Facebook  Twitter  Youtube  ISSUU  RSS  Email

Media Contacts

UK
Dominic Kavakeb
dominic.kavakeb@transparency.org.uk
+ 44 (0)20 3096 7695
Out of hours: Weekends; Weekdays (17.30-21.30): +44 (0)79 6456 0340


Twitter

TransparencyUK "The Morning Risk Report: U.K. Raises Game on Social Impact Investing" via @WSJRisk https://t.co/bejzuHXPIq
16hreplyretweetfavorite
TransparencyUK RT @kathryn_higgs: Dr Mo Ibrahim: Transparency - in particular beneficial ownership - is one of the top 5 challenges facing businesses toda…
TransparencyUK "Corruption scandals show why leaders should highlight ethics" via @FT https://t.co/wAoD16Ug3O

Tag Cloud

Allegations anti-bribery anti-corruption summit anti money laundering bribery BSkyB Cabinet Office Chart companies conflict Corporate Cooperation corrupt capital Corruption corruption in the uk employment film financial secrecy Governance Government health Home Office illicit enrichment intern journalists Letter Leveson Inquiry London Merkel money laundering offshore tax open governance pharmaceuticals PHP Prime Minister Register of Interests Research Resources Social Accountability statement Trustees UK Unexplained Wealth Orders unmask the corrupt UWO vacancies

Stay Informed

Sign up for updates on TI-UK's work & corruption news from around the globe.

The pharmaceutical patent game

Written by Guest on Monday, 17 November 2014

While the ‘evergreening’ and ‘forced switching’ of pharmaceutical patents are legal practices, they act to reduce access to medicines for many and often those most vulnerable and so could be considered unethical or morally corrupt practices. Søren Holm, Professor of Bioethics at the University of Manchester, discusses the pharmaceutical patent game and its impacts.


 

While the ‘evergreening’ and ‘forced switching’ of pharmaceutical patents are legal practices, they act to reduce access to medicines for many and often those most vulnerable and so could be considered unethical or morally corrupt practices.

Søren Holm, Professor of Bioethics at the University of Manchester, discusses the pharmaceutical patent game and its impacts.

Why do we allow the pharmaceutical industry to play games with the patent system and charge us over the odds for the drugs it produces?

As long as an important drug is covered by a patent, the producer can charge the monopoly price; that is, a price much higher than if there was competition. As soon as the patent expires and other producers enter the market, both the sales volume and the price fall significantly. This is colloquially known as the ‘patent cliff’ because of the potentially precipitous fall in revenue and profits after the patent expires.

This creates strong incentives for the pharmaceutical industry to play the ‘patent game’ and invent ingenious ways to ensure that there will be no competition and that monopoly pricing and profits can be maintained. Two of the main methods are ‘evergreening’ and ‘forced switching’.

A firm can evergreen a patent by making a minor modification to the drug and showing that the ‘new’ drug is as good as the old. The modification can be made to the drug itself but changes can also be to the way in which it is delivered, for instance by introducing a slow release tablet. It is, perhaps surprisingly, not a requirement for the registration and sale of a drug for it to demonstrate that it is better than what is already on the market, it just needs to be as good as what is already out there. A classic example of evergreening is the antidepressant Escitalopram. The Danish pharmaceutical firm Lundbeck had developed the highly successful drug Citalopram which was a mixture of the S- and D-isomers of a particular molecule. However, before the end of the patent period for Citalopram, the firm patented the S-isomer separately and marketed it as Escitalopram, thus extending the monopoly protection period considerably.

Evergreening can be combined with forced switching if the new drug can be brought to market before the patent for the old drug expires. The old drug can then be de-registered and doctors forced to switch their patients to the new drug. This means that when competition appears in the market, doctors and patients are already used to the new drug and locked in to prescribing it, despite its higher price.

So why is this important?

Neither evergreening nor forced switching is in the interest of patients or the corruption-resources-corruption-resources-health care system. Extending the period of monopoly pricing raises corruption-resources-corruption-resources-health care costs without producing any appreciable corruption-resources-corruption-resources-health care benefits. Playing the patent game is essentially an anti-competitive practice that is only in the interest of the shareholders of the pharmaceutical industry.

Crucially, the artificially-high prices for drugs produced by the patent game create a space for corruption.  With some drugs worth thousands of dollars per prescription, there is an incentive for unscrupulous companies to engage in corrupt activities. News of pharmaceutical companies bribing doctors to prescribe their drugs has made headlines recently, and squeezing competitors to the margins through patents creates a dangerous black market.

So why does society allow the game to be played? In a country with a very strong pharmaceutical industry, there may be a national interest in allowing ‘our industry’ to extract profit from the corruption-resources-corruption-resources-health care system of other countries, but otherwise allowing this game seems completely irrational. In any country with a public corruption-resources-corruption-resources-health care system, it simply leads to a transfer of tax payers’ money to the shareholders of the pharmaceutical industry.

2881

Read 2881 times Last modified on Tuesday, 24 November 2015 11:47

Guest

The TI-UK blog features thought and opinion from guest writers as well as TI staff. Any opinions expressed by external contributors do not necessarily reflect the views of Transparency International UK.

Leave a Reply

Contact Us | Sitemap | Privacy

UK Charity Number 1112842

Transparency International UK is a chapter of