[Ip-health] Washington Post Wonkblog: "Want to cut health care costs? Start here."
mko at bu.edu
Mon Apr 23 08:57:40 PDT 2012
The underlying paper is from the Archives of Internal Medicine
The blog post that Kliff reported from was Aaron Carroll at
In other news, I'm disappointed to see language in the House PDUFA V
draft. The FDA's mission is drug safety, but the draft requires the FDA
to add ³promoting economic growth, innovation, competitiveness and job
creation among the industries.² I haven't seen the bill language, only an
article in BioWorldToday. If true, this cannot be allowed to stand. H/t
BU Law <http://www.bu.edu/law/faculty/profiles/#o> & BU SPH
Editor in Chief, Journal of Law, Medicine & Ethics
Faculty Associate, Harvard Center for Communicable Disease Dynamics
Blogging health law at The Incidental Economist
Research papers at SSRN <http://ssrn.com/author=340746>
mko at bu.edu
617 353 3103 w
On 4/21/12 4:13 PM, "Steven Knievel" <sknievel at citizen.org> wrote:
>Want to cut health care costs? Start here.
>Posted by Sarah Kliff at 09:00 AM ET, 04/21/2012
>Every year, Americans pay $700 million more for cholesterol-lowering
>drugs than they need to. The reason? Abbott Laboratories.
>Abbott Labs is a pharmaceutical company based in Illinois. About a decade
>ago, in 2000, it faced a problem. The company had recently acquired
>exclusive rights to sell Tricor-1, a cholesterol-fighting drug. It was
>profitable, which was nice, but the best part was this: It was a
>name-brand drug and Abbott was the only company with rights to sell it.
>Drug exclusivity does not, however, last forever: After a name-brand drug
>has five years on the U.S. market, generics are allowed to come in and
>compete. That's what a generic pharmaceutical company wanted to do with
>Tricor-1. Novopharm submitted an application to the Food and Drug
>Administration to produce a generic version of the drug.
>That was bad news for Abbott Labs: With generics tending to sell at about
>80 percent less than brand-name drugs, the new medication had the
>potential to seriously undercut its Tricor-1 business.
>Abbott Labs was able to delay Novopharm by a bit, a story that
>health-care researchers recount in a recent Annals of Internal Medicine
>article. The company filed a patent infringement lawsuit that ate up some
>months, and in the meantime, they came up with Tricor-2. It looked a lot
>like Tricor-1 - same active ingredients, same uses, nearly the same name.
>But there was one hugely important difference: Dosage. Where Tricor-1
>came in 67 and 134-milligram formulations, Tricor-2 would come in 54 and
>By time Novopharm's generic came onto the market, Abbott Labs had already
>rolled out Tricor-2 and made it doctors' prescription of choice. Six
>months after its introduction onto the market, Tricor-2 accounted for 97
>percent of all prescriptions for this type of medication, known as
>Over the past decade, this has happened two more times. Tricor-3 replaced
>Tricor-2. Abbott did get a little creative with the name this last time,
>replacing Tricor-3 with a different dosage branded Tripilix. "As soon as
>direct, generic competition seemed likely at the new dose level, where
>substitution would be allowed, Abbot would launch another reformulation,
>and the cycle would repeat," Yale University's Nicholas Downing and his
>The cost implications of Abbott's strategy are pretty big: The Annals of
>Internal Medicine estimates that, if the health-care system had come to
>rely on Novopharm's generic medication, our health-care system would be
>saving $700 million every year. Overall, the use of generic drugs is
>estimated to save the country $158 billion annually, which breaks down to
>$3 billion a week.
>Part of the blame, the researchers say, goes to doctors, who have
>predominantly stuck with Abbott's brand-name drugs as their prescription
>They call their findings "a cautionary tale for physicians, who must
>accept some responsibility for the continued use of branded [drugs]."
>"Despite the availability of many generics during the past nine years,
>physicians have continued to prescribe Abbott's more expensive
>formulations," they write. "Which in December 2009 accounted for more
>than 75 percent of all prescriptions."
>Some of the issue has to do with the regulatory system, too. Each time
>Abbott Labs faced a new generic, it would launch a patent infringement
>lawsuit. Each time it did that, it would create a huge delay for the
>generic pharmaceutical company, as the FDA requires all applicants to
>have resolved any outstanding patent disputes before seeking approval.
>The more fundamental question, though, is about whether the new dosages
>of brand-name drugs ought to get new exclusivity periods in the first
>place. The new Tricor dosages, after all, never showed improved outcomes
>for patients over previous formulations. Most of them didn't require
>financing for new patient trials or testing. Without the new Tricors,
>we'd have the same outcomes - and $700 million each year in additional
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