I found Alex Tabarrok’s discussion of me-too drugs and drug research very useful. It can be found here, here and here. Anyone who is interested in the topic should be reading Derek Lowe on a regular basis as well.
I these paragraphs are especially useful:
Concerning me-too drugs, on page 90 Angell says "there is little evidence to support the notion that…if one drug causes side effects, another one won’t." That’s odd because on page 81 when discussing the me-too statin’s (Zocor, Lipitor, Pravachol etc.) she notes "Bayer’s Baycol had to be removed from the market because, at the approved dose, it caused a deadly side effect." Hmmm. Similarly, early tests suggest that Celebrex may not have the same side-effects as Vioxx, despite the fact that both are Cox-2 inhibitors.
Angell is also skeptical that me-too drugs can have different effects in different people. Frankly, I was shocked at this argument. Every clinical trial that has ever been run demonstrates that the same drugs have different effects in different people – it’s hardly a surprise that different drugs have different effects. And me-toos are different – different enough not to violate the patent on the innovator drug almost certainly means different enough to have different effects in some people. My local supermarket carries at least a dozen different styles of peanut butter, a fact of which I approve, but Angell thinks two angiotensin-converting-enzyme (ACE) inhibitors may be one too many (p.90). Give me a break.
Finally, it’s important to recognize that small changes can actually make for important improvements. What could be more me-too than a once-a-day pill replacing a twice-a-day pill? Yet, to dismiss this change is to overlook the people factor. A once-a-day regime that people stick to is much better than a twice-a-day regime that people fail to follow. Forget the chemical structure the economics says a drug that people actually take is a better drug.
It is important to remember that me-too drugs are not necessarily exactly duplicative. He doesn’t deal with another question that I think is important to face head on. Quite a few people are worried about the fact that time and money is spent on drugs like Viagra. First of all, Viagra was not developed as an anti-impotence drug. But even for research into a me-too drug similar to Viagra, the money can fund the research for dozens of other drugs. That is a good thing.
I also enjoyed this series. It’s an issue I hadn’t thought about much- I just followed the herd in opposing “me toos”. Alex makes a strong argument.
I didn’t find the series all that good. First, about side effects: of course it’s likely that two compounds different enough to get different patents will have somewhat different side effect profiles. The crucial question is, are these differences anywhere near large enough to justify the amount of research done on them? Offhand, there’s a good case for answering ‘often, not’, since a me-too drug will normally take profits not only from the class of people who prefer its side effect profile, but also from the people who would just be taking the other drug, and thus there’s no reason to assume that pharma companies will develop only those drugs whose development costs will be made up by profits from the first source alone.
More importantly, I don’t think the series takes nearly enough account of the fact that the pharmaceutical market is not a normal market. Many consumers do not pay for their own drugs, for instance (or pay a small copayment.) To them, Nexium costs exactly the same as Prilosec, and has the “great advantage” of being “today’s purple pill”, not yesterday’s. They might not find this advantage particularly compelling if they had to pay the actual difference between the two drugs, but they don’t.
Now: I think there are good reasons to cover people’s pharmaceuticals, but these reasons are not: that it prevents distortions in the pharmaceutical market. It clearly does. And if one thinks those distortions are the unfortunate downside of a good thing, as I do, one has to ask: what steps could we take to minimize their impact? Messing with patent law, as Tabarrok suggests, is one possibility. Another, however, would be to ban consumer advertising for pharmaceuticals, on the theory that it is supposedly doctors who decide what to prescribe in any case, and any consumer who is interested in informing herself has ample sources of information at her disposal, sources that will teach her a lot more than the average pharmaceutical ad. Besides saving pharma companies tons of money (money that they must spend now, when everyone else does, but might also do perfectly well not spending if everyone else can’t), this would refocus attention on the actual merits of the various drugs. (Especially if restrictions on advertising to physicians were undertaken as well. This would not have to involve restrictions on speech: for instance, it is to my mind a scandal how much of physician continuing education is funded by pharma companies, and consists of essentially a great big combination vacation and advertisement with just enough ‘educational content’ thrown in (sometimes in the form of: let us educate you about how great our new drug is), to make it qualify.)
