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Latest New York Times Report On Patents and Drug Prices Misses The Mark

December 13, 2016
BIO is committed not only to reminding the public about the value of innovation and rebutting unfair criticism of our industry, but also to educating the public about the larger biopharmaceutical ecosystem and how  to ensure that today’s breakthroughs are tomorrow’s cures.

I was disappointed to see The New York Times’ report over the weekend criticizing the integral role patents play in spurring investment in biopharma.

Aside from using quotes from a fictional television show to make its point, the report fails to grasp that the healthcare system has changed dramatically from the time when Dr. Jonas Salk refused to patent his polio vaccine.

What many don’t know is that, in today’s environment, it takes hundreds of millions of dollars on average to bring a drug to market—a considerable sum to say the least. And that 1 success may emerge from dozens of failures (that also cost millions) over decades. In fact, our industry spends 5 times as much on research as the National Institutes for Health (NIH).

Let’s look at the track record for drugs that do succeed: HIV/AIDS has been taken from a death sentence to a chronic condition. Hepatitis C—a condition that plagues millions—now can be cured. And patients suffering from forms of cancer that were once thought incurable, have been given new hope.

In order to spur the investment required to develop these cures, it’s critical that investors are assured a single breakthrough will pay for the many failures that came before it. The current law only allows those investors a finite number of years before the innovation—which likely took years of research and over 2 billion dollars—goes off patent and can be developed and marketed as a generic. Thus lowering the price for good.

Despite innovations curing many diseases, countless more conditions have no treatment or cure, and patients are waiting.  Therefore, it’s more crucial than ever that the pipeline of investment continue. Patents are a crucial part of this.

Both Democratic and Republican administration have also rejected the article’s notion that the government has the right to withdraw patents for high prices. And they did that for good reason because when the government controlled patent rights, not a single drug was ever brought to market as a result of federal research.

One final point: the report also implies that drug costs are unsustainable and are an increasingly large part of overall healthcare spending. However—as the article even notes—drugs are just 10 percent overall health spending and are projected to remain at that level into the future.  Hospitals, doctors, and other services contribute a far greater portion than prescription drugs.

In fact, a pair of reports from IMS Health show that not only did branded drug net prices grow in 2015 by just 2.8 percent (in line with inflation), but also gross and net prices for branded drugs are slated to grow more slowly than they have in the past 5 years.

I’m disappointed The New York Times failed to take these points into account when writing their story. However, BIO’s mission to educate media, policymakers, and the general public about our industry and the innovative breakthroughs it provides will continue. Clarifying the mistaken notions in this article gives us that chance once again.