Bill Hobbs has a post with a great letter from Allen Glosson of St. Louis, Missouri, who gives a good description of the difficulties drug companies face trying to recoup their R&D costs by selling their drugs under patent. Drug patents last 17 years and...

It takes about 15 years for the entire drug approval cycle to be completed, previously leaving only 2 years for the drug company to recover all of its R&D costs.
Bill suggests that the "patent clock" shouldn't start until FDA approval is granted, but a) 17 years seems like a very long time to go without generic substitutes, b) what about drugs that never get approved? Sounds like it would create a new disincentive construct that might change the dynamics of the whole industry in some unforseeable ways.

But on to the real issue at hand. Allan writes further:

Currently, the drug can't be sold to anybody until after the FDA finally approves it. If you've ever read the writing of cancer patients, slowly dying, desperate for that new drug begging with the drug company and the FDA to allow them one more shot at life, you'll know that the FDA process is deeply flawed.
The Food and Drug Administration essentially has veto power over all new medical drugs and devices, and is controlled by a lopsided set of incentives that tends to make it overcautious -- the repurcussions are far worse for the FDA if it mistakenly approves of a treatment that turns out to be dangerous than if it mistakenly delays or fails to approve a treatment that is actually beneficial, even if the number of lives lost in each case is equivalent. The fact that the FDA can prevent sick people from voluntarily assuming the risk of unproven (but potentially beneficial) drugs has undoubtedly claimed thousands or even millions of lives.

The best proposal I've read was put forward by the Competitive Enterprise Institute and suggests that the FDA's veto power be eliminated and that unapproved treatments be made available under medical supervision and with clear warnings of the potential risks involved. The FDA would continue to serve as a state-run evaluator of treatments, and drug companies could choose to seek FDA approval if that approval was sufficiently valued by the public. Competitive market forces would then take hold in the medical industry, bringing costs of production down and thereby lowering prices all around. Additionally, and even more importantly to some, a greater number of treatments for a greater number of diseases would become available for use, which could save an uncountable number of lives above and beyond those saved by the lower prices.



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