This week, India’s National Pharmaceutical Pricing Authority (NPPA) imposed measures that significantly cut the prices of a variety of “essential” drugs, including drugs that treat cancer. These price controls are by no means unprecedented. For decades, the Indian government has worked to keep drug costs low, which has often meant bucking international drug patenting and pricing norms. In doing so India nurtured and developed a massive generic drug industry. While the Indian government must not be admonished for keeping drug costs low, its longstanding obsession with cheap drugs may distract from broader health care accessibility issues.

In 1970, India passed a newly revised Patents Act, which upended the Indian pharmaceutical industry. The act stipulated pharmaceutical patents would only be issued to drugs that exhibited “one or more inventive step(s).” While this language seems relatively innocuous, it totally changed the way in which pharmaceutical corporations conduct business.

Drug patents allow holders to charge high prices because patents ensure market exclusivity for a given period of time. However, in order to maintain market exclusivity, drug companies engage in a practice known as “evergreening.” In most countries, patent laws are such that pharmaceutical companies are able to extend patents and maintain monopolies by making trivial modifications to an already patented product. According to the American Medical Association, these slight alterations allow patent holders to claim they are releasing a new, innovative drug and extend their exclusive rights over said drug “despite the absence of any compelling pharmacologic difference.” In the United States, companies do all sorts of things to “evergreen” drugs including “obtaining additional patents on other aspects of a drug, including its coating, salt moiety, formulation, and method of administration.”

The language in India’s 1970 act is such that companies selling drugs in India would no longer be able to get a patent unless they were offering a new and “inventive” drug. Companies would no longer be able to patent known drugs in an attempt to extend a market monopoly. As a result, a drug that might have enjoyed patent protection elsewhere, would not be protected under Indian patent policy. Soon after this policy shift, India’s generic drug industry exploded, and domestic drug prices plummeted. Before long, India became one of the world’s largest pharmaceutical exporters.

India has made changes to its patent policy over the years, but its generic drug industry continues to operate and thrive under legal conditions set in motion by the 1970 act. Ironically, India’s largest manufacturers are beginning to push back against price-oriented policies that brought them into existence.

While India’s patent polices undermined evergreening practices, price controls were instituted as an additional means of keeping drugs affordable. The creation of a generic drug industry worked to cut costs by undermining market monopolies but, as time went on, India’s most prominent manufacturers of generic drugs were able to brand their products and charge premiums. Price controls were used to ensure these premium prices were not excessive compared to the average cost of other generics.

Whereas India’s patent laws prevent multinational corporations from charging exorbitant prices in monopolized markets, India’s price controls prevent domestic manufacturers of generic drugs from charging more for a drug that bears their brand. Just as multinational corporations argued India’s patent policies stifle innovation, domestic manufacturers arguing that price control affect their ability to operate. In 2012, the government even went as far as suggesting “a future where we will not issue any brand or trade names.”

India’s government should not be criticized for ending price gouging tactics. Multinational corporations should not be able to exclude swaths of people from access to drugs by manipulating patent policy and extending market exclusivity, and cheap generics are crucial in a country where around 78 percent of the population pays for health care out-of-pocket. However, while access to cheap drugs is vital, the government’s health care policy is largely defined by its longstanding obsession with the generic industry and domestic drug prices.

Decades of policies ensuring cheap and readily accessible drugs have helped improve access for many but may have distracted from more holistic attempts at improving health care accessibility. Yet, notwithstanding cheap drug prices, studies have show health care costs are responsible for half of all Indian households falling into poverty. This most recent round of price controls on essential generic drugs came as no surprise, and that might be an issue. India’s pushback to the international patent regime is commendable but cheap drugs should not be treated as the end all be all of health care accessibility.

Callum Cleary

Callum is an editorial intern at Law Street. He is from Portland OR by way of the United Kingdom. He is a senior at American University double majoring in International Studies and Philosophy with a focus on social justice in Latin America. Contact Callum at Staff@LawStreetMedia.com.

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The 21st Century Cures Act easily passed through the Senate on Wednesday by a vote of 95-4. With the inclusion of grants for mental health care and research on cures for life-threatening diseases, the bill enjoyed bi-partisan support in both chambers. Some progressives, like Elizabeth Warren (D-MA) and Bernie Sanders (I-VT), opposed the bill, fearing it could lead to unsafe drugs hitting the market, and could fail to curtail drug costs.

