Until then it's off-label usage. When the time comes, expect an absolute feeding frenzy to make a similar equivalent (with incrementally higher efficacy or slightly fewer side effects) or an alternative formulation to regain those patent rights. I would expect Genentech is already hard at work here.
Except that the problem doesn't take care of itself. By 2019, the same company will likely have on the market a new patented drug in the same family, with roughly the same efficacy as the other two. They can do this pretty much indefinitely.
Yes it does. For example, look at Clarinex. This drug is in no way advantageous over Claritin, and in fact is metabolized into Claritin in vivo. The only reason that it exists is because Schering-Plough's patent ran out on Claritin.
Or look at Vyvanse, a prodrug of Adderall. Shire Plc has been intentionally manipulating the market (using government amphetamine quotas) for years in order to push patients away from cheaper generic Adderall (despite the fact that many people find Vyvanse to be substantially inferior).
Or take the case of adrafinil, which metabolizes into modafinil (provigil). Adrafinil is just fine (not quite as effective, but nearly so), but its patent ran out. At that point, Cephalon pulled strings to get its approval revoked (this was in France; adrafinil is unapproved and unregulated in the US), so that people would have to move to their newer, patented drug. (And yes, adrafinil does tax the liver some, but no more so than plenty of other drugs).
Yes, it does. They add something like calcium carbonate (tums) to an existing med and patent the combo, or they find an isomer of the drug. Happens all the time.
Drug companies have tackled that in a variety of ways.
Outright bribery of generic companies to hold off on production (http://www.usatoday.com/story/news/nation/2013/06/17/supreme...), scaremongering over safety of the generic (the article being discussed in this thread), paying doctors for prescribing the more expensive versions, etc.
Yes, but those generics will be cheap, whereas the new drug will be expensive. Since the doctors are reimbursed based on a percentage of the cost of the drug, they will choose the more expensive one, just like they do now. A cheap competitor already exists. Adding another cheap competitor won't help when doctors are incentivized to use the most expensive option.
You're forgettingabout the incentives of the insurers. They will be the ones to require the cheaper alternative, similar to the way many insurers require the use of Avastin for AMD unless there is a good reason to use Lucentis.
Actually, it won't be so easy. Avastin is a biologic drug, so it's not possible for generic manufacturers to produce an exactly equivalent product.
Eventually, generic manufacturers may be able to compete (the generic clones of biologic drugs are called biosimilars), but it will take a long time and significant resources, because they will need to run new clinical trials to show that the new drugs are equivalent:
Because different manufacturers may produce slightly different products, they consequently cannot guarantee that their version is exactly as safe and effective as the original manufacturer's version. So, unlike most drugs, generic versions of biologics were not authorized in the United States or the European Union through the simplified procedures allowed for small-molecule generics. As a result, nearly all biologics have been brand-name therapeutics and required very extensive testing.
http://en.wikipedia.org/wiki/Biologic_medical_product#Biosim...
The FDA gained the authority to approve biosimilars (including interchangeables that are substitutable with their reference product) as part of the Patient Protection and Affordable Care Act signed by President Obama on March 23, 2010 - none have yet been approved.
http://en.wikipedia.org/wiki/Biosimilar#Approval_processes
Because at $75M to $250M a pop, they're way cheaper than developing a new Biologic ($1B-$2B) and that's because while none have been approved yet, the pathway in the Patient Protection and Affordable Care Act is shorter than that for a new Biologic. I think Big Pharma will do what it takes to make this happen myself. Just like Google will apparently do just about anything for the bottom line despite their corporate motto.
There will be no feeding frenzy; researching an alternative is a fixed cost, but with a competitor they will only be able to sell the drug for marginal cost. The upstart competitor would make more money investing the fixed cost amounts in treasuries at 1%.
(This is a joke; when there are just two companies they price-fix rather than compete. Not with actual price-fixing agreements, instead tit for tat signaling as in the iterated prisoner's dilemma)
Isn't that an example where the new drugs don't matter? Prilosec seems to be cheap and widely available.
I take the point that some of the motivation (I'm hedging here because I haven't looked into it...) for Nexium is a patent protected drug to market, but the tone of this thread would have me believe that Prilosec and equivalents are disappeared from the market.
It's their most commercially-successful medication, they did misleading studies in order to tout its comparative effectiveness, market it heavily and bribe docs to favour it.
Prilosec is still available, but if your doctor prescribes Nexium, you're unlikely to question it. Virtually all of the folks on it could likely be on Prilosec with equal effect and much less cost to the healthcare system.
The underlying problem here is that the consumer doesn't care what the cost of their drugs are; all they do is sign on the dotted line when the doctor recommends something.
Insurees are essentially paying a monthly cost for an effectively unlimited pool of medical funds. As long as the bill is above what their copay costs, they couldn't care less how much the drug costs - if anything, they will choose the drug that costs more than what the nearly identical drug costs so they can 'get their money back.' As long as the consumer is separated from the consequences of their choices, costs will continue to rise. Some kind of incentive for people to actually care about the cost of their decisions needs to be engineered into the system.
Suppose, perhaps, that instead of mandating that employers provide insurance to full-time employees, the government mandated that employers provide catastrophic insurance and contribute the remainder of the difference between the old system and the new to a kind of Health Savings Account: something that's tax-advantaged, and can only be used to pay for healthcare. Employees would then pay their medical bills directly from this fund, and funds will continuously build if they're not used. The kicker is that this HSA also doubles as a retirement fund, and any funds left over when retirement age is reached can be withdrawn without penalty. People will see the money as theirs, and will be much more careful about how they spend it, thus putting pressure on doctors and healthcare providers to reduce prices, rather than increasing them.
This took me ten minutes to think up. Give me half an hour, and I'll work out most of the kinks. Give a team of professionals a few weeks, and I'm sure that we could come up with something that makes infinitely more sense than the ridiculous hodgepodge of special interest legislation and twisted incentives that we have now.
Its the system and its players that overall are corrupt, not just the rules.
For example. Someone will be paid a bonus to make sure the average retirement account is emptied. The average american woman has about 2 kids, so we'll charge about 40% of an average lifetime account "earnings". After all we can either directly or indirectly select any price we'd like.
Another example would be some weirdness with plastic surgery where the cost would now directly correlate solely with human emotional response to a procedure rather than difficulty of the surgery.
Finally I think you'd have some pretty weird and borderline inhumane situations with respect to just barely under retirement age patients getting sick... Feel a lump? Well your grandkids will never go to college, or your kids will never live in a house, etc, if you seek treatment before retirement. Just wait a couple months / years, after all what could possibly go wrong with untreated cancer or heart disease or diabetes?
Now if you could roll over the treatment fund directly to your kids, that sounds great until (grand)parents start offing themselves so their kid can afford treatment.
"Give a team of professionals a few weeks"
Fox guarding the henhouse, you'll end up with something at least as corrupt if not more so than the existing solution.
You are ignoring that there are competing providers. In a competitive market, no one provider can maintain a price that is designed to "empty" an HSA account.
There is, of course, no competitive market in health care, its a natural monopoly and one side of the market is (intentionally?) completely uneducated.
These companies are just looking out for their own like good Americans.