick fixes have consequences. Buyer Beware!
Further reading
Fierce pharma.com has quite a bit of good information
about Big Pharma marketing budgets v R&D