But President Obama, looking to build upon his health care legacy, which includes passing the Affordable Care Act, said last weekend that the 21st Century Cures Act is an “opportunity to save lives, and an opportunity we just can’t miss.” Highlighting the billions of dollars the bill will pledge toward Alzheimer’s and cancer research, as well as funds to combat the opioid epidemic, Obama added: “It could help us find a cure for Alzheimer’s,” and “could end cancer as we know it and help those seeking treatment for opioid addiction.”

Supporters tout the bill as the first major mental health legislation in nearly a decade. Included in the $6.3 billion package is money to create suicide-prevention programs, and grants to increase the number of  mental health professionals, like psychologists and psychiatrists. The bill also designates $1 billion in state grants to combat the opioid epidemic. It also includes a stipulation that is meant to speed up the approval process of breakthrough medical technologies, which is worrisome to some lawmakers who opposed the bill.

“I cannot vote for this bill,” Warren said last week, citing its watered down safety requirements for new drugs. “I will fight it because I know the difference between compromise and extortion.” And on Tuesday, Sanders, a longtime critic of Big Pharma, said “if you want to lower the outrageous cost of prescription drugs, vote against this bill.” He added: “It is time to stand up against the pharmaceutical industry and stand up with the American people who are tired of being ripped of by this extremely greedy industry.”

Vice President Joe Biden was one of the staunchest supporters of the bill, which includes $1.8 billion for the Cancer Moonshot Initiative, parts of which were recently named for Biden’s son Beau, who died last year from a brain tumor.

Alec Siegel

Alec Siegel is a staff writer at Law Street Media. When he’s not working at Law Street he’s either cooking a mediocre tofu dish or enjoying a run in the woods. His passions include: gooey chocolate chips, black coffee, mountains, the Animal Kingdom in general, and John Lennon. Baklava is his achilles heel. Contact Alec at ASiegel@LawStreetMedia.com.

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After last week’s surge of criticism, pharmaceutical company Mylan said Monday it will offer a generic EpiPen for half the price of its branded one. The price of EpiPens, which are used for treating severe allergic reactions, has increased by more than 400 percent over the past ten years. Mylan acquired the product in 1997, when two pens were $94. Today, a two-pack costs as much as $608.

Last week, Hillary Clinton urged Mylan to lower its prices, as kids with food and insect allergies are about to go back to school and are dependent on EpiPens in case of a severe allergy reaction. The pens have a syringe that is filled with the hormone epinephrine, but it expires after a year. Many families keep several pens handy to have at school and at home.

The new generic pen would cost $300 for a pack of two. After the media attention, Mylan also said it will expand its programs that help people pay for the pens, as well as offer $300 copay cards–however these would only be eligible for the branded version of the pens. The assistance programs could be used for both.

The CEO of Mylan, Heather Bresch, defended the constantly rising prices last week, saying that the company only gets $274 from each pair of pens sold. A large chunk of money goes to insurance companies, pharmacies, and others. She also claimed that “no one is more frustrated” than her over the price increase.

Mylan’s CEO responds to EpiPen price criticism: https://t.co/DHDt1bJ5WH pic.twitter.com/g92QatlexI

— Forbes (@Forbes) August 28, 2016

Social media has been in uproar over the company’s greed, arguing that it puts lives in danger. Sarah Jessica Parker announced on Thursday that she’s quitting as Mylan’s spokesperson. Her son has a life-threatening peanut allergy.

Sarah Jessica Parker quits as Mylan spokesperson over EpiPen price hike https://t.co/ZwiydpYkkI

— TIME.com (@TIME) August 26, 2016

Heather Bresch is the daughter of Senator Joe Manchin (D-West Virginia) and reportedly got her job at Mylan because of that relationship in 1992. She moved the company’s headquarters to the Netherlands last year, which entailed a lower tax rate.

Last week, Senator Amy Klobuchar (D-Minnesota), whose daughter is dependent on EpiPens, demanded a hearing over the dramatic price hike.

Emma Von Zeipel

Emma Von Zeipel is a staff writer at Law Street Media. She is originally from one of the islands of Stockholm, Sweden. After working for Democratic Voice of Burma in Thailand, she ended up in New York City. She has a BA in journalism from Stockholm University and is passionate about human rights, good books, horses, and European chocolate. Contact Emma at EVonZeipel@LawStreetMedia.com.

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The recent Ebola outbreak is plaguing thousands across West Africa with illness and even death. In the modern age of science, it seems incomprehensible that there is not yet a vaccine for Ebola. Though the virus is an urgent health concern, pharmaceutical companies have few incentives to develop drugs to combat the disease. Read on to learn what happens when economic incentives do not align with public health needs, and what better solutions may exist for drug development.

