Yet EpiPens are not—by a long shot—the only drugs that have sparked recent outrage due to price hikes. And the price of Naloxone, a life-saving drug that can help reverse opioid overdoses, has risen fold in the past two years. Our government offers drug companies monopolies through both patents and Food and Drug Administration FDA marketing exclusivity, a statutory provision that grants a new drug protection from direct competition from generics for up to seven years. Given that regulatory approval for production lines can take years, the FDA can also influence how many competitors exist in a drug class.
The political version of that game looks a lot like the recent controversy over the price of EpiPens. The move sparked outrage, with most patients and politicians turning their ire on the easiest target: Easy — but wrong.
For starters, brand damage can be countered with savvy public relations without helping anyone. A few days ago, Mylan promised to help families afford its sky-high prices by expanding a coupon program. But it merely creates another bureaucratic hoop for sick people, and some insurers may not accept it.
Many families could see no savings at all. Today we are upset about EpiPens. On any given day, it could be Gilead Pharmaceuticals spiking the price of Hepatitis C medication while shifting operations offshore to reduce taxes, or the cabal of companies raising prices on insulin in suspicious tandem.
We should blame drug monopolies for skyrocketing prices, not evil CEOs. We have created a system that allows these companies few or no competitors, but we are periodically shocked and publicly shame them when we do so. It almost seems a little unfair. Instead of playing whack-a-mole, we need to break the monopolies themselves.
If they do not, we can demand generic versions for federal programs like VA hospitals, and pay a royalty in return. Or, we can simply break the patent for everyone.
In fact, we may not be limited to publicly funded pharmaceuticals. The federal government technically has the power to suspend a patent altogether. Inthe Bush administration threatened the maker of anthrax medicine Cipro with exactly that power.
Moving forward, all new patents could include far-stricter cost protections that link prices to median income. Or, if you prefer a more flexible system, you could incentivize innovation with hefty cash prizesbut place the resulting drugs in the public domain.
Consider that the precursor to the EpiPen was the ComboPena product developed with public funds to protect our armed forces. When companies do invest their own money, it is often in drugs that generate steady long-term profits like fighting baldnessrather than one which would cure a deadly disease but only be needed for two weeks.
Protecting pharma monopolies generates a poor return on public investment, while simultaneously spurring research into low-priority maladies.
Labeling pharma execs callous or evil may be satisfying — and even occasionally correct — but it disguises the true concern. Going after companies one by one will get us nowhere.
It is a pitiful strategy for lowering the price of life-saving medication.Natural monopolies result from economies of scale, while network effects come from the benefits to consumers from having many people use a service. People who need life-saving drugs cannot do without them and surely will be willing to pay very high prices for them.
The monopolies created by Hatch-Waxman and subsequent legislation providing 12 years of exclusivity for biologic drugs clearly went too far in compensating the pharmaceutical industry at the.
Sep 23, · End Patent Monopolies on Drugs Dean Baker is an economist and the co-director of the Center for Economic and Policy Research. Updated January 10, , PM.
In the case of medicine, monopolies emanate from patents. Typically a patent lasts for 20 years, but drug companies are expert at getting them extended. Aids drugs increase South African life. As the FDA expanded its power, regulating every single piece of medication in America, drug prices increased considerably, while access to .
The monopolies created by Hatch-Waxman and subsequent legislation providing 12 years of exclusivity for biologic drugs clearly went too far .