Patent, schmatent

Gotta say, didn’t see this coming. Recently, Gilead announced “plans to launch authorized generic versions of Epclusa and Harvoni, Gilead’s leading treatments for chronic hepatitis C virus (HCV), in the US, through a newly created subsidiary, Asegua Therapeutics. The authorized generics will launch at a list price of $24,000 for the most common course of therapy and will be available in Jan 2019.” Wait a minute. The patents for these products do not expire for another 10 years. What gives? According to Gilead, “due to the complexity and structure of the US healthcare system, discounts provided by Gilead may not always translate into lower costs for patients.” Take that US healthcare system. That said, we guess Gilead had to try something as they have seen Hep C product sales drop from ~$19B in 2015 to a 2018 estimate of ~$4B. Ouch.

Gambling, drugs, and a smart lawyer

If Albert Einstein was right and “creativity is intelligence having fun” then there is one happy lawyer at Allergan. Last week Allergan, using a move John Grisham would be proud of, transferred its patents on a best-selling eye drug (Restasis) to the Saint Regis Mohawk Tribe in New York. The tribe will then lease the patents back to Allergan. Yep, you read that right. Not bad, first gambling, now patent laundering (you heard that phrase here first). Allergan will pay the tribe $13.75M upfront plus $15M annually as long as the patents remain valid. FYI, Restasis sales were $1.4 billion last year. Obviously, the Mohawk Tribe has no reservations about the transaction. If we are being honest, it’ll be kind of funny when Indian generics companies start suing Indian tribes.

Show me the money

The U.S. President—“Nobody knew health care could be so complicated.” *Sigh*. Sometimes it is so complicated that it is hard to even follow the money.  A recent New York Times article sheds some light on how messy things can be. The premise is that some pharmacy benefit managers and insurance companies are directing patients to take brand name products when there are approved generic options. Whatchu talkin’ bout Willis? With more biosimilars coming to market to “replace” high priced biologic medications, it’s likely that patients and advocacy groups will get vocal. If you look at the top drugs in terms of volume, the word “generic” appears in most of them and you have to get down to #39 before you see Cialis. We will leave it there for another Insight City article.

Healthcare is complicated

A recent NY Times op-ed piece and a corresponding Letter to the Editor talk about how importing generic drugs might lower healthcare costs in the US and stop what the op-ed writer perceives as price gouging. The op-ed position: just do it. The letter to the editor position: not so fast. Relationship status: it’s complicated. There are obvious concerns about drug safety and the US is making strides in protecting the drug supply with its track and trace efforts. That said, the letter to the editor proposed an interesting idea: “…speedily approve any sound generic drug application from a nonprofit entity for a drug whose price has risen sharply.” That’s one idea, but why just from nonprofits? Come on, people. More ideas required! Have an opinion on this? Participate in this week’s FastPoll™ below.