Rx America: Drug companies want patent protection in health care overhaul

As Congress debates a health-care insurance overhaul, the pharmaceutical industry is lobbying heavily for expanded patent protections that its lobbyists say are necessary to protect the industry’s investments and encourage future developments.

The question is how long a period a drug developer will have exclusive rights to a certain kind of drug – called biologics – before competitors can be allowed into the market with generic versions.

Biologics are costly drugs produced from living organisms, not from chemicals as the more common small molecule drugs are composed. Americans spend an estimated $40 billion per year on the drugs, which comprise almost a third of Medicare Part B spending.

PhRMA – the lobbying arm of the industry headed by former Louisiana Congressman Billy Tauzin – wants at least 12 years of protection from competition, saying that’s about what it would take, on average, to recoup the initial research and development investment of getting a drug to the marketplace.

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Drug giant GlaxoSmithKline pledges cheap medicine for world's poor Head of GSK shocks industry with challenge to other 'big pharma' companies

The world's second biggest pharmaceutical company is to radically shift its attitude to providing cheap drugs to millions of people in the developing world.

In a major change of strategy, the new head of GlaxoSmithKline, Andrew Witty, has told the Guardian he will slash prices on all medicines in the poorest countries, give back profits to be spent on hospitals and clinics and – most ground-breaking of all – share knowledge about potential drugs that are currently protected by patents.

Witty says he believes drug companies have an obligation to help the poor get treatment. He challenges other pharmaceutical giants to follow his lead.

Pressure on the industry has been growing over the past decade, triggered by the Aids catastrophe.

Drug companies have been repeatedly criticised for failing to drop their prices for HIV drugs while millions died in Africa and Asia. Since then, campaigners have targeted them for defending the patents, which keep their prices high, while attempting to crush competition from generic manufacturers, who undercut them dramatically in countries where patents do not apply.
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Obama battles big pharma

Pfizer's latest mega deal reflects the threats faced by global drugs firms, not least from the new US president, says Alistair Dawber

"We will lower drug costs by allowing the importation of safe medicines from other developed countries, increasing the use of generic drugs in public programmes and taking on drug companies that block cheaper generic medicines from the market." The wording of President Obama's healthcare policy could not be clearer and should send a shiver through the boardroom of every major pharmaceutical group in the world.

For some time, the big players in the drugs market have faced a simple problem. Treatments that the likes of Pfizer, Novartis and GlaxoSmithKline (GSK) have spent years and millions of dollars developing are increasingly coming under threat from the generics companies, which invest nearly as much energy in challenging patents and developing cheaper alternatives. The established groups may consider the generics firms parasitical, but the likes of Barack Obama and the European Commission are tiring of the big beasts hiding behind patents ensuring that healthcare is more expensive to the ultimate user.

The European Commission said in November that the pharmaceutical groups are blocking the entry of new, cheaper drugs on to the market and that this cost EU healthcare providers, including the National Health Service, an estimated €3bn between 2000 and 2007. It added that it "will not hesitate to open antitrust cases against companies where there are indications that the antitrust rules may have been breached."

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