Treatments with a twist

Who doesn't know the marketing gambit of razor blade manufacturers - and towelette and diaper manufacturers, for that matter, and all too many more - whereby every few months or years they release a new version of their product, declare it to be he "next generation," and charge far more for it. It basically does exactly the same thing - be it removing unwanted hair or trapping even less wanted secretions. And then for the coup de grace, within a few weeks the original product, with which you had been perfectly satisfied, disappears.

It turns out that this ploy isn't confined to consumer products. In the July issue of the British publication Journal of Generic Medicines, Dr. Gil Tomer writes of a parallel practice in pharmaceuticals, which might be to the greater good of investors perhaps, but not to the community of the ill.

Tomer is the deputy general manager at Unipharm and management member of the Chemical, Pharmaceutical & Environmental Society at the Manufacturers Association. In his article, "Prevailing against cost-leader competitors in the pharmaceutical industry," he discusses the same practice by drug companies that make innovative drugs (as opposed to companies like Teva Pharmaceutical Industries, which make generic - copycat - versions of these innovative drugs.)

He claims that instead of focusing their efforts in recent years on developing wholly new drugs, the "innovative" companies are pouring their investments into revamping existing ones, creating new "state of the art" versions, like the double-bladed razor, instead of the single-bladed one.

All too often the new version is of no greater efficacy vis a vis the patient, Tomer charges. What they achieve is monopolistic protection of their manufacturer, who can extend the lifetime of patent protection and thus block the entry of low-cost generic competition.

When a company invents a new drug that passes all the regulatory and legal challenges, and is patented, the company receives patent protection for a given number of years. During that time, other companies are prohibited from selling copycat cut-price versions. If the original manufacturer makes and obtains approval for a slightly tweaked version, the patent can be extended, blocking generic competition for years.

In Tomer's view, that practice among drug companies - adding years of high-margin income but not adding any benefit to patients - is a betrayal of their mission. The vision of innovators is supposed to be to develop new drugs, he argues. The vision of generic drug companies is to release low-cost versions of the same drugs once patent protection expires, so more people can afford it.

"The problem is that in the last decade, innovative companies are less obedient to their mission, and the number of genuinely new drugs is diminishing," Tomer says.

The drug companies, he says, blame the generic pack, which they argue is breathing down their necks, and regulation, which raises obstacles. "But the truth is that they're diverting budgets from developing new drugs to revamping drugs, because it pays."

Indeed, it does pay for the companies. Investment are smaller, risks are lower, and they can extend the lifetime of the wider margin. Developing a new drug typically costs hundreds of millions of dollars that can be money down the drain if the drug doesn't work.

But there is a social cost of this marketing ploy, Tomer warns. "The price is a double one: the pace of new drugs entering the market is slower, and the entry of considerably cheaper generics is blocked."

One way to achieve a "new" product at relatively little effort is to render the original a little simpler, chemically speaking. The "new" version may include only the active molecule, whereas the original also bore a second molecule.

An example of this is the antidepressant Cipralex, which is none other than a simpler form of Cipramil.

Another way is to slightly change the way the drug is used - officially, this must pass through the regulatory process - for instance by introducing a slow-release version.

As the patent on a drug runs out, drug companies stop pushing them aggressively - and start pushing the new version. Meanwhile, the generic pack is stuck with their copycat version of the original drug which suddenly is losing its allure among healthcare providers.

And the ploy works, too, says Tomer. He provides six examples of drugs that achieved 11 to 20 years of extra monopolistic protection through such tweaks (see table).

Tomer believes the drug companies' behavior is downright unethical. They are de facto tying patients to a more expensive drug for years on end, though much more economical options could have been available.

He has a solution, too: limit the monopoly over revamped drugs. Correlate it to the lesser risk involved in their development. Or, supervise marketing methods.

What do the drug companies say to Tomer's claims?

Guy Gorecki, secretary general Pharma Israel, an organization of R&D-based drug companies, argues that the generic pack are motivated by profit alone.

"The development of each new drug involves tremendous investment and high risk," he says, and that's why their efforts are rewarded by patent protection - so they can recoup their heavy investment through high prices for a certain period of time. Unless they have the opportunity to recoup investment and profit, companies won't develop new drugs, Gorecki continues. No new drugs, no generic drugs.