[Ip-health] New U.S. Compulsory licensing bill: Zach Carter on "Bernie Sanders And Ro Khanna Have A New Plan To Tackle Prescription Drug Rip-Offs"

James Love james.love at keionline.org
Tue Nov 20 06:05:41 PST 2018


POLITICS 11/19/2018 06:30 pm ET
Bernie Sanders And Ro Khanna Have A New Plan To Tackle Prescription Drug
It’s an attack on Big Pharma’s monopolies.
By Zach Carter

The problem with prescription drugs is simple: The U.S. government bestows
long-term monopolies on pharmaceutical companies, immunizing them from the
forces of market competition and public regulation. As a result, Americans
shoulder the highest drug prices in the world while receiving significantly
poorer public health outcomes than most of the developed world.

There are a lot of ways to address that problem, but a new proposal from
Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Calif.) would attack
prescription drug price-gouging at the source: the government-granted
monopoly that gives Big Pharma unchecked pricing power.

“No other country allows pharmaceutical companies to charge any price they
want for any reason they want,” said Sanders. “Somebody in America today
can walk into a pharmacy and find out that the medicine they have been
using for years can double, triple or quadruple literally overnight. That
needs to change.”

Every year, the United States spends over $1,200 per person on
pharmaceuticals, according to the Organization for Economic Cooperation and
Development. That’s more than double the rate in the United Kingdom and
nearly double the rate in France ― and yet the typical French citizen can
expect to live more than four years longer than the typical American, and
those in the United Kingdom enjoy three extra years, on average, relative
to their American counterparts, according to the World Health Organization.
The disparities are even more dramatic between the U.S. and Scandinavian

In 2015, Bloomberg News compared different countries’ spending on a host of
major prescription drugs. A months’ supply of the arthritis treatment
Humira cost about $2,500 in the U.S. ― roughly 50 percent more than the
same supply of the same drug in Germany, and more than double the price in
Canada and the U.K. The asthma medication Advair runs about $150 a month in
the U.S. — roughly double the price of the same drug in Canada and triple
its cost in Japan. For cutting-edge cancer drugs, prices in the U.S. exceed
those in other countries by several thousand dollars per month.

On Tuesday, Sanders and Khanna will unveil a new bill that would direct the
secretary of Health and Human Services to authorize generic competition for
any name-brand drug whose average domestic cost exceeds the median price in
five reference countries: Canada, the U.K., Germany, France and Japan.

“The government is giving an exclusive monopoly to pharmaceuticals,” Khanna
told HuffPost. “If a company abuses that grant by fleecing American
consumers, then they lose that privilege, that property grant, that subsidy
from the government.”

If the bill — dubbed The Prescription Drug Price Relief Act — were to
become law, experts anticipate that drug companies would dramatically
reduce prices rather than risk ceding market share to a generic competitor.
“No company would want to lose its legal monopoly as a consequence of
charging U.S. residents prices higher than in the reference countries,”
said Jamie Love, director of Knowledge Ecology International, a nonprofit
that specializes in intellectual property issues.

The bill from Sanders and Khanna isn’t going to become law anytime soon. It
faces fervent opposition from Republicans, who will still control the
Senate when Congress reconvenes next year. Even getting a vote in the House
will depend on whether the Democrats in charge of key committees decide to
greenlight it ― a choice that will likely depend at least in part on the
whims of top leadership.

But the legislation nevertheless sends a statement about the priorities of
the progressive wing of the Democratic Party and its intent to deliver on
the campaign promises Democrats issued around the 2018 midterms, including
House Minority Leader Nancy Pelosi’s election night pledge to “take real,
very, very strong legislative action to negotiate down the price control of
prescription drugs.”

American consumers pay far too much for drugs, not because it is costly to
manufacture them, or even because of the expense of research and
development. We pay too much because the U.S. government grants patents and
other monopolies to brand-name drug makers.
Robert Weissman, president of Public Citizen

Pharmaceutical firms typically argue that long-term monopolies are
necessary to justify the money they spend on research and development. And
major drug companies do spend billions of dollars a year on R&D ― but not
nearly as much as they spend on marketing, meaning that most of the costs
recouped by monopoly profits aren’t essential to groundbreaking science.
Nearly all research funded by pharmaceutical companies, moreover,
piggybacks on government-backed research conducted by the National
Institutes of Health. One study published earlier this year concluded that
every one of the 210 new drugs approved by the FDA between 2010 and 2016
relied on at least some government-funded research, reflecting over $100
billion of public investment.

“American consumers pay far too much for drugs, not because it is costly to
manufacture them, or even because of the expense of research and
development,” said Robert Weissman, president of Public Citizen, a public
interest nonprofit. “We pay too much because the U.S. government grants
patents and other monopolies to brand-name drug makers, and then stands
aside as Big Pharma exploits those monopolies to price gouge.”

The United States is in a class by itself on prescription drug costs, but
the five reference countries included in the Sanders bill are a relatively
generous comparison pool. Three of them ― Germany, Japan and Canada ― are
in the top five in per-capita pharmaceutical spending among OECD nations.
International reference pricing is common among wealthy nations, with 29 of
31 European Union nations taking foreign drug prices into account when
considering domestic price policy, according to the European Commission.

Patents on prescription drugs are a longstanding feature of both American
law and international trade agreements, in part due to the outsized
influence of the pharmaceutical lobby within the Office of the U.S. Trade
Representative. But international law provides various exceptions
patent-holders’ privileges when it comes to public health ― which is why so
many countries party to the World Trade Organization and other trade
treaties can obtain lower drug prices than the U.S. does. Though Khanna and
Sanders crafted their bill to crack down on the monopoly, the legislation
would not technically violate a drug company’s patent ― just change the
legal substance of what that patent secured.

“Drug corporations charge us hundreds of thousands of dollars for a drug
that was created with taxpayer dollars because they can,” said Alex Lawson,
executive director of Social Security Works, a nonprofit that works
extensively with Medicare costs and access. “We don’t have to let them rip
us off.”

James Love.  Knowledge Ecology International
http://www.keionline.org <http://www.keionline.org/donate.html>

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