It would also be very, very good, on a number of grounds, to make the results of all studies undertaken by companies in the development process public. One effect of this would be to make more clear information available to physicians, thereby reducing the power of advertising and its ability to make misleading claims.
Oops: in the third para., the sentence “It clearly does.” should have a ‘not’ at the end.
“It would also be very, very good, on a number of grounds, to make the results of all studies undertaken by companies in the development process public. One effect of this would be to make more clear information available to physicians […]”
On the one hand, of course – on the other, I wonder about giving incompletely-digested data to people some of whom aren’t trained in statistics and analysis.
of course it’s likely that two compounds different enough to get different patents will have somewhat different side effect profiles.
Excellent series, but a quick point about the patent aspect of this. Patent claims can overlap — and they can overlap significantly. Indeed, it’s possible to have (what’s called) a patent that “dominates” another — that is, Patent A covers everything claimed in Patent B, such that if Patent B is infringed then Patent A is infringed as well. Think of a Venn diagram in which Patent A defines a large circle of exclusion (the scope of Patent A’s claims) and Patent B defines a smaller circle of exclusion entirely within Patent A’s circle.*
Now, it is true that patents cannot claim identical or nearly identical subject matter — that is, the circles cannot define the same or substantially the same area. Indeed, if patents do claim identical or nearly identical subject matter, they are said to “interfere” and the validity of each patent is called into question.** If the interference involves at least one pending patent application, it’s dealt with in the Patent Office under 35 USC 135; if it involves only issued patents, then it’s dealt with in District Court under 35 USC 291.
von
*I’m really oversimplifying this, but, for now, trust me that the issue of patent “claim” overlap is not the same as the issue of whether one patent’s “disclosure” invalidates another.
**I’m really, really, really simplifying this. (If there’s a nudnik patent lawyer out there, (1) yes, I’m aware that the situation is different when the potentially interfering patents are commonly owned; and (2) per the Eli Lilly case, interference determinations are done by cross reading the claims under a 102/103 analysis.)
“But even for research into a me-too drug similar to Viagra, the money can fund the research for dozens of other drugs.”
One point not yet discussed about me-too drugs is that they are much easier–and therefore quicker and cheaper–to develop than completely novel drugs. So the new drugs need only be only a minor improvement over the original drug to justify the relatively small amounts of time and money put into inventing them.
I’ve thought for about a year now that we need to have a reevaluation (or at least a good discussion) about how the FDA and patents interact. I would think that a getting a somewhat shorter FDA approval timeline going would be worth shortening the patent period over.
Sebastian —
My clients generally hate the FDA procedures, but I don’t think they’d want to shorten the patent term.
Sebastian,
But even for research into a me-too drug similar to Viagra, the money can fund the research for dozens of other drugs. That is a good thing.
It’s not clear to me what your point here is. Are you saying:
a. The profits from me-too drugs fund research into other, more useful drugs.
or
b. Research into me-too drugs may produce unexpected benefits in the form of other drugs.
The first proposition is clearly wrong. Research is guided by the expectation of future profits, not by past profits.
The second, while true, is not a strong argument in favor of me-too research. It totally ignores opportunity costs, as indeed Tabarrok’s argument does. It is not enough to say that there might be a happy accident. The question is whether the same resources, directed at finding new medicines, would produce more social benefit than current practice.
Similarly, to argue, as Tabarrok does, that the types of improvements he describes are sufficient to justify doing the me-too research in lieu of other projects is to ignore the potential benefits of the projects foregone. These benefits are, after all, the real cost of me-too research.
“My clients generally hate the FDA procedures, but I don’t think they’d want to shorten the patent term.”
Right, which is why it would be a compromise with people who want to dramatically limit patents.
