Big Pharma already has a generic strategy, but needs new direction

16 Mar Big Pharma already has a generic strategy, but needs new direction

In his February 14, 2005 article, Michael Rosen argues that Big Pharma “will be forced into generic-drug strategy,” and suggests that this will be a good thing. But Big Pharma already has a generic drug strategy for traditional pharmaceuticals. This strategy has not been particularly good for anyone, even Big Pharma. No one will be well-served if Big Pharma adopts this same strategy for biopharmaceutical “biotech” drugs if at least some “biogenerics” eventually are approved.
In 1984, Congress created, with the enactment of the Hatch-Waxman Act (otherwise known as the Drug Price Competition and Patent Term Restoration Act), an active generic drug industry and provided Big Pharma with the opportunity to get a bigger reward (i.e., longer periods of market “exclusivity”) for their novel drugs.
After a slow start, including a period known as the 1990 Generic Drug Scandal, the generic drug industry has come into compliance and provided quality generic drugs. But not all generic drugs are of the same quality as the brand name drug, and this can make a huge difference in therapeutic outcomes. Generic companies need to do a better job of explaining to the public the real differences between their drugs and the innovator drugs. If biogenerics come into being, this will be an even bigger issue.
Big Pharma, on the other hand, has tried to delay the onset of generic drugs and mitigate their effects by filing administrative and judicial challenges to generic approvals. Big Pharma has, in some cases, also tried to deliver generics themselves. But generics are not as profitable as a new chemical entity or a breakthrough drug. A substantial portion of Big Pharma’s revenue is dependent on blockbuster drugs. This means that Big Pharma is constantly looking for new blockbusters to take the place of drugs that will be coming off patent or exclusivity protection and become subject to generic competition.
Blockbuster drugs have provided valuable therapies ranging from non-sedating antihistamines, cancer treatments, pain relief and, yes, even erectile dysfunction. But the number of conditions that could give rise to a blockbuster drug is limited. Countless medical conditions exist that lack adequate treatment or would benefit from improved treatment. Big Pharma does not have sufficient incentives to bring to market treatments in those areas.
Moreover, with advances in science and techniques, it has become easier to identify drugs that will not survive the scrutiny of the Food and Drug Administration’s approval processes. Research has become less cost effective, and Big Pharma has become increasingly reliant on modifying existing products to make once-a-day therapies, new dosage forms, and the like, both to extend exclusivity and patent protection, and to convince consumers and doctors to not take or prescribe the generic.
So Big Pharma already has gone far beyond developing a generic strategy and, as a result, is increasingly driven by the blockbuster drug. This has resulted in some important therapies, but leaves many important areas ignored. Big Pharma is a business, not a charity. Yet Congress has not seen fit to create sufficient incentives for companies to spend time and money (and lots of it, because it is so expensive to do drug development research) on drug development for conditions and uses that really matter, like vaccines and paralyzing diseases that are passed on through generations.
But while more incentives for better drugs are important, we should not forget the role that the National Institutes of Health and other government bodies can play in conducting and supporting research that will never be done by Big Pharma, such as the benefits of eating certain foods or consuming certain herbs utilized in different cultures, yet not understood by Western Civilization.
More can and should be done to encourage healthier eating and exercising among the American population. With a healthier population, there will be less need for drugs to treat for conditions such as obesity-induced diabetes. More resources should then be available to develop drugs for other conditions such as cancer and macular degeneration.
The bottom line is that we do not need Big Pharma to have a generic drug strategy. Big Pharma needs to broaden its focus with a push from Congress. And the government also needs to focus on ways to make America healthier without pharmaceuticals.