How the drug patent process protects Big Pharma’s profits

Categories: Big Pharma, Drug Prices | Tags: , | Posted On:

Patents were created to protect inventors’ right to their discoveries and to promote the progress of society. But over time, the drug industry has come to know patents as a money-printing machine. Today, drug patents actually work against their original purpose — discouraging real innovation in the pharmaceutical industry.

The most profitable venture for drug companies is stretching out the patent of a billion-dollar drug. Patents make it illegal for a competitor to sell the same drug for a certain period of time. The longer a drug company can stretch out the patent life, the more money it can make. Extending a patent a few extra months translates into millions of dollars of added revenue.

Once a drug company’s patent expires, generic versions of the patented drug can be produced and sold. Since brand-name drugs never lower their prices in response to competition, drug sales plummet. Pharmagossip discusses this further in its post, Big Pharma’s Big Problem contd. – the rise of generics in the US. If only one generic is produced, sales of the brand-name drug remain relatively high because generics only lower their prices in response to competition. But if 50 generics are released, prices fall drastically and the life of the brand-name drug is essentially over.

For this reason, Big Pharma focuses most of its new product development efforts on “gaming” the federal government to extend patent and exclusivity rights. Drug makers essentially retest the same drug for other uses in order to lengthen the exclusivity period.

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A good example is Schering-Plough’s Claritin, the antihistamine. Claritin’s patent and exclusivity rights were nearing expiration, so the drug maker retested Claritin with the FDA for slightly different uses and called it Clarinex. Schering-Plough then launched a huge promotional campaign to switch users from Claritin to Clarinex because it was an “improvement” over the existing drug, even though its chemical composition is almost identical. More on this common practice here, with a specific discussion of Claritin/Clarinex here.

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How long will consumers put up with this kind of duplicity?

About Cary Byrd

eDrugSearch founder, Cary Byrd, has been called an “e-health innovator” by MarketIntellNow, interviewed by top pharmaceutical industry journalists, invited to Matthew Holt’s Health 2.0 Conference and a Consumer Report's health summit, and highlighted on numerous health blogs. - Search. Compare. Save.

0 thoughts on “How the drug patent process protects Big Pharma’s profits

  • Big pharma also does what is called evergreening, which is applying for additional indications on one of thier aged drugs, along with paying off generic drug companies to delay the release of generics of a particular product.

  • The actual molecular entity of a potential pharma candidate of a big pharma company typically is developed in an academic setting not affiliated with the big pharma company. Then, the company lisences the patent from such an institution to progress with development. So they are big on development, and limited on research. So they keep the public in a dreamworld, do they not?

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