[Ip-health] Business Standard: Drug patent regime has led to high prices: US Study

[Thiru Balasubramaniam]

http://www.business-standard.com/india/news/drug-patent-regime-has-led-to-h=
igh-prices-us-study/383772/

Drug patent regime has led to high prices: US Study
Joe C Mathew / New Delhi January 27, 2010, 0:50 IST

Other reasons include transfer of marketing rights to larger companies
and mergers and acquisitions among drug companies.

As drug multinationals from the United States demand a stronger
intellectual property (IP) regime that gives exclusive marketing
rights for their patented medicines in India, their own government has
said the IP system is partly responsible for the extraordinary
increase in prices for some medicines in the US.

A recent study conducted by the United States=92 Government
Accountability Office (GAO) has highlighted the importance of low-cost
generic equivalents and said lack of therapeutically equivalent drugs
and limited competition have contributed to the extraordinary rise in
drug prices in the US during the past decade.

The other reasons cited for the increase in prices include transfer of
drug marketing rights to larger companies and mergers and acquisitions
among drug companies.

The study is significant for the Indian pharmaceutical industry, as
domestic drug exporters are the leading suppliers of low-cost,
therapeutically equivalent medicines in the US.

The study could also be an eye-opener for National Pharmaceutical
Pricing Authority, industry experts say.

Released on December 22, the GAO study said 416 branded drug products
had extraordinary price increases during 2000=962008.

The number of extraordinary price increases each year more than
doubled from 2000 to 2008 and most such rises ranged from 100 percent
to 499 percent, the report said.

More than half the branded drug products that had extraordinary price
increases were in just three therapeutic classes=97central nervous
system, anti-infective, and cardiovascular.

The report said limited availability of therapeutically equivalent
drugs could be a result of patent protection and market exclusivity.
Two of six case-study drugs that had extraordinary price increases
were patented at the time of the extraordinary price increase, it said.

=93Recently, drug companies have increasingly focused on speciality
drugs that target niche markets, or a smaller population of people
with a narrow indication or medical condition. According to experts
and industry representatives, the pace of consolidation among drug
companies through mergers and acquisitions and transfers of drug
ownership rights has increased. Fewer companies producing and
marketing drugs can lead to greater market domination among certain
companies and less competition,=94 the report said.

While prescription drug pricing in the private sector is not subject
to federal regulation, drug companies are subject to anti-trust
enforcement in the US.

The Federal Trade Commission (FTC), the enforcer of anti-trust laws in
that country, had recently come out with a study that revealed =93pay-to-
delay=94 settlements among pharmaceutical companies to delay the entry
of low-cost generic alternatives in that market.

FTC has filed cases challenging =93pay-to-delay=94 settlements, in which a
brand-name manufacturer shares a portion of its future profits with a
potential generic competitor in exchange for an agreement to delay
marketing the generic prescription drug.


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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org


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