Tech

Hit the books: How Ronald Reagan hit a torpedo to get a reasonable drug patent


American pay two and a half times for their prescription drugs than residents of any other country on Earth. Although generic versions of popular compounds account for 84% of annual U.S. sales in 2021, they generate only 12% of real dollars spent. The rest of the money goes to brand name drugs – Lipitor, Zestril, Accuneb, Vicodin, Prozac – and we have the Reagan Administration in part to thank for that. In the below excerpt from Owning the Sun: A People’s History of Medicine Exclusively From Aspirin Vaccine to COVID-19 Vaccine, Author Alexander Zaitchik recounts former President Reagan’s court-packing antics from the early 1980s that helped cement a lucrative monopoly on brand-name drugs.

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Copyright © 2022 by Alexander Zaitchik, from Owning the Sun: A People’s History of Medicine Exclusively From Aspirin Vaccine to COVID-19 Vaccine. Reprinted with permission of Counterpoint Press.


When Estes Kefauver died in 1963, he was writing a book on monopoly power called In a few hands. Early in Reagan’s first term, the industry must have been tempted to publish a gloating rebuttal titled in a couple of years. From 1979 to 1981, the pharmaceutical companies did more than break the deadlock of the 1960s and ’70s – they broke it widely. Stevenson-Wydler and Bayh-Dole replaced the Kennedy policy with a framework that works for the high-speed transfer of public science into private hands. As full machines were built, the industry-sponsored echo chamber introduced a constant stream of memes into the culture: patents alone fueled innovation… R&D demanded proprietary pricing.. America’s progress and competitiveness depend on it … there is no other way…

In December 1981, pharmaceutical companies celebrated another long-awaited victory when Congress created a federal court to deal with patent disputes. In the past, patent disputes have been adjudicated in the counties where they originate. From an industry perspective, the problem is the presence of too many serious New Deal judges in key areas like New York’s Second Circuit. These lifelong judges often understand patent challenges not as a threat to property rights, but as an opportunity to enforce antitrust law. Local Republican-appointed circuit judges can also be dangerously out of date in their interpretation of the “novelty” standard. In contrast, the judges of the new patent court, known as the Court of Appeals for the Federation, are appointed by the president. Reagan filled his bench with corporate patent attorneys and conservative legal scholars influenced by the Johnny Appleseed movement in Law and Economics, Robert Bork. Before 1982, federal judges had dismissed about two-thirds of the patent claims; The Court of Appeal has since decided two-thirds of the cases in favor of the patent claims. Reagan’s first appointee, Pauline Newman, was a former principal patent advisor for the chemical company FMC.

The Supreme Court also contributed to the industry’s 1979–1981 victory. When Reagan took office, one of the great legal-scientific unknowns involved the patentability of edited genes. Similar to the uncertainty surrounding the post-war antibiotic market – resolved in the industry’s favor by the Patent Act 1952 – uncertainty threatened the biotech sector’s dream of monopoly. emerging learning. The US Patent Office has resisted patenting the modified genes