Drug Makers Game the System

Ever wonder how a brand name prescription drug goes generic? Cheaper generic versions of brand name drugs can often be created and marketed. Obviously, the brand name wants to keep the drug patent all to themselves as long as possible. As the only type of drug on the market, they make all the profit. But as Spider-Man says, with great power comes great responsibility. Sometimes the makers of drugs do not want to share. And that’s where things get tricky.

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NPR delves into the subject in a lengthy and well-researched article on two brand name drugs: Thalomid and Revlimid. Owned by Celgene Corp., Thalomid and Revlimid are both made from a dangerous drug that was pulled from the market. Thalidomide was once thought to be harmless, and sold over the counter in Europe as a sedative and treatment for morning sickness. The drug was soon linked to birth defects, and quickly removed. The drug was never approved for sale in the U.S. and fell into the category of an “orphan drug.” Over the years, new research showed that Thalidomide could be used to treat leprosy. After some testing, it was found to slow progress of the blood cancer multiple myeloma. Celgene altered the medicine by removing the oxygen atom and adding a nitrogen atom. This changed it into a new amino group, and the new drug was labeled Revlimid.

NPR accurately notes: “In many respects, Thalomid and Revlimid can be considered perfect examples of the U.S. pharmaceutical research system at work: An old drug that was rotting on the shelf was revived for new, useful purposes.”

The Celgene Corp. has protected the results of the once “orphan drug” using multiple legal protections and patenting techniques. This is fine, the report notes.

“The U.S. patent and drug-approval systems are set up specifically to encourage and reward this kind of innovation. Companies that develop new drugs are awarded a monopoly for a handful of years to profit from their invention.”

Protections and patents are accomplished by “layering orphan drug approvals in a way that extends exclusive market rights, limiting potential generic competitors' access to samples of the drug, and making deals with generic companies for limited market access,” the report shares.

While these actions are perfectly legal, it wasn’t exactly what lawmakers had in mind.

“But the patent and exclusivity periods are supposed to expire. Then, the theory goes, competition takes over and prices fall. That hasn't happened in this case,” NPR notes.

What does this mean? It means that there will be no generic versions of Thalomid and Revlimid thanks to legal loopholes.

“The company's actions around these two related medications is a case study in how pharmaceutical companies use legal tactics to thwart competition in a way that adds to the problem of rising drug prices. Most big drug companies use the same strategy,” the report notes.

"’One of the barriers to competition that concerns me the most is when companies game the system by taking advantage of certain rules and laws,’ FDA Commissioner Scott Gottlieb said in early May. ‘They exploit loopholes in our system to delay generic entry. In these ways, they extend a drug's monopoly beyond what Congress intended.’"

This means that a generic version of either drug cannot be made without negotiating a deal with Celgene, suing to invalidate those patents or waiting for them to expire.

Generic Money Matters

This means big bucks for the makers of the drug. Without any competition, the Celgene Corp. has a monopoly on distribution and pricing. It’s an awful lot of power that should be used responsibly. Unfortunately for patients, the prices of the medication have risen dramatically over the years.

Here’s a breakdown of the numbers that one patient paid for Revlimid:

  • In 2006, the price was $6,195 for 21 capsules, a month's supply
  • In 2010, the price up to about $8,000 a month
  • In 2016, $10,691 a month
  • In March 2018, $16,691 a month

"’By preventing generic entry, Celgene has been able to continue reaping as much as $170 to $310 per dose for Thalomid and $430 per dose for Revlimid, or more than $200 million annually for Thalomid and $4 billion annually for Revlimid,’ said a 2014 lawsuit by the generic drugmaker Mylan.”

We recently shared a blog about the effects that blocking generics have had on prices; jacking up the money spent on brand name drugs has cost the U.S. billions. FDA Commissioner Gottlieb called drug companies out on their “shenanigans” to delay the entrance of cheaper competitors onto the market.

“Celgene is taking additional steps to block generic competition — even after the patents expire — by making it nearly impossible for competitors to get their hands on adequate supplies of the medications to do comparison tests, according to lawsuits filed by generic manufacturers who have tried to obtain the drugs. It's a tactic the FDA has seen many times,” the report shares.

“‘The gaming that I see is where people are blocking generic entry by restricting access to the doses,’ Gottlieb said in the report. ‘It's a pervasive problem.’"

With legal action and talks taking place, there is hope that a new generic drug can come into play. Celgene has stated that generics are on the way for both drugs. But with such high prices, it can’t be soon enough for those paying thousands.

 

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