Wednesday, November 01, 2017

          Why do drug prices remain so high?

          "Because drug companies block competition," says Professor Feldman in a new study that examines all drugs on the market between 2005 and 2015, identifying and analyzing every instance in which the company added new patents or exclusivities. 
          Sample alt tag.
          Why do prices stay high? Why can't people get their medicine? "Because drug companies block competition," says Professor Feldman.

          A new study by Professor Robin Feldman examines all drugs on the market between 2005 and 2015, identifying and analyzing every instance in which the company added new patents or exclusivities.

          "Why do drug prices remain so high?" asks Feldman in May Your Drug Price Be Ever Green. "Even in sub-optimally competitive markets such as health care, one might expect to see some measure of competition, at least in certain circumstances. Although anecdotal evidence has identified instances of evergreening, which can be defined as artificially extending the protection cliff, just how pervasive is such behavior? Is it simply a matter of certain bad actors, to whom everyone points repeatedly, or is the problem endemic to the industry?" 

          The results, she finds, show a startling departure from the classic conceptualization of intellectual property protection for pharmaceuticals. "The results show definitively that misuse of the patent and regulatory systems is not limited to a few pharma bad apples," says Feldman. "It is business as usual throughout the industry." In addition, says Feldman, "blockbuster drugs have earned billions of dollars for pharma, and abusing the patent system has paved the way."

          The study also reveals data pertinent to the discussion of opioid addiction. "As the nation awaits release of the final report from the White House Opioid Commission," notes Feldman, "the pharmaceutical industry continues to be under fire for opioids and more. Many are hoping the White House report will help ease access to medicines that treat opioids. Reckitt, which makes the brand name drug Suboxone, is a serial offender when it comes to manipulating the systems. Our data set shows that Suboxone extended its protection cliff 8 times, including obtaining an orphan drug designation, which is intended for drugs that serve only a small number of patients."

          Key results include the following:

          • Rather than creating new medicines, pharmaceutical companies are recycling and repurposing old ones. 78% of the drugs associated with new patents were not new drugs coming on the market, but existing drugs.
          • Adding new patents and exclusivities to extend the protection cliff is particularly pronounced among blockbuster drugs. Of the roughly 100 best-selling drugs, almost 80% extended their protection at least once, with 50% extending the protection cliff more than once.
          • 40% of all drugs available on the market created additional market barriers by adding patents or exclusivities.
          • Once a company starts down this road, there is a tendency to keep returning to the well. Almost 80% of drugs that added protections added more than one.
          • Among those adding more than one barrier, some were serial offenders, with roughly half adding 4 or more protections and some adding more than 20.
          • The problem is growing across time. The number of drugs that extended their protection doubled during the time period. The addition of certain types of barriers increased at an even greater rate, with some tripling.
          • In addition to the aggregate results, the data set will provide a treasure trove for researchers and government officials by showing all the protections added for each drug individually during the period. For example, with Oxycontin, the company extended its protection cliff 13 times, piling on new patents and exclusivities over and over again.

          The paper offers strategies to help fix the problems:

          • A "one-and-done," approach in which each drug receives one – and only one – period of exclusivity;
          • Ruthless simplification; and
          • Transparency.

          Professor Feldman is the Director of the Institute for Innovation Law at the University of California Hastings College of the Law in San Francisco and author most recently of Drug Wars: How Big Pharma Raises Prices and Keeps Generics off the Market (Cambridge University Press 2017). See links below to other papers of Professor Feldman on the pharmaceutical industry:


          Go to News Archive

          Share this Story

          Share via Facebook
          Share via TwitterShare via EmailPrint Friendly Version

          Other Recent Stories/ RSS

          Thursday, July 12, 2018

          A Q&A with Andrew Scott, UC Hastings College of the Law’s New Director of Human Resources

          "It's about everyone, as part of the team, being excited about the end goal and understanding that they play a big part in it."
          Friday, July 06, 2018

          Joe Veith '08 Defends Parents Separated from Children at Border

          He is on the front line of the family separation crisis in El Paso, Texas.
          Tuesday, July 03, 2018

          Thinkers & Doers: June 2018

          Inside the battle to save California’s water – Addressing rampant pregnancy discrimination at companies – Say Yes to Pro Bono – Enough with the racist gestures at the World Cup – Alum invests in properties to house the homeless in LA – Back to the Dark Ages of Rights for Women? – Hastings Law Journal article cited by Supreme Court – and much more
          Monday, June 25, 2018

          California Invests $4.5 Million in UC Hastings Diversity Pipeline Collaboration

          Initial offering of the “California Scholarship” at UC Hastings covers tuition, majority of living costs in San Francisco for students from HBCUs, AUA.
          Monday, June 25, 2018

          In Defense of Government Designation of Protected Areas

          "Now is not the time to turn away from a strategy that has produced such demonstrable progress," writes Professor John Leshy, former Solicitor of the U.S. Department of the Interior, with Wyss Foundation President Molly McUsic.
          Go to News Archive