The House Committee on Energy and Commerce’s Oversight and Investigations Subcommittee recently concluded its second hearing this month on the soaring cost of insulin.Ā
With insulin manufacturers’ price-gouging now leading some diabetics with no choice but to dangerously self-ration their medicine, reportedly leading to deaths, it could not have come at a better time, NPR reported.
While the practice of medicine is fraught with danger, there is a crucial distinction within the industry that the pharmaceutical companies do not like to talk about: when a doctorās decision hurts his patient, thatās called medical malpractice. When drug companies purposefully do the same to pad their bottom line, that is called patent law.
Medical malpractice is a fact of life for doctors. Doctors make mistakes like anyone else. Only when doctors do it, the errors are incredibly costly. Each year, doctors pay thousands of dollars in medical malpractice insurance, contingent upon the possibility of accidentally harming someone in their care, Trustedchoice.com reported. Doctors, therefore, have every incentive to provide the best possible care for their patients. The same cannot be said for drug companies.
These companies are frequently incentivized to do just the opposite: to make the medicine they produce less accessible, increasing their demand and, in effect, its price. America’s current patent laws facilitate this scheme. Originally conceived as a way to foster innovation and protect intellectual property, The American Patent Law system was developed early on in our nation’s history. However, the American patent laws are currently being manipulated by drug companies to establish artificial monopolies over the medicine they produce. Indeed, patent abuse is a well-acknowledged, tried-and-true method for unscrupulous pharmaceutical companies to inflate their profits on the backs of patients in need of treatment, according to the Hill.com.Ā
Here is how it works: some self-serving drug manufacturers use patent protections to crowd generic alternatives to their brand-name drugs out of the market. Pharmaceutical profiteers hate generics. While generic drugs save patients billions of dollars ā$253 billion in 2016 aloneāthey eat into the brand-name company’s profit margin and prevent them from price-gouging. To combat this, drug companies file patents – a lot of them. According to a recent Association for Accessible Medicines (AAM) report, the top 12 brand-name drugs are protected by an average of 71 patents per drug, providing them an average of 38 years of shelter from the competition of generic alternatives.
Now, if these pharmaceutical companies were truly innovating at such a pace that necessitated that many patents, it wouldn’t be a problem. It would be revolutionary. However, that’s not what is happening. Instead, these businesses game the system by waiting for a particular patent to expire quickly, then making ineffectual tweaks to the drugās formula. They then pass the drug off as a ānovelā creation in need of patent protection. This allows them to stave off the nettlesome influence of generic alternatives and raise the prices for everyone purchasing the drug in dramatic, predatory fashion.
Worse yet, this problem is not contained to obscure drugs that treat rare illnessesāthis system is used on common drugs everyone needs as well. Companies around the country do this, like the company that controls the production of insulin. According to the CDC, over 100 million Americans struggle with diabetes or prediabetes and rely on insulin to manage their disease. For the three companies that control 99 percent of the worldās insulināSanofi-Aventis, Novo Nordisk, and Eli Lillyāthatās music to their ears, Biospace reported. Brand-name insulin, called Lantus, currently has 49 active patents issued, preventing generic drug manufacturers from breaking into the marketplace, Association for Accessible Medicines (AAM) reported.
Under current U.S. patent laws, insulin producers might not be able to market generic alternatives to Lantus for another 37 years!
To make matters worse, some insulin companies, like Sanofi, are taking their racket even further by dragging generic insulin manufacturers through extensive litigation proceedings. The United States Patent Office has begun taking action against the insulin industryās patent manipulation, ruling several Sanofi formulation patents invalid, the American Pharmaceutical Review reported. However, rather than allow generic insulin products to enter the market and compete with Lantusāsaving lives in the processāSanofi refuses to surrender the legal battle. A consequence of the extended proceedings, generic insulin medicine is subject to a 30-month stay which extends to the early 2020s, Endpoints News reported.
Sanofi, Eli Lilly, and Novo Nordisk are already facing a class-action lawsuit for price gouging and fraud relating to their insulin products, Bloomberg reported. Since 2011, the cost of insulin has doubled as the three insulin manufacturers have rapidly raised their prices on consumers, BioSpace.com reported. In 2016, Sanofi, Eli Lilly, and Novo Nordisk made an alleged $14 billion off their insulin products alone.
While these manufacturers continue to swim in profits, the American people are suffering. Self-rationers, from Antavia Lee Worsham, who died years after she lost insurance coverage when turning 18, to Micah Fischer, who died just months after aging off his father’s insurance plan, underscore how the consequences of their reckless price-gouging could not be more severe, Right Care Alliance reports.
Make no mistake. This is punching down at its worst. These patent privateers are squeezing profits out of a vulnerable population of Americans who canāt fight back and cannot live without insulin. The problem is only getting worse, and Congress deserves praise for taking the time to investigate and take a stand against it. The dangerous trend of pharmaceutical price manipulation has to stop. For the sake of people’s lives over profits, all manufacturers must be allowed to compete.
Benjamin Alli, M.D., Ph.D., is a Sakellarides Professor of Medicine and Surgery and the Chancellor of the Royal College of Physicians and Surgeons of the United States of America