Aaron Carroll, at The Incidental Economist, is fired up about a new article in the Archives of Internal Medicine [subscribers only] that purports to demonstrate how drug companies maintain their dominance in certain markets, even when generic drugs become available.
The standard dance, as documented in the article, goes like this: Company A (Abbott Labs, here) has the exclusive right to a profitable drug (fenofibrate, or Tricor-1, which fights cholesterol). Company B asserts the right to make a generic version, and Company A pushes back legally. As the litigation grinds on, Company A comes up with a slightly modified version of the original drug — perhaps changing the dosage, perhaps making a capsule into a tablet — one that’s no more effective than the original and which it now, again, has exclusive rights to. By the time the generic comes out, everyone has switched to the the new drug (Tricor-2, in this case), so there’s little demand for the cheaper drug.
By the time the generic comes out, everyone has switched to the new drug (Tricor-2, in this case). And when someone wants to make a generic Tricor-2? Yes, you repeat the process.
We’re now on the fourth iteration of Tricor (now rebranded as Trilipix), Carroll explains. Yet if everyone were using the generic of Tricor-1, the health-care system would save $700 million annually.
A point saved for the end of his post, which focuses mostly on the alleged profiteering of companies: Why are doctors prescribing the more expensive tweaked drugs that are no more effective than the generics of the original?