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July 18, 2023


The comments to the linked-thread are closed (https://www.patentdocs.org/2023/01/the-new-york-times-is-at-it-again-regarding-patents.html)

I disagree with the statement:

"The real issue is that the development cost of biologic drugs is much higher than traditional small molecule drugs as is the cost of producing them. "

The cost of developing biosimilars is certainly less than the cost of developing generics, but the cost of innovator drugs may be similar, possibly lower for biologics. I would like to see the data. Biologics have been invested in at the expense of small molecules, in-part due to their "newness", but likely also due to their lower-cost/overall chances of success, real or perceived.

An interesting discussion of several different issues other than patents re this subject of huge total U.S. drug costs. One could add to the suggestion of better FDA coordination with manufacturers an improved FDA inspection of the foreign sources of drug manufacture starting materials, which has led to concerns re some generic drugs.

Mr. Gaugh's observations are correct. We in US do not have generic drug competition. Drug distribution is controlled by PBMs and being on the Formulary Lists.

PBMs to preserve their profits have driven manufacturers out as they cannot make their profits on the drugs. As a result if producers cannot meet their internal profit goals, they will stop production.

If we take out the PBMs and have direct sales to patients product quality will rise due to better manufacturing technologies and overall costs will come down. Law of Economics will dictate the playing field.

PBMs have killed every attempt for direct generic sales as they will lose their cash cows. http://bit.ly/2IXHiY6 could be used as a model.

Executive Orders have been ignored. To bring drug manufacturing home an alternate approach is needed. https://bit.ly/3nxOlIz is a pathway.

PBMs, FDA and Legislators will prevent direct sales and USA will increasingly suffer from shortages and high generic drug prices.

Tony: one source for the statement is from the FTC, which in a 2009 report estimated a cost of $1-5 million for a small molecule generic but ~$100-200 million for a biosimilar. (See, https://www.patentdocs.org/2009/06/no-one-seems-happy-with-followon-biologics-according-to-the-ftc.html).

In practice these costs may have turned out to be less; I think part of this cost estimate included building a production facility which has been avoided by biotech companies like Amgen and Genentech (which presumably have such facilities) producing biosimilars.

Thanks for the comment

The ENTIRE system - top to bottom, ship to stern - needs be dragged into the sunlight.

Nowhere is the adage of "follow the money" more penetrating than in the Pharma space.

Will this happen? Of course not - there is simply far too much embedded grift for the reset that is needed to take place.

I made an "unfortunate" error and should have said "The cost of developing biosimilars is certainly MORE (not less) than the cost of developing generics".

My objection relates to the statement on the cost of biologics versus the cost of small molecules:

"The real issue is that the development cost of biologic drugs is much higher than traditional small molecule drugs as is the cost of producing them."

The link referred to is apparently about biosimilar v generics. (The link does not connect with the report?)

Step away from all of the detail about the patent coverage on this drug or that, and just look at the big picture. How different is U.S. patent law from (e.g.) EP patent law or JP patent law? Very small differences. Often the claims granted on a given drug are essentially identical in US/EP/JP.

Now, how different are the prices of that drug in the US compared to the EP or JP? Frequently US consumers are paying multiple-fold the price that EP or JP consumers are paying---even while the drug is on patent in all three jurisdictions.

Clearly, then, the patent law is not main driver of the cost differential. If you are trying to combat drug prices by fiddling with patent law, you are like the proverbial drunk looking for his car keys under the street lamp because that is where the light is better.

Our healthcare costs -- including those for drugs -- is driven by insurance companies. Affordable healthcare was readily available before insurance companies got involved and regulated prices. My folks never had insurance -- we went to the doc for $6/visit and spent days in the hospital for less than $200. Now those without health insurance have to carry the burden for those insured. How can such a system be justified?

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