President Trump’s State of the Union speech promised protection of both “American workers and American intellectual property, through strong enforcement of our trade rules.” Trump also noted that “I have directed my Administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down.” Although, high drug prices are, in many cases, premised upon exclusive rights granted by patents, the Administration has – thus far – not offered any indication that it will be breaking (or bending) pharma patent rights. For both new drugs and off-patent generics, the Trump Administration is looking to speed FDA approval noting that “last year the FDA approved more new and generic drugs and medical devices than ever before in our history.”
After the DC Circuit Opinion RE: The Structure of CPFB is fine. Rest assured that cohort on the DC Circuit Court of Appeals are not ‘right angle’ federalists. Too bad too, because much of the administrative state court expansion, and the like, is reviewed by this court.
Many of the most outrageous drug price increases have had no relation to patents. They are by companies buying up suppliers of old but sole-source drugs and applying huge price increases.
Although, high drug prices are, in many cases, premised upon exclusive rights granted by patents, the Administration has – thus far – not offered any indication that it will be breaking (or bending) pharma patent rights.
Two thoughts:
(1) I will likely be derided as a shill for saying this, but it is not 100% clear to me that there is anything problematic about U.S. pharma prices. The price to achieve a given level of health care is actually going down each year. In other words, if all you want to do is treat the diseases that we knew how to treat in 1980, you can do so much more cheaply today (in real dollar terms), than you could back in 1980.
The only reason that pharma prices rise on average each year is that we are constantly improving the quality of health care that we can provide. The only way you can get constant improvement, however, is to incentivize innovation, and healthcare innovation is hard work.
We have already come up with good cures, vaccines, and treatments for the diseases that are easy to cure, prevent, or treat. The stuff that remains to be cured, prevented, or treated is the hard stuff. The harder a disease is to cure, prevent, or treat, the more R&D will be necessary to crack it. The successful results of this R&D will have to hit a proportionally higher price point to justify that R&D. This is just the nature of the problem itself.
(2) To the extent, however, that we are willing to live with less healthcare innovation, and enjoy falling prices for the quality of healthcare that we already know how to achieve, the means to that end are clear enough. The other nations of the developed world use (a) the bargaining power of their national single-payer health systems or (b) statutory price caps on drugs and devices or (c) a combination of (a) & (b) to keep prices in an affordable range. It would be easy enough for us to follow this example and achieve a comparable level of price control, if only there were the political will to do so.
Based on past experience, however, I am skeptical that there is such political will. In view of point #1 above, that lack of political will might be a good thing, in any event.
In April 2011, 180 tablets of Erythromycin 250mg base tabs cost $30.01 without insurance (Walgreens). It was made by Abbot.
Shortly afterwards Arbor Pharmaceuticals bought the Erythromycin product line from Abbot and began raising the price.
As of last October, 180 tablets of Erythromycin 250mg base tabs cost, without insurance, $2,107.79 (Walmart).
Although Erythromycin is not used very much as an antibiotic anymore, it is used for gastroparesis, which is the failure of the stomach to empty. What some people experience as stomach upset with Erythromycin is it stimulating the stomach.
The only other drug approved in this country for gastroparesis is Reglan (metoclopramide), which comes with a black label warning to not take it for more than 12 weeks because it may cause tardive dyskinesia. Tardive dyskinesia is a movement disorder characterized by involuntary wormlike movements of the tongue and may involve the arms and legs. Tardive dyskinesia is frequently irreversible.
The only alternatives to Erythromycin and Reglan are either an implanted vagus nerve stimulator or an enteral feeding tube inserted into the jejunum.
The patent for Erythromycin (U.S. Patent 2,653,899) was issued September 29, 1953 and would have expired in 1970.
So, Greg, tell me what Arbor Pharmaceuticals has done to justify their price increase?
I will note that only one of the members of the Arbor Pharmaceuticals Board of Directors is an MD. The rest are MBAs and Finance Guys.
Nonetheless, I wish all of them long and happy lives, because when they die they are going to Hell.
And I’ll be there to welcome them.
So, Greg, tell me what Arbor Pharmaceuticals has done to justify their price increase?
Perhaps nothing. I carry no brief for the position that all actions taken by private actors in the pharmaceutical industry are prudent and moral. In a world run by human beings, some actions will be ill-advised, and some will be morally wrong, and some will be both.
My suspicious is that the problem that you describe with erythromycin will solve itself based on the ordinary working of market forces, just as the ordinary working of market forces fixed the problem with daraprim’s price hike. If it turns out that market forces cannot fix the situation you describe, we might do well to look into a public sector solution to the problem.
How is ANY entity desiring to set a price on an uncontrolled product to ANY level something that is morally wrong?
Not liking something has NO bearing to whether something is or is not morally wrong.
From the given facts, there is nothing stopping anyone else from jumping in and supplying erythromycin at a different cost point.
Greg hints at normal market forces, but then goes a step further (into the Liberal Left arena) with “public sector” solution.
For what may be obvious reasons, healthcare is a prime source of intrusion of Liberal Left philosophies.
