[CTC] Trade agreement drug monopoly is obsolete given faster, better drug discovery

[Arthur Stamoulis]

https://www.statnews.com/2019/10/02/trade-agreement-10-year-protection-obsolete/

Trade agreement drug monopoly is obsolete given faster, better drug discovery
By JONATHAN KIMBALL
OCTOBER 2, 2019

For decades, the brand-name drug industry has relentlessly promoted the message that any reduction in its government-protected monopolies would have detrimental effects on innovation. Members of Congress on both sides of the aisle have taken that message to heart, largely leaving pharmaceutical monopolies alone as drug prices have skyrocketed.

But even as the innovation narrative is showing cracks in its foundation, and as House Democrats take aim at removing a provision in the United States-Mexico-Canada Agreement that gives drug companies 10 years of guaranteed market protection, the pharma industry continues to flog its stale innovation narrative.

The signed but not yet ratified trade agreement covers virtually every aspect of commerce between the three countries. It currently includes a provision that limits the ability of Congress to decrease monopoly rights for developers of new biologic drugs to less than 10 years. That doesn’t make sense as innovative approaches to research and development for new biopharmaceuticals call into question the necessity of such long periods of protection.

PhRMA, the pharmaceutical industry’s trade group, cites that it takes more than 12 years and an average of $2.6 billion to develop a new drug — and possibly longer for more complex biologic medicines. This 12-year time period is what drug makers point to in order to justify the minimum period of market exclusivity granted by the government to recoup those research costs. Manufacturers have paid for study after study from institutions such as Tufts Center for the Study of Drug Development and Duke’s Margolis Center for Health Policy that back up their claims. These claims, however, are not universally accepted.

Consider a recent study from researchers at Harvard Medical School and Brigham and Women’s Hospital that undermines the monopoly in the trade agreement. It showed that the time needed to develop a biologic drug, which is used to justify the 12-year monopoly period, may not be as long as previously assumed. Or look at a study published in JAMA Internal Medicine by researchers at Oregon Health and Science University and Memorial Sloan Kettering Cancer Center that examined annual financial disclosures from the Securities and Exchange Commission for companies with one cancer drug in the market and an average of three or four in development. Among these companies, it took an average of 7.3 years to develop and obtain Food and Drug Administration approval, at an average cost of $648 million. Only two drugs in this group had development costs over $1 billion.

PhRMA and its allies want us to believe that studies casting doubt on the 12 years/$2.6 billion narrative are unfounded, ill-designed analyses. The truth, however, is that estimating the cost of developing a drug is exceptionally difficult, and no one can prove that PhRMA’s claimed estimate is — or isn’t — accurate. Not Harvard, Tufts, Duke, OHSU, Memorial Sloan Kettering, or PhRMA.

But here’s what’s more important: PhRMA and BIO, the biotech trade association, now routinely promote that drug development is fundamentally changing. That means the facts underlying arguments to justify 12 years of biologic exclusivity are changing as well.

When 12 years of market exclusivity (extended monopoly rights) for biologics was enshrined into U.S. law in 2010, the pharmaceutical and biotech industries were only just beginning to recognize the potential benefits of artificial intelligence, biomarkers, advances in scientific and emerging technologies, and other tools that could be used to make drug development faster, more accurate, and less risky.

A decade later, drug development has been significantly changed. AI is being used to pinpoint drug candidates in three weeks, when it previously took years. Biomarkers are being used to identify patients who will benefit from a therapy, reducing the chance that a drug won’t address their illness.

And mobile technology is allowing clinical trial participants to provide instantaneous feedback to drug developers, supporting adaptive trials that are more likely to result in successful studies or the termination of trials that aren’t meeting their clinical end points, thereby, saving companies hundreds of millions of dollars. According to the Tufts Center for the Study of Drug Development, the early termination of faulty trials based on adaptive designs could alone save companies between $100 and $200 million per year, depending on portfolio size.

While the use of these scientific and technical advances is still at an early stage, the industry itself recognizes that they are having a profound impact on drug development, as shown by the myriad partnerships and projects focused on adopting these technologies into drug development processes.

According to the BenchSci blog, 33 of the world’s largest pharmaceutical companies have engaged in a wide range of AI partnerships and programs to speed drug discovery. In announcing a partnership with AI company Iktos, Belen Garijo, CEO for health care at Merck KGaA, said that “artificial intelligence is emerging as a pillar in the biopharmaceutical R&D model, giving us exponential opportunity to complement our existing expertise with further speed and better precision. For patients, this could mean faster access to novel treatment options.”

But despite recognizing that developments like these will have profound effects on research and development, PhRMA’s advocacy on the trade agreement has not changed. On its own, as well as through organizations like the Pass USMCA Coalitionand the National Association of Manufacturers, PhRMA has aggressively pushed to include the 10-year monopoly provision in the trade agreement, claiming that such a protection period is necessary to encourage innovation. This argument has not proven overly persuasive. In July, 104 members of the House of Representatives wrote to Robert Lighthizer, the U.S. trade representative, opposing the provision.

As technological advances play an increasingly central role in the discovery of new medicines, drug development will become faster, less risky, and cheaper. Such progress means that long exclusivity periods, like those currently included in the United States-Mexico-Canada Agreement, won’t be needed, which will bring down prices through the earlier introduction of generic and biosimilar competitors.

PhRMA’s innovation argument has protected lengthy and expensive monopolies for years. Going into an election year, with enormous political pressure from voters on the president and members of Congress to rein in high drug prices, the industry has a right to be worried that blind support for innovation over pragmatic policy may be ending. The final version of the trade agreement between the U.S., Mexico, and Canada will tell the tale.

Jonathan Kimball is vice president for trade and international affairs at the Association for Accessible Medicines.




-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20191002/1609e301/attachment.html>