Bernard,
“The first proposition is clearly wrong. Research is guided by the expectation of future profits, not by past profits.”
Past profits within a particular company are MUCH easier to reinvest in research than speculative profits from new capital investors.
The opportunity cost argument is useful but complicating. It isn’t at all clear that it cuts in your direction. First of all, ‘me-toos’ are often (but not always) easier to research. Second, many of what we call ‘me-toos’ were actually in research for years before the groundbreaking drug came out. They simply get to the market later for various reasons. So it isn’t clear how much the similar drugs represent an actual opportunity cost. You also seem to be dramatically devaluing the utility of similar drugs with different side effects.
Right, which is why it would be a compromise with people who want to dramatically limit patents.
Umm, no. What I’m trying to communicate is that, most likely, we’ll take the crappy FDA procedures if it means preserving the patent term. Indeed, I believe that some would take a marginal increase in crappiness if it resulted in a longer patent term.
Past profits within a particular company are MUCH easier to reinvest in research than speculative profits from new capital investors.
Again, I’m afraid your meaning is not clear to me. It is true that internal financing is sometimes better than going to the capital markets, though this is far from universally true, and the large pharmaceutical companies certainly have easy access to external capital. I think your “MUCH easier” is a serious overbid.
In any case, my point was that drug companies will not invest in new products, however the invesment is financed, unless the new products promise to be profitable. Having lots of money lying around from past successes is far from sufficient.
I agree that the opportunity cost argument does not necessarily cut in “my direction,” not least because I don’t have a strong view on all this. I merely wanted to point out that it goes a long way toward showing that the types of arguments put forward by Tabarrok and yourself are not particularly convincing in themselves. Without a lot more information as to the costs and benefits of these sorts of marginal improvements and spin-offs, and a better picture of alternative development opportunities, we simply cannot conclude that the me-too research is or is not the most socially beneficial use of resources.
This is the sort of issue on which actual honest, somewhat technical, information would be very helpful, but where lacking such information we unfortunately tend to let ideology guide our views.
“and a better picture of alternative development opportunities, we simply cannot conclude that the me-too research is or is not the most socially beneficial use of resources.”
Sure, but I think at this point you have pushed pretty far beyond the scope of Alex’s discussion. Are me-too drugs the most socially beneficial use of resources humanly possible? Probably not. Medicial drugs as a whole might not be. I don’t know, and probably it is unknowable. Even limiting it to, is it the most socially beneficial use of resources in the drug research arena would probably be a very difficult area to analyze. I think Alex was arguing against the conventional wisdom, which seems to be “Me-too drugs are obviously bad”. I think he makes a good case that many of the benefits are being dramatically underestimated in that kind of thought, and that the drawbacks are being overestimated.
If I was designing an ideal solution I would consider the following:
Shorten FDA approval by a year or so and shorten the patent period to mirror that. This would leave a company with the same productive period under patent, would retain the innovation benefits of a strong patent system, and would shorten the time before we allow normal market pressures to bring price reduction.
I would create a prize system for research areas with huge market incentive problems–especially vaccines.
I would also consider modest changes in liability law for FDA approved products. They might involve things like: requiring stricter scientific proof for suits against drug companies (to avoid the problem of driving products like Bendectin out of the market), and requiring that suits against FDA approved products be pursued in federal court (hmm has that already happened?).
Sebastian,
I’m nt proposing an overhaul of the entire market system of allocating resources.
I haven’t read Angell’s book, or much of Tabarrok’s discussion either. My objection really was limited to the “occasionally it does some good so it must be OK” tone. Perhaps I’ve missed the point.
As for your suggestions:
1. I’m not sure how the FDA cycle could simply be shortened on by an arbitrary amount like a year. If it could be done without affecting the quality of clinical trials then that would surely be desirable.
2. A prize system seems like a good idea, subject to details.
3. I have no wish to engage in a lengthy discussion of the liability issues. I know there are horror stories on both sides, but the facts often seem hidden behind an impenetrable wall of spin and distortion.