March 18th, 2010 20:19 EST
Pharmaceutical Companies Hate Generics, Love Money
Biotechnology drugs, or "biologics," are drugs made from living matter, as opposed to chemicals. These drugs currently make up about 20 percent of the pharmaceutical market, but are predicted to make up half in 2015. They are regarded at the future of health care.
However, these drugs are up to 20 times more expensive than generic drugs. For example, a year`s worth of Herceptin for breast cancer treatment can be up to $48,000.
Biologics are pushed ahead of generics in terms of pertinence and lobbying, despite being much more expensive and unattainable to many working class people. However, generic versions of these biologics could be made available, but there`s a problem: Pharmaceutical companies would lose money. Consumers and businesses would save millions in total as opposed to paying full price for the name brand drugs.
A report by Dr. Robert Shapiro in 2008 stated that "generic versions of the top 12 categories of biologic treatments with patent protections that have expired or that are due to expire in the near future could save Americans $67 billion to $108 billion over 10 years and $236 billion to $378 billion over 20 years."
Generics make up 70 percent of all prescriptions, and in a speech given by House Energy and Commerce Committee chairman Henry Waxman to the Generic Pharmaceutical Association, he said "in the last decade alone, generic drugs have saved consumers, businesses and state and federal governments $734 billion."
If generic versions of biologics were made, these cutting edge drugs would become affordable to millions. However, the pharmaceutical companies say they need 12 years of exclusivity to break even on profits.
Biotechnology Industry Organization vice president Jeff Joseph told bizjournal website Portfolio.com that reducing the exclusivity period is "both bad policy and bad precedent. Of all the things that are so contentious in health care reform-whether it`s abortion "this is one of very few issues where there was not only bipartisan consensus "but also bicameral support." He also stated that adding that a shorter exclusivity period would jeopardize innovation, jobs, and U.S. leadership in medicine.
Generic brand medications only make up for 17 percent of all profits, and generic prescription companies are more focused on the hit that consumers will take financially if longer terms of exclusivity are given to brand-names and biologics. Brand names and biologics, however, are more focused on their profits.
They have carte blanche to be worried about their own profits, as some medications can take 10 to 15 years to make and cost up to $1.2 billion to research and develop. In the end, the cash-strapped consumer loses with long-term exclusivity on these biologics, but for the consumer that can easily afford them, they`re a godsend.
This is no doubt a contentious issue, and one should take into account the state of our economy coupled with the business that health care really is. In the end, as long as lobbyists push as hard as they are for these drugs, biologics will win, and you may not see generic versions of these innovative, promising drugs for quite some time. The dollar bill gets the last word, and unfortunately many Americans have to suffer for it.