A Raw Deal

The drug companies have pledged support for health care reform by promising to cut $80 billion in costs over the next ten years. But, in return they are being handed legislation that will allow them to make huge amounts of money.

According to internal memos, the details of the bill will further restrict importation of cheaper drugs from overseas, restrict the government’s ability to negotiate for lower prescription drug prices, and keep certain types of drugs in Medicare Part B in order to keep prices high. The inability of Medicare to negotiate drug prices

Source: Huffington Post

There has not been enough scrutiny of this deal, and yet at the same time another deal has slipped even further under the radar. During the markup process in the House, Rep. Eshoo (D-CA) and Joe Barton (R -TX) added an amendment that would extend patent protection for "biologics" for 12 years.

Biologics are a fairly new type of drug that are derived from living tissue. They are quickly gaining a strong foothold in the medical community. This makes them more complex and often more effective. Biologics are being used to treat all kinds of ailments, including arthritis, Crohn’s disease, and many types of cancer. They are very effective, and very expensive. Many biologics cost tens of thousands of dollars, sometimes far more.

We have seen in this country the positive effect on cost that comes from competition from generic drug manufacturers. Generic drugs that are affordable save lives. But the drug companies have made a deal that would grant them 12 year patents on biologics. No matter how effective a drug is, if it costs $50,000, people won’t be able to use it, and they certainly won’t be able to wait 12 years for the price to go down. To make matters worse, through a process called ‘evergreening,' the drug companies might be able to extend these patents forever, simply by making small changes to existing drugs.

In 2007, 14% of all money spent on prescription drugs was spent on biologics, and most of that reason is because costs were so high. But drug companies spend, on average, $100 million less developing a biologic than they do a normal drug, so why are we allowing them to charge huge amounts of money for these drugs? Especially when people’s lives are at stake.

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