4 ms·

That makes bo sense. Why woul rhey abandon a working drug if no one else is interested in manufacturing a knock-off?

by geon 12y ago

Kliment 12y ago
The way it works is approximately this: 1. Your patent on drug A expires 2. You have an active patent monopoly on drug B which is functionally similar 3. You use your giant network of marketing staff to convince medical professionals to use B instead of A 4. The market for A collapses due to lack of demand. The generics manufacturers cannot afford to spend nearly as much bribing doctors, so you don't get an equivalent demand push for generics unless one of the competing large pharma groups decide that the generic is profitable enough to counter the targeted campaign with a targeted campaign of their own. But why would they, when they can milk their own patent monopoly cashcows a bit more using the same marketing spend.
- freehunter 12y ago
  Every insurance policy I've ever had has stipulated that if a generic is available, the insurance will not pay 100% for the brand name drug. Wouldn't that be enough to keep generics in business?
  - Kliment 12y ago
    This only applies if the active ingredient is the same molecule in the generic and the brand-name drug. Because drug B is has a patent monopoly scaring people off making generics, this is never the case.
    - twoodfin 12y ago
      In 2012, 84% of dispensed drugs in the United States were generics.[1] Yes, the original manufacturer often spends money to develop follow on versions that can qualify for new patents, but this isn't always an effective strategy. When it is, it's usually because the follow on version has substantial benefits for patients (e.g., monthly infusions at the doctor's office instead of weekly). If those benefits aren't there, insurers can and will decline to cover the new form of the drug and insist on the generic. [1] http://www.nytimes.com/2013/03/19/business/use-of-generics-produces-an-unusual-drop-in-drug-spending.html?pagewanted=all&_r=0 http://www.nytimes.com/2013/03/19/business/use-of-generics-p...
- maxerickson 12y ago
  How dysfunctional are these doctors? I was in urgent care last week for a foot injury, and right on the wall in the exam room were some awareness posters about Ebola and antibiotics, yet every time a discussion of some awareness issue comes up, people talk about how doctors aren't even on top of things (maybe I'm stretching a bit to call generics vs marketed an awareness issue, but I don't think so). (My foot is fine, I got a cold, yay hospitals)
  - damon_c 12y ago
    Programmer's inboxes are filled with emails from recruiters. Doctor's inboxes are filled with emails from drug company reps offering to take them out to play golf and fancy dinners and give them boxes of free samples of the drugs made by the companies they rep. Those companies don't sell the low cost generics! (source: a relative of mine is a drug company rep!)
    - maxerickson 12y ago
      That's what I meant by dysfunctional. Dinner with some boring company rep hardly sounds like something a person needs to do weekly.
      - jblow 12y ago
        Do you think they hire boring people to be reps? If you were in charge of hiring the most effective people for this job, who would you hire?
        seanp2k2 12y ago
        Prostitutes and stand-up comedians. I'd also make an exclusive club at the airports for doctors who sell my drugs.
        logfromblammo 12y ago
        My replacement. I'd want to hire people who are knowledgeable about pharmaceuticals and are able to accurately and intelligently answer questions about research studies and side effects. But an effective person would probably hire hot chicks and chatty dudes and give them big expense accounts.
logfromblammo 12y ago
Because if they invest enough in marketing and regulatory compliance to keep it profitable, a generics manufacturer will immediately spin up and drink that milkshake. If they abandon it, and no generic is produced, patients are forced to the patented alternatives. The drug companies don't want to compete with their own products if they can avoid doing so.
arebop 12y ago
I see discussion in this thread about what makes sense or seems reasonable, but no empirical observations. Two examples that come to my mind would be acetaminophen and coral snake antivenin. The former is widely available as a generic, the latter is extremely scarce in the U.S. in part because its manufacturer fears competition. Maybe someone can add more examples or help explain the different outcomes for these two?
- dragonwriter 12y ago
  > Maybe someone can add more examples or help explain the different outcomes for these two? The different outcomes are largely explained thus: Drugs with a very large demand and especially ones which are OTC and around which consumer brands can be developed (where brand identity allows a premium to be charged, substituting in some degree for the monopoly rents patents allow) are likely to continue to be manufactured after patents expire. Prescription drugs with a limited demand even if they are the best (or only) effective treatment for a particular condition are less likely to continue to be produced once patent protection expires..

