Thanks to a longtime reader in Germany, I have the scoop from the EU and the respected Frankfurter Allgemeine Zeitung newspaper. In an article about drug prices and drug approvals, titled “The European Pharmaceutical Industry Under Suspicion”, we find (my translation following):
”Die Kommission betonte, bislang lägen keine konkreten Indizien für wettbewerbswidrige Absprachen zwischen einzelnen Herstellern vor. Es sei aber auffällig, dass die Zahl neu angemeldeter Arzneimittel-Patente von durchschnittlich 40 in den Jahren 1995 bis 1999 auf durchschnittlich 28 im Zeitraum von 2000 bis 2004 zurückgegangen sei.
„Wenn innovative Arzneimittel nicht hergestellt werden und kostengünstige Generika zum Teil erst mit Verzögerung auf den Markt gelangen, dann müssen wir nach den Gründen suchen“, erklärte EU-Wettbewerbskommissarin Neelie Kroes.
The Commission stressed that so far there was no concrete evidence of anti-competitive agreements between individual manfacturers. It was striking, however, that the number of new registered patented medicines declined from an average of 40 in the years 1995 to 1999 to an average of 28 from 2000 to 2004.
"When innovative medicines are not being made and cost-effective generics come first on the market only with delays, then we must search for the reasons," said EU Competition Commissioner Neelie Kroes.“
(Update: Here’s more, in English, on the same story.)
Well, I’m glad they’re on the case. Hey, I’m not proud – I’ll take help from anywhere. If a commission of bureaucrats can figure out how to increase our success rates, I’m willing to listen. Mind you, I’m probably going to find something else to do with my time while I’m waiting for Neelie and the gang to get back to us, but still. I note, though, that their other concern is the “delay” in getting generics to market, and I’d like to address those accusations of shady dealing in there.
Here’s a minor problem with that theory: generics come out, on average, rather quickly over here in the US. I mean, right when those patents expire – and the generic companies are often in court, pitching various theories about how the various patents should be expiring even earlier. “Ah,” but you may be saying, “but that’s because prices in the US are so high – they’re looking to scoop up those profits as soon as they can”.
I’m not one to say bad things about the profit motive, of course, and the size of the US market is a big incentive all its own. But here’s something that a lot of people don’t realize, including perhaps members of EU commissions: generic drugs are cheaper in the US than in Europe. We have more expensive drugs on patent, but once they go generic, competition really slices them down, and the generic companies make it up on volume. The profit margin on generics is, last I heard, higher in Europe.
So that would be mighty crafty of the various drug companies, to hold back on entering a profitable market that way. What, then, could be the reason? Regulatory delays, anyone? Courtesy of the same EU superstructure that’s looking into said delays? Think of how many meetings, committees, and conferences it could take to work that one out. I’ll try to speed things up for them: Here in the US, generic companies are free to work on production and regulatory issues even before the relevant patents expire, thanks to the “research exemption”. This has not generally been the case in Europe. There’s also the problem that in many EU member states, generics account for only a tiny bit of the market, apparently due to decisions by the health insurance carriers themselves – which are either arms of the state, or heavily regulated by it.
There, maybe that will help. Of course, if the process of investigating all these suspicions were to move more quickly, the impact would be felt by various restaurants in Brussels and conference hotels all over the place, so we have to consider the economic factors. Good luck, folks!