The National Review views this reduction of patent protection as the ultimate criticism of pharma's 2009 deal to support President Obama's health care legislation. The Wall Street Journal frames the patent adjustment from the perspective of branded drug companies, referring to the change as something that will stifle the development of breakthrough drugs. This wailing prompts four, top-of-mind responses.
(1) The Republicans have made budget cutting their number one goal. President Obama is obliging them and legitimating their crackpot reasoning, but the Republicans just don't like it when their ox is gored. Pharma has long been a major financial backer of Republicans and the 2009 deal on healthcare legislation notwithstanding, such loyalties run deep. In the mid-term elections last year, that classic alignment was reconfirmed when Republicans again received the overwhelming share of pharma contributions.
Now as any good finance manager will tell it, when a budget maker looks to make reductions, he cuts wherever he can. According to a study just completed by IMS, one of the world's largest suppliers of market data on the health care industries, the US saved nearly $1 trillion between 2000 and 2009 by using generics instead of premium priced brands. Republicans want to cut expenses and the White House is merely suggesting that reducing the government-granted monopoly by five years on products that already returned huge profits to their developers is a reasonable way to do it.
(2) Pharma already got its end of the 2009 bargain for supporting health care reform. In return for pharma's lobby, PhRMA, agreeing not to use their deceptive George and Martha ads to slander the legislation, the White House prohibited Medicare from bargaining over drug prices (the way the Veteran's Administration and every other country in the world do) and also blocked reimportation of drugs from Canada and other countries where prices are far less expensive.
(3) The National Review's editors, who get aroused by Sarah Palin's nitwit winks and pronouncements, correctly state that the reduction of patent exclusivity is part of the effort by HHS Secretary Kathleen Sibelius to encourage a higher percentage of generic drug use by state Medicaid plans. In both cases the executive branch correctly reasons that payors, whether public or private, shouldn't have to pay premium prices when less expensive drugs will produce comparable results. That holds true whether the drugs are small molecules or large ones, and whether they're made by conventional chemistry or with biological mechanisms.
(4) Finally, when cuts are required to reduce costs, then jobs and the revenues of certain parties inevitably suffer. In such cases distinctions between the deserving and the undeserving are seldom easy. But when an industry demonstrates persistent patterns of malfeasance involving such matters as price gouging, illegal marketing, distorting research data, corrupting the medical communication process and paying off the "gatekeepers" who are sworn to place patients' interests above all else, then decisions involving public largesse and monopoly benefits for them appear somewhat less difficult. For that situation, pharma has only its own conduct over the past decade to blame.
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