That makes bo sense. Why woul rhey abandon a working drug if no one else is interested in manufacturing a knock-off?

by geon 12y ago

That makes bo sense. Why woul rhey abandon a working drug if no one else is interested in manufacturing a knock-off?

The way it works is approximately this: 1. Your patent on drug A expires 2. You have an active patent monopoly on drug B which is functionally similar 3. You use your giant network of marketing staff to convince medical professionals to use B instead of A 4. The market for A collapses due to lack of demand. The generics manufacturers cannot afford to spend nearly as much bribing doctors, so you don't get an equivalent demand push for generics unless one of the competing large pharma groups decide that the generic is profitable enough to counter the targeted campaign with a targeted campaign of their own. But why would they, when they can milk their own patent monopoly cashcows a bit more using the same marketing spend.

freehunter 12y ago
Every insurance policy I've ever had has stipulated that if a generic is available, the insurance will not pay 100% for the brand name drug. Wouldn't that be enough to keep generics in business?
- Kliment 12y ago
  This only applies if the active ingredient is the same molecule in the generic and the brand-name drug. Because drug B is has a patent monopoly scaring people off making generics, this is never the case.
  - twoodfin 12y ago
    In 2012, 84% of dispensed drugs in the United States were generics.[1] Yes, the original manufacturer often spends money to develop follow on versions that can qualify for new patents, but this isn't always an effective strategy. When it is, it's usually because the follow on version has substantial benefits for patients (e.g., monthly infusions at the doctor's office instead of weekly). If those benefits aren't there, insurers can and will decline to cover the new form of the drug and insist on the generic. [1] http://www.nytimes.com/2013/03/19/business/use-of-generics-produces-an-unusual-drop-in-drug-spending.html?pagewanted=all&_r=0 http://www.nytimes.com/2013/03/19/business/use-of-generics-p...
maxerickson 12y ago
How dysfunctional are these doctors? I was in urgent care last week for a foot injury, and right on the wall in the exam room were some awareness posters about Ebola and antibiotics, yet every time a discussion of some awareness issue comes up, people talk about how doctors aren't even on top of things (maybe I'm stretching a bit to call generics vs marketed an awareness issue, but I don't think so). (My foot is fine, I got a cold, yay hospitals)
- damon_c 12y ago
  Programmer's inboxes are filled with emails from recruiters. Doctor's inboxes are filled with emails from drug company reps offering to take them out to play golf and fancy dinners and give them boxes of free samples of the drugs made by the companies they rep. Those companies don't sell the low cost generics! (source: a relative of mine is a drug company rep!)
  - maxerickson 12y ago
    That's what I meant by dysfunctional. Dinner with some boring company rep hardly sounds like something a person needs to do weekly.
    - jblow 12y ago
      Do you think they hire boring people to be reps? If you were in charge of hiring the most effective people for this job, who would you hire?
      - seanp2k2 12y ago
        Prostitutes and stand-up comedians. I'd also make an exclusive club at the airports for doctors who sell my drugs.
      - logfromblammo 12y ago
        My replacement. I'd want to hire people who are knowledgeable about pharmaceuticals and are able to accurately and intelligently answer questions about research studies and side effects. But an effective person would probably hire hot chicks and chatty dudes and give them big expense accounts.

logfromblammo 12y ago

Because if they invest enough in marketing and regulatory compliance to keep it profitable, a generics manufacturer will immediately spin up and drink that milkshake. If they abandon it, and no generic is produced, patients are forced to the patented alternatives. The drug companies don't want to compete with their own products if they can avoid doing so.

arebop 12y ago

I see discussion in this thread about what makes sense or seems reasonable, but no empirical observations. Two examples that come to my mind would be acetaminophen and coral snake antivenin. The former is widely available as a generic, the latter is extremely scarce in the U.S. in part because its manufacturer fears competition. Maybe someone can add more examples or help explain the different outcomes for these two?

dragonwriter 12y ago
> Maybe someone can add more examples or help explain the different outcomes for these two? The different outcomes are largely explained thus: Drugs with a very large demand and especially ones which are OTC and around which consumer brands can be developed (where brand identity allows a premium to be charged, substituting in some degree for the monopoly rents patents allow) are likely to continue to be manufactured after patents expire. Prescription drugs with a limited demand even if they are the best (or only) effective treatment for a particular condition are less likely to continue to be produced once patent protection expires..