Posted on 11/21/2006 4:41:50 AM PST by Brilliant
NEWLY EMPOWERED Democrats' vow to cut health-care costs might spell bad news for the brand-name pharmaceutical industry, but their efforts could provide new momentum for the generic-drug rivals' agenda.
Boosting the generics industry may prove to be a politically palatable way to follow up on the party's campaign promises. That's because making more room for generics is meant to cut prices through increased competition -- a solution that is easier to sell as pro-market than other proposals Republicans will portray as precursors to federal price controls. In addition, some legislation that must be renewed in 2007, including laws providing vital funding to the Food and Drug Administration and encouraging studies of drugs' use in children, could provide gridlock-proof vehicles for generics provisions.
"Overall, because of the shift in Congress, next year could be the most important year to the generics industry since 1984," when Congress passed the law that opened the door to the modern generics business, says Jake Hansen, a vice president at generics maker Barr Pharmaceuticals Inc...
The most important question will likely be how and whether to create a legal pathway for the FDA to approve generic versions of biotechnology drugs. The 1984 law that created a framework enabling the FDA to approve generic drugs focuses on traditional, chemically derived drugs such as Prozac, but didn't give the agency a way to approve generic versions of most biotech products. Now, the issue will get a push from several key Democrats, though it will be difficult to pass such a complicated and contentious change in 2007.
An array of other measures aimed at smoothing the way for traditional generic drugs will also get attention, and could well be tucked into broader bills next year. Among them are proposals to limit branded-drug company tactics that thwart generic competitors...
(Excerpt) Read more at online.wsj.com ...
If they really want to make some headway, then they should ban pharmaceutical companies from discriminating against the American consumer. If they are selling pharmaceuticals in Canada for 1/2 the price that they are selling them for in the US, then they ought to be told that they must either raise their price in Canada or cut it in the US. The US consumer should not be expected to bear the full cost of R&D.
"If they really want to make some headway, then they should ban pharmaceutical companies from discriminating against the American consumer."
couldn't be said better
There's no need to ban differential pricing, which occurs in a lot of industries. What we need to do is strip pharma companies of their special right to prevent consumers from shopping around on the worldwide drug market. If the Democrats do nothing else, they could win major points by stopping those FDA seizures of prescriptions being filled in foreign countries.
Years ago, the Clinton administration created a special Right To Shop Around for one of the party's important constituencies, homosexuals. They, and they alone, can legally order drugs by mail from overseas.
Sounds like a violation of the equal protection clause... not that the Constitution really applies any longer.
Sounds like more Free Trade to me.
It will be interesting to see whether other major drug chains (Walgreens, etc.) lower their generic drug prices to compete with the Big W.
Would be good to see either party get some traction on this issue, provided the solution isn't contrary to the core values of our country (ie. that the solution isn't socialism).
Absolutely love how Wal-Mart has affected the industry on prescription drugs. Their move to offer low price generic drugs sent local (Western NY) competitors scrambling to similiarly offer low prices. Bring on the price wars! Love it.
I don't agree with you. The problem is that some countries effectively refuse to honor US patents on drugs, by regulating the price of drugs at low levels which do not reflect the value of the patents (e.g. Canada and just about every other country in the world). So the US consumer ends up paying high prices which incorporate the premium for the drug patent, and are intended to encourage R&D, while the foreign consumers get a free ride, courtesy of the US consumer.
In effect, the problem is an international trade issue, but it is not being treated as one by the US government. The US should put pressure on foreign nations to pay their fair share of R&D, and if they won't, then the drug companies ought to be told that they have a choice: They can either find a way to increase their prices overseas, they can reduce them here, or they can simply stop doing business in these countries that won't let them charge what they are charging us.
If they were successful in forcing other nations to pay their fair share, it would cause a dramatic increase in pharmaceutical R&D.
Boost the generics by making it difficult to sell branded drugs. Perhaps we could require that government funded hospitals or pharmacies that have at least one customer who is a Federal Employee or welfare recipient get all their drugs from Canada. That should put the kibosh on the evil profit-hound drug companies and, just incidentally, eliminate drug research and new drugs for heretofore uncured diseases and new drugs for old diseases for which the bugs are now immune. No profit means no development.
This is fine unless the drug that will save your life hasn't been invented yet.
"The problem is that some countries effectively refuse to honor US patents on drugs"
I'm no expert on this, but it seems that India is one of the prime violators of pharma patents.
Don't we have a trade agreement with them?
'Walmart now provides many $4-per-month generics in many states. But the boondoggle mandatory Prescription Bill insurance has co-pays at $5 and up and only for 'preferred generics' [that's a list the insurer determined to cover, not all generics].'
Ironically, a friend gets one medicine that is on Wal-Mart's list for $4 but he has to pay $8 through Veteran's Administration. There may be lots of price changes.
And they make most of their profit in the USA.
If they really want to make some headway, then they should ban pharmaceutical companies from discriminating against the American consumer. If they are selling pharmaceuticals in Canada for 1/2 the price that they are selling them for in the US, then they ought to be told that they must either raise their price in Canada or cut it in the US. The US consumer should not be expected to bear the full cost of R&D.
Brilliant!
This is Beyond Brilliant and must be stated again and again. The USA is picking up the tab for the rest of the World, not only Canada but especially the ungrateful EU.
There is an international patent treaty that a lot of countries are party to. I'm no expert, but I think that the problem with it is that it requires the signatory to honor the patent in the sense that they will enforce the rule that he who owns the patent is the only person who can sell the patented product, but it does not tell them that they cannot regulate the price of that product.
So if Biogen comes up with a miracle drug, then they can market it in China, and China will honor their right to be the exclusive seller of that drug during the life of the patent. But there is nothing that says the Chinese government can't regulate the price of the drug at a low level.
Either that, or these countries are simply violating the treaty. Or maybe they are misinterpreting it.
Regardless of the situation, though, it is clear to me that the US is the only country that really ascribes to the notion that drug companies ought to be able to charge what they want during the life of the patent, so as to encourage R&D. The US policy is a good one in that it encourages R&D. But since no one else in the world ascribes to that policy, the US consumer is funding all of this R&D, and foreign consumers are receiving the benefit of that R&D free of charge.
What good is a patent if you don't have the freedom to set the price at a high level? The whole purpose of the patent is to increase the return on R&D investment by allowing you to charge a monopoly price during the life of the patent. If you can't charge the monopoly price, then having a monopoly really doesn't help you fund R&D.
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