What is the status of the Ebola outbreak and vaccine?

Ebola virus disease is characterized by fever, intense weakness, and muscle pain, leading to more severe symptoms. Ebola was initially transmitted by animals and is now spreading between humans through contact with bodily fluids. The outbreak was first detected in Guinea, by which time it had already spread to Liberia, Sierra Leone, Senegal, and Nigeria. A separate outbreak occurred in the Democratic Republic of Congo, which is believed to be unrelated to the outbreak in West Africa. The virus has primarily infected villages where there is extreme poverty and insufficient medical care to combat the spread of the virus.

Statistics

Mortality rates for the Ebola virus are well over 50 percent. Since March, Ebola has killed more than 1,500 people, making it the deadliest outbreak of the virus in human history. The World Health Organization estimates that the Ebola outbreak could affect 20,000 within the next nine months, and that roughly half a billion dollars is needed to stop the spread. Watch the video below for more information on the outbreak:

Vaccines

Ebola first appeared in 1976, yet nearly 40 years later no approved vaccination exists. In part this is due to the nature of the virus. Since incidents of Ebola are rare and occur in remote villages, it is difficult for scientists to effectively obtain samples and study the disease. Scientists cannot predict when an Ebola outbreak will occur, and even during a typical outbreak there are rarely enough people for a vaccine trial.

Since the outbreak, scientists are furiously working on an Ebola vaccine, and requests for approval are being fast-tracked. In the United States, the National Institutes of Health partnered with GlaxoSmithKline to develop a vaccine. The potential vaccine tested very well on primates, but the trial on humans only began on September 1. Initial data from the trial will not be available until late 2014. A number of other prototype vaccines are being worked on across the world.

Other Treatments

ZMapp was the experimental drug given to two Americans who contracted Ebola this year. While vaccines are designed to prevent future infections, ZMapp was designed to treat an existing Ebola infection. Both Americans who took the drug recovered, but the company that manufactured ZMapp has exhausted its supply.

What is the drug development process like?

Developing a new drug or vaccine is an extremely long process due to stringent regulation. Candidates for a new drug to treat a disease range anywhere from 5,000 to 10,000 chemical compounds. Of these compounds, roughly 250 will show promise enough to warrant further tests on mice or other animals. On average, ten of these will then qualify for tests on humans. Since certain outbreaks, such as Ebola, do not lend themselves to have vaccines ethically tested on humans, the United States does provide a way for the drugs to be approved on animal tests alone.

Pre-clinical and clinical development for a new drug takes between 12 to 15 years, though the Ebola vaccine should come much sooner. Pre-clinical development includes testing the various chemical entities and meeting all regulations for use. Three sets of clinical trials are then conducted on humans. Clinical phases include trials on healthy humans to test for the safety of the drug. Testing then moves to those who are ill to see if the treatment is successful. If successful, the drug is submitted for further approval by the Food and Drug Administration. Other countries have similar regulatory bodies to the FDA. Internationally, the World Health Organization oversees which drugs can be used to combat a crisis like Ebola. Learn more details about the development process by watching the video below:

The problem is not that scientists lack the capability to create an Ebola vaccine, but rather that the economics of drug development do not entice companies to develop such a vaccine. Pharmaceutical companies estimate the cost of the entire process of developing a new drug to range from hundreds of millions to billions of dollars. Many times the drugs are not successful, in which case the companies have spent a huge amount of money and have no profit-making product. A Forbes analysis estimates that 95 percent of experimental drugs tested ultimately fail. Only one in five that reach the clinical trial phase are approved.

Given the low rate of success for potential drugs and the huge amounts of money that can be spent on research and development of drugs, cost plays a huge factor. In the United States, basic discovery research is funded primarily by government and philanthropic organizations. Development in later stages is funded mostly by pharmaceutical companies or venture capitalists.

Why do some see funding as a problem?

Funding for areas that support public health is a tricky issue. Since pharmaceutical companies are looking to make a profit, they have an incentive to make drugs that a large number of people will take and be on for a long time. Most research and development for these companies target diseases that affect wealthy people in primarily Western countries.

Targeting wealthier clients leads to a severe underinvestment in certain kinds of drugs. Diseases of poverty cannot compete for investment from financial companies looking for big return. Ebola infects relatively few and primarily affects the poor. Ebola is similar to diseases like malaria and tuberculosis, which kill two million people each year but still receive little attention from pharmaceutical companies. Watch the video below for more on the economics of drug development:

Neglected Tropical Diseases, a set of 17 diseases including Dengue Fever and Chagas Disease, affect more than one billion people each year and kill half a million. Most of these diseases could be completely eradicated, but the drugs are not widely available. One study found that of the more than 1,500 drugs that came to market between 1975 and 2004, only ten were aimed at these diseases.

