Circling sharks: the Nexium rip-off, Part I
Normally I don't expect to find health information in the New Yorker magazine, but in October Malcolm Gladwell wrote about High Prices of medicines in the column 'A Critic at Large'.
Once upon a time, there was heartburn. People tried antacids to neutralize the acid, then drugs to block the production of stomach acid. Finally, in a land named the AstroZenica corporation, they created a molecule they named Prilosec. They made $26 billion from Prilosec in one five-year period. And among the people of Prilosec, there was much rejoicing, that they had been able to extract so much money from so many heartburn-suffering people. But all was not well in AstraZenicaland. The evil patent-expiration monster threatened to take away all their income in 2001, when their exclusive right to profit from the design of this molecule would be null and void.
In 2001, profits from Prilosec would begin to drop off, and the profit chart would look like the trailing edge of a shark fin. So the lawyers, scientists, and marketing men got together to form a strategy to continue making huge profits, called the Shark Fin Project. And how lucky they were. As it turns out, Prilosec is a two-handed molecule. It comes in two forms, each of which is a mirror image of the other. If you take away one of the hands, the new truncated Prilosec becomes elegible for a new patent! And visions of dollar signs danced in their heads.
And so they did. They cut the molecule in half. They applied for a new patent. They gave the drug a new name. They did a study showing that for one particular condition that occurs in people with excess acid, where the stomach juices gurgle up from below and burn the esophagus, the new amputated Prilosec, called Nexium, worked 3% better than Prilosec. That this difference is insignificant in practical terms did not deter the advertising men and the drug promotion arm of AstraZenica. They put $500 million in their pockets and went out to sell this "new" drug, which was the same molecule as the old drug reduced by half, to doctors and patients for $120 per month's supply.
And so AstraZenica lived happily, if not ever after, at least for the mean time.
This little parable encapsulates much that is wrong with the drug industry -- selling the same old thing with a new name and a new patent, a little modification perhaps, touted as better but really not much better if at all. Since it is a new drug, it will have a high price, to pay for "research and development."
But in a rational world, very few people would buy this drug, because very few would find it more effective than the alternative, the good old Prilosec, which can now be purchased without a prescription at a cost of $20 per month. We obviously do not live in a rational world, and the fault lies not in the AstraZenicas, but ourselves. More about that next time...
Once upon a time, there was heartburn. People tried antacids to neutralize the acid, then drugs to block the production of stomach acid. Finally, in a land named the AstroZenica corporation, they created a molecule they named Prilosec. They made $26 billion from Prilosec in one five-year period. And among the people of Prilosec, there was much rejoicing, that they had been able to extract so much money from so many heartburn-suffering people. But all was not well in AstraZenicaland. The evil patent-expiration monster threatened to take away all their income in 2001, when their exclusive right to profit from the design of this molecule would be null and void.
In 2001, profits from Prilosec would begin to drop off, and the profit chart would look like the trailing edge of a shark fin. So the lawyers, scientists, and marketing men got together to form a strategy to continue making huge profits, called the Shark Fin Project. And how lucky they were. As it turns out, Prilosec is a two-handed molecule. It comes in two forms, each of which is a mirror image of the other. If you take away one of the hands, the new truncated Prilosec becomes elegible for a new patent! And visions of dollar signs danced in their heads.
And so they did. They cut the molecule in half. They applied for a new patent. They gave the drug a new name. They did a study showing that for one particular condition that occurs in people with excess acid, where the stomach juices gurgle up from below and burn the esophagus, the new amputated Prilosec, called Nexium, worked 3% better than Prilosec. That this difference is insignificant in practical terms did not deter the advertising men and the drug promotion arm of AstraZenica. They put $500 million in their pockets and went out to sell this "new" drug, which was the same molecule as the old drug reduced by half, to doctors and patients for $120 per month's supply.
And so AstraZenica lived happily, if not ever after, at least for the mean time.
This little parable encapsulates much that is wrong with the drug industry -- selling the same old thing with a new name and a new patent, a little modification perhaps, touted as better but really not much better if at all. Since it is a new drug, it will have a high price, to pay for "research and development."
But in a rational world, very few people would buy this drug, because very few would find it more effective than the alternative, the good old Prilosec, which can now be purchased without a prescription at a cost of $20 per month. We obviously do not live in a rational world, and the fault lies not in the AstraZenicas, but ourselves. More about that next time...
posted by thevitaminkid | 4:45 AM
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