Pharmaceutical Patent Extension in Exchange for Promise of Cheaper Generics?

Everyone in America realizes that we are approaching a health-care crisis.  Costs are increasing and many are un-insured.  My daughter was born two months ago in an uncomplicated delivery with no anesthesia, and not even an OB/GYN (we used a Registered Midwife).  The total cost will be over $30,000. Luckily we do have insurance.

[Article Link] In the Chicago Tribune, Dr. Henry Black gets into ten ways to fix our health-care system.  Dr. Black is chair of the department of preventive medicine at Rush University Medical Center in Chicago, and is well regarded in the field.  Interestingly for Patently-O readers, number nine on Dr. Black’s list is to "extend the patent life of pharmaceutical drugs." 

Generally, patented items are more expensive — that is the premium that the patent holder is able to extract.  This is essentially a reward to companies who advance the state of technology.  So, extending patent life would normally result in extending higher prices.  In Dr. Black’s plan, however, the government could offer a patent extension to pharmaceutical companies in return for them reducing the price of the drug by 50 percent when its patent life expires. 

According to Dr. Black: If the pharmaceutical industry could count on their successful products being protected longer, they could turn their attention to real advances. Rather than the shortsighted approach of importing cheaper branded drugs into America, we should devise ways to make our branded drugs cost less.

Interesting Proposal.

3 thoughts on “Pharmaceutical Patent Extension in Exchange for Promise of Cheaper Generics?

  1. 2

    Why are we having an intelectual debate about drug patent extensions? It is time for strong protest. This process has become a method by which politicians are able to indirectly repay the drug companies for their financial suppoort in their political campaigns. This is nothing less than theft. Money is being taken out of the pockets of Americas seniors and passed along to the big drug companies for political gain.

  2. 1

    I am sorry but I dont see how extending patents would help the situation.

    The whole premise of Dr. Black’s argument is that in return for extended patent protection, pharmaceutical companies would offer to lower prices by 50% once the patent expires, but prices of drugs drop significantly anyway once patent expires as cheap generics flood the market.

    So I fail to see how extended patent protection would help keep prices low. In addition whats to keep pharmaceutical companies from over-pricing key drugs now so that a 50% drop in prices once patent protection is gone would result in a smaller hit?

Comments are closed.