Even though developing countries may experience an outbreak of a disease, the demand for new drugs is limited. In rural villages in Africa, many reject clinical drugs for diseases such as Malaria and Tuberculosis. Instead, they favor spiritual healers and herbal remedies.

What is being done to promote drug research of neglected diseases?

The Office of Orphan Products Development (OOPD) in the FDA was designed to advance development of products that could be used to diagnose or treat rare diseases affecting fewer than 200,000 people. Orphan diseases do not traditionally receive much attention from pharmaceutical companies. The program provides a tax credit of up to 50 percent for research and development of drugs for rare diseases. When these drugs do become available, however, there is still no guarantee that patients will be able to afford them.

Since 1983 the OOPD program successfully enabled the development and marketing of more than 400 drugs and products. In the ten years prior, only ten of these products came to the market. Learn more about the OOPD with the video below:

Additionally, in 2007 the FDA created a voucher program to encourage research for neglected diseases. If a company receives approval for a drug for neglected diseases, it will receive a priority review voucher to speed up the review time for another application. Only four of these vouchers have been awarded so far.

Are there better ways to fund drug research?

Some argue that researching very rare diseases is not worth the time, and that instead research should be focused on more prevalent diseases. Companies will naturally invest in research for the most pressing concerns that offer the greatest opportunity for profit. Drug development for rare diseases should not be encouraged since the diseases occur so infrequently. Others argue research for rare diseases is essential to public health. The case of Ebola shows that even rare diseases can have a disastrous world impact.

Bioterrorism

Beyond public health, knowledge about the workings of any serious virus or disease is important to combat threats of bioterrorism. Concerns of bioterrorism are what led to Ebola research in the past. Serious threats of bioterrorism force the government to partner with research institutions to learn more about rare diseases. In March, the University of Texas and three other organizations received $26 million from the National Institutes of Health to find a cure for Ebola and the Marburg virus in case they were ever used for a bioterrorist attack. Other groups partnered with the Department of Defense to find an injectable drug treatment for Ebola.

Prizes

Prizes and grants are seen as ways to incentivize companies to develop drugs for diseases they might otherwise ignore. Financial incentives would encourage speedy development for an Ebola vaccine. The World Health Organization has looked into building a prize fund, where a centralized fund would reward drug manufacturers for reaching certain research goals. These tactics are more cost effective for the government, since they only have to pay if the product actually works. By creating grants for specific drugs, the government can pull research into neglected areas. Most prizes and grants, however, are not offered until a severe outbreak occurs, by which time many people are already in need of drugs.

Partnerships

Others point to room for greater partnerships between various entities for drug development. The greatest area for partnerships is between development groups and pharmaceutical companies. For instance, if a company pays to research and develop a product, the government could pay the company for the right to the product and could then promote the product itself without worrying about profit. In another case, GlaxoSmithKline and Save the Children arranged for someone from the charity to be on GSK’s research and development board, so the groups can share expertise and resources.

The Ebola outbreak indicates areas in which our current drug development model is lacking. People are dying because no Ebola vaccine exists. When pharmaceutical companies search only for profits, drugs for rare diseases go neglected. By expanding partnerships and offering greater prizes and financial incentives, the government can encourage drug research for these otherwise neglected diseases.

Resources

Primary

WHO: Ebola Virus Disease

FDA: Developing Products for Rare Diseases

CDC: Experimental Treatments and Vaccines for Ebola

Additional 

CNN: Ebola Outbreak: Is it Time to Test Experimental Vaccines?

Vector: De-risking Drug Development

Guardian: Funding Drug Development for Diseases of Poverty

Reuters: Scant Funds, Rare Outbreaks Leave Ebola Drug Pipeline Slim

Explorable: Research Grant Funding

Vox: We Have the Science to Build an Ebola Vaccine

American Society for Microbiology: Ebola Virus Pathogenesis

NBC: No Market: Scientists Struggle to Make Ebola Vaccines

Wall Street Journal: Two Start-Ups Aim to Change Economics of Vaccine Production

NPR: Would a Prize Help Speed Up Development of Ebola Treatments?

Harvard Global Health Review: Funding Orphan Drugs

LA Times: U.S. Speeds Up Human Clinical Trials

Washington Post: Why the Drug Industry Hasn’t Come Up with an Ebola Cure

New Yorker: Ebolanomics

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

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