Of Course, the Left Takes No Ownership for This

from Kevin Drum

Today, Aaron Carroll tells us the story of TriCor, aka fenofibrate, a cholesterol drug licensed by Abbott Labs in 1998. Unfortunately, TriCor's patent was due to run out in 2000 and a maker of generic drugs was all set to produce a generic version. So Abbott sued, which delayed the generic version by 30 months:

In the interim, Abbott sought and obtained FDA approval for Tricor-2. That drug was nothing more than a branded reformulation of Tricor-1.Tricor-1 came in 67-mg, 134-mg, and 200-mg capsules; Tricor-2 came in 54-mg and 160-mg tablets. No new trials involving Tricor-2 were submitted to the FDA. But Tricor-2 came out while the generic company was still waiting to make Tricor-1, and thus Tricor-2 began selling with no direct competition.

Six months later, Tricor-2 evidently accounted for 97% of all fenofibrate prescriptions. By the time the generic copies of Tricor-1 came out, no one was taking it anymore, and they couldn’t penetrate the market.

Wash, rinse, repeat. The generic companies petitioned to make generic Tricor-2. Abbott filed a patent infringement suit buying them a 30 month delay. They got to work on Tricor-3. That tablet came in 48-mg and 145-mg doses. No new studies. They got approval. Evidently, 70 days after Tricor-3 was introduced, 70% of users were switched to the new branded drug. By the time the other companies got generic Tricor-2 out, Tricor-3 had 96% of the market.

Apparently, the entire moral blame for this accrues to Abbott, though he admits maybe physicians have some culpability for never prescribing the generic.

Really?  I have no particular desire to defend serial rent-seekers like Abbott, but the farce here seems to be in the regulatory system where small changes in what is essentially the packaging size allow companies to protect a government-enforced monopoly for their product.  Given the enormous difference in earnings between a monopoly product and one with a generic competitor, it is no surprise that Abbott is going to react to these incentives and use the system as presented to it.  In fact, if it did not, its executives would be making a huge ethical lapse in failing in their fiduciary responsibilities.

If you really think this is a corporate greed problem, then why is it that Apple doesn't keep competitors out of the smartphone market by making tiny tweaks to the screen size of the iPhone.  Wait, you say, screen size changes don't act as a barrier to competition?  Of course not.  But then why do changes in capsule size for a given chemical compound?  Because of the involvement of the government.

No, the problem here is not Abbott, the problem is a broken government regulatory system.  And you can pretty much count on Drum and his allies responding to anyone who actually tries to initiate a reform by streamlining this craziness by screaming that they just want to kill people by relaxing government regulations.

  • sean2829

    When I tell people the problem with the health care system is that 1/3 to 1/2 the population has been priced out of the system since the average households healthcare costs is 40% of the median household income. They say we need a single payer government system to take over. This story is another piece of evidence that the government is in fact a very big part of the problem.

  • John Moore

    No, Apple uses bogus patents for its rent-seeking behavior. It's "intellectual property" doesn't pass the laugh test except among the bureaucrats known as patent attorneys and patent examiners.

    Creating superior products isn't good enough for Apple. They also seek to use government bureaucracy to create and maintain a monopoly. Steve Jobs set out to destroy Android because it offended him, and his company is just as evil as Abbott this regard.

    And - to the point - the patent bureaucracy, aided by idiotic rulings by the Supreme Court, is demonstrating again what government power can wreak. At least, in this case, it is not only constitutional, but required by the constitution. But the lawyers, judges and bureaucrats have changed it from a system to encourage innovation into a system to discourage innovation and competition.

  • Dan

    I am going to throw out there that this title could be more constructive. All the points you make in it are solid. The thing is that the title alienates anyone who ever would consider themselves to be on "the left".

    Is the goal of the article to present a thoughtful viewpoint that can be used as an agent of change or is it simply to rant to the the people who already agree with you? The title limits the possible.

    PS - I agree with you.

