----- Original Message ----- From: "Deborah Harrell" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[email protected]> Sent: Thursday, September 22, 2005 4:38 PM Subject: Re: Sources of Drug Innovation - a tiny snippet
> WRT patents, since the gov't isn't in the drug > production business, I would not expect it to hold any > at all (except for maybe vaccines, and *of course* > those drugs that create SuperSoldiers from ordinary > folk <grin>). Why not? Drug patents are applied for very early in the process. If someone hasn't applied for a patent on a potential drug when it is first conceived, then there is absolutely no protection until the patent is applied for. Indeed, if company A waits until the early trials are successful to patent (say 3 years into the development), then company B could patent the drug and leave company A holding the bag. So, if the government finds a drug that just needs to go through the development cycle, it could patent it, license a private company for development, and split the profits. For a truly innovative drug, the time from conception and patent application to first sales is typically about 10 years or so. That leaves 10 years on patent before generics can compete. A knock off drug, say the second satin drug, could probably go from first conception/patent to sales in less time, say 2 years less. But, one would expect the decision to knock off to not take place immediately; but after the first successful commercial trials. So, we could get the following: a truly innovative drug is patented in 2000 by company A. By 2004, the first trials look good and company B decides to do a knock off. By 2005, they get their patent. In 2010, company A gets approval and has a monopoly. In 2013, company B gets it's patent, and the monopoly is gone. They compete, possibly with other companies coming in, until 2020, when the first drug goes off patent. Company A has spent a lot more money than company B: say 800 million vs. 400 million as a reasonable guess. But, it is in a better position, with a monopoly for 3 years and competition with a patented drug for 7, vs. competition with a patented drug for 7 and competition with generics for 5. The only way to successfully compete against generics is to be substantially better than them. When someone thinks about paying 10x more for the patented drug, they ask "how much better is it?" >From what I've been told, this has happened with satins. Lipotor works much better than the original satin, so it has high sales, even though the first satin is generic. Another knock off, I've learned, was developed at the same time. Very late in trials it was found to have a high rate of fatal complications, and it was pulled off the market. Again, from what I've understand, only minor tweaks separated the original drug and the two knock-offs. The tweaks were enough to have tremendous impact on the usefulness of the drug. The original satin made a profit, Lipitor is a multi-billion dollar profit machine, and the third drug has to be written off as a hundreds of million dollar mistake. During my research, I found out that drug R&D is in a more primitive state than I thought. The programs I had talked about turned out to be a multi-billion investment with no real return. It still seems to be a matter of throwing molecules against a wall and seeing what sticks. In that environment, and with small changes in a drug often effecting massive changes in the results, the reasonable MO is to patent every chemical that you think might work, and proceed to go through initial tests until a candidate for development is found. In this cost environment, it is easy to see why antibiotics are not high on the list for new drug development. Hundreds of millions of dollars are invested in a drug, which might never see commercialization. Clearly, the further one goes in tests, the more promising a drug is seen to be, but a 200 million gamble on a chance in 4 to chance in 5 drug seems not atypical. Unless a new antibiotic generates billions in income, the economics now disfavor investments in such a drug. In such an environment, we may need to turn to the government for development. But, this will be much less cost effective, even if we consider advertising and high profits as part of the cost of private development. I'd be interested in a thread that discusses why this occurs, but for now I'll just state it as a well verified empirical hypothesis. Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