But the (over)controlled Nanny state apparatchik of the Liberal Left is a well-known social experiment FAILURE.
The answer instead is with Adam Smith and a strong patent system.
My suspicious is…
Er, “my suspicion is…” Sorry about that.
Incidentally, I would like to clarify that by “perhaps nothing,” I also mean “perhaps something.” That is to say, I really do not pretend to know all relevant details about Arbor pharmaceuticals and erythromycin’s price. I had never heard this story until I read it here at around 8:50 am, and I have done no research to confirm or refute anything that NOIP describes. I therefore have no comment on the particular erythromycin question described above, except to say that if generic competition does not enter this particular market, then government intervention might be prudent. I notice, however, that there are over a dozen other manufacturers with FDA approval to manufacture erythromycin, so I will be surprised if none of them choose to enter a market where there is evidently profit to be made.
No One In Particular, you’ll like this book:
link to amazon.com
A warning: I could not finish it. It was too depressing.
“I will likely be derided as a shill for saying this”
So preposterous that such a statement would preface substance which is so completely rational and moral, and so sad that such is the state of the culture that it is not unfounded.
alas, “spin” is so often the “name of the game” (and it certainly does not help when editorial controls are put in place that diminish dialogue and promote the “drive-by” types of comments that reflect an Internet-style “sh0ut-d0wn.”
“the Administration has – thus far – not offered any indication that it will be breaking (or bending) pharma patent rights.”
What do you think Trump’s defense of the PTAB was about?
Dennis – you just destroyed Michelangelo’s David.
“destroyed Michelangelo’s David”
He pruned one layer too much.
My first exchange with you was made without snark. I was indeed curious as to what you view as the “Trump” defense.
I say this because the current defense of the PTAB (for example, in the Oil States Amici Brief) does not bear any “Trump” imprimatur.
Are you aware of some defense that is directly linkable to the view of Trump?
This gives the administration more credit than it deserves. I doubt that anyone in the executive branch paused even ten seconds to consider the likely effect on drug prices if Oil States were to prevail and IPRs be declared unconstitutional. The SG defended the PTAB because it is the SG’s job to defend the constitutionality of laws enacted by Congress. There is no evidence that there was any more “strategy” to the process than “this is what we are supposed to do.”
That was rather my point – thanks Dozens.
Drug prices are just one of the many problems that Pres. Trump discussed, for which he proposed no practicable solutions at all. No surprise there. He is not interested in solutions to problems that Americans face. He has found that one can avoid hard thinking about difficult problems by indulging more forcefully in lurid scapegoating of minority populations.
Well, it is a proven strategy. I think he is the ultimate realty TV star. I would not be surprised if he started a TV program, “In the Oval Office,” starring Donald Trump.
That was a bit hopeful. Better than Obama’s ridiculously ignorant yapping about trolls.
But, Trump seems to be mainly interested in this for USA vs. other countries.
I came across a patent the other day which has claims that are totally divorced from the subject matter of the specification. It was something like the 4th continuation in a family. Somehow, it got granted despite glaring 112 issues (not to mention the subject matter issues). The lawyer who owns and prosecuted it exclusively targets mom and pop operations (ok, that may be a stretch, but clearly, after Alice, all of the targets have been small businesses), demanding $20,000 to $50,000 a pop.
This is clearly a case where the so called inventor did not actually contribute or invent the subject matter that he is targeting and did not advance knowledge in this particular field (I’ll save judgment on his other “contributions” to the sciences). It is 100% unjustifiable rent extraction. He did not invent it, through his sophistry, is using the patent system to extort money for something that he is not justly entitled to.
What should we do to stop his actions that will not cause any one small business a small fortune?
What is the patent number? Let’s shed some light.
I do not know what patent Ordinary is talking about, but here is a demand letter asking for $35,000 sent by Electronic Communication Technologies, LLC, a response, and at the bottom of this blog post, 11 different prior art claims charts comparing the patent owner’s allegations regarding the scope of the claims with the prior art.
In light of the patent, the prior art, the alleged scope of the claims: did the patent owner “actually contribute or invent the subject matter that he is targeting” or “advance knowledge in this particular field”? Is demanding a small company pay $35,000 justifiable?
See if the state the small business client receiving one of those mass mailing patent threats is in is one of the many states that have passed state laws on the subject enforceable by states attorneys.
Vera,
Your logic is deeply flawed and you state as fact those things which have not bee adjudicated in the particulars.
Further, you do not disclose here that you are employed by EFF and that your links are perhaps to active matters.
Whether or not you (eventually) prove your case is besides the point.
I suggest that you brush up your attorney skills, as your letter appears to be as decrepit as the “shake-down” letters that you “purport” to fight.
It is a good question Ordinary. Can we get more information?
No such thing as a Bad Patent according to the rotund dawg & his fellow travelers.
Try to grasp the context (and the distinction already presented there between “B A D” and invalid.
Just in case you want to say something intelligent.
O.S., that is what 35 U.S.C. 304 is for, but it requires a Director who will use it.
Let’s not pretend that district courts cannot deal with problems too.
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