  • NormD

    Apple keeps its users locked into the Apple ecosystem by encrypting the iTunes database and making it impossible for anyone else to make a device that syncs against it.

    Apple is an evil monopolist. It just has a huge band of religious followers that insist Apple products are the best.

  • Hasdrubal

    How is a change in capsule size non-obvious and non-trivial and hence patentable? Shouldn't someone be able to point to prior art like, say, pretty much every drug ever commercially produced? Or better yet, prior art in the fact that the original was produced in multiple doses?

  • caseyboy

    Dan, I'm becoming more and more convinced that there are very few "thoughtful" people on the left, you excepted of course. The right, or more particularly the libertarians who frequent this site would ask to be left alone to their own devices. To the extent they "rant" it is in that vane. However, the left rants to gather power unto itself via institutions that it controls.

  • me

    LOL - more than 90% of all people are morons, and there are healthy numbers of both on the left and right. If you look at life through a tribal lense, you'll of course always see the idiots on the other side for what they are but take those agreeing with your viewpoint for entirely the wrong reasons on your side out of the equation.

  • Don McGill

    I don't know why everyone misses the real issue here, when it is so obvious. A patent is intellectual property. PROPERTY!!! Why should it ever expire in the first place? It shouldn't, and I'm surprised a libertarian would ever argue otherwise.

    Doing away with patent expiration would significantly lower the cost of patented drugs. A drug company invests a lot of time and money in researching and developing a product and currently has only a limited number of years to recoup its investment as well as making the profit needed to pay for all of their drugs that weren't successful. Why should they be forced to give up their property to a parasitic drug company that cherry picks only the successful drugs? Why aren't the generic manufacturers forced to create generics for the unsuccessful drugs also?

    If you bought land and built a house in which to live on it, would it be fair if you were forced to, after 20 years, let anyone and everyone come in and live in it with you? Wouldn't you consider that a "taking" of your property if you no longer had exclusive use of it? The patent expiration idea needs to be abolished, and everyone will benefit.

  • Jim Collins

    So how much has Abbott donated to the DNC in the last few years?

  • Jeff

    There is certainly a point here, and the work done was some regulatory manipulation, but there is zero understanding of what actually happened. I was working for a generic company when some of this was going on, and while frustrated at their trickiness, we admired the ingenuity of Abbott. They were gradually improving the drug, for relatively low up front costs (probably $7-15 million per reformulation) while also holding off competition for a few more years.

    The newer versions of fenofibrate were micronized (particle size reduced) twice via a somewhat tricky manufacturing process (at that time... it has now become commonplace, as generic companies responded to this case by developing the technology). This allowed the same dose to enter the blood, but by giving the patient less actual drug. Different patients will absorb drugs at different rates and amounts, in particular those drugs with low bioavailability such as non-micronized fenofibrate. This means that high-absorbers may experience significant adverse events above those seen in general clinical trials. By increasing the percentage absorbed and making it more consistent across the board, then giving a lower total dose, you decrease the risk of adverse events.

    Trilipix was a bit more complex, and ultimately what they go sued for. You see, there was an observed interaction between a very popular cholesterol drug (simvastatin) and gemfibrizol (very similar to fenofibrate molecularly) and sometimes fenofibrate itself. The adverse event caused can be fatal. Abbott found a molecule that would convert to fenofibrate, but should not interact with simvastatin. So they made the new formulation.

    This is why 90+% of patients were converted to the new formulations. Not because doctors were fooled, but because they were worried about the side effects of this drug, and the chance to reduce variability in absorption and metabolism was appealing to them. For non-novel new formulations introduced less than 2 years before a generic is introduced for the first formulation, you typically only see 40-60% conversation of a market.

  • Dan

    caseyboy

    Thanks for the response. I have never identified myself as being on the left so maybe your streak continues. My politics are pretty simple: leave everyone alone. Stay out of my wallet and my bedroom. Looks like the "right" doesn't want me either.