GREED FILES - Gaming a 1980s Law

"How drug companies are gaming an old law for greater profits" PBS NewsHour 12/25/2015

Excerpt

SUMMARY:  In the 1980s, a law was passed to persuade pharmaceutical companies to develop drugs for small populations, but now that rule is being used to reclaim old "orphaned" drugs in order to raise prices and profits.  Gwen Ifill learns more from Sabrina Tavernise of The New York Times.

GWEN IFILL (NewsHour):  We now turn to a story that continues to worry and to anger consumers, soaring drug prices, even sometimes for new versions of old drugs.

The latest case involves a drug that helps treat a rare autoimmune disorder.  Until recently, its manufacturer often offered it at minimal or no cost at all.  But now another pharmaceutical company, Catalyst, says it wants the FDA to approve a modified, and likely more expensive, version of the drug.

I recorded this conversation yesterday with reporter Sabrina Tavernise of The New York Times.

Sabrina, I’m going to start out by asking you to define something that most people have never heard of.  That is orphan drugs.  What are those?

SABRINA TAVERNISE, The New York Times:  The orphan drugs, this is a law that was passed in the early 1980s to try to stimulate development of drugs for rare diseases.

So, it was specifically meant to get drug companies to come up with new ideas and new inventions for small populations of patients that wouldn’t otherwise have been profitable, so it gave some advantages to companies that wanted to — that agreed to develop these drugs.

GWEN IFILL:  And so now what you see is that some of these companies, some companies are repurposing some of these old drugs that were created under this — with this protection under this umbrella for profit?

SABRINA TAVERNISE:  So, essentially, what’s happened, Gwen, is that the — that companies are sort of scouting around in the landscape looking for older drugs to get approved under this law, so, essentially, not really doing any development work, not really doing any of the hard, you know, invention required to come up with something new.  Taking something that was old, that was already on the market and getting it approved, getting it special status under this law.

And so that gets them seven years of market monopoly, which is actually a very, very long period of time for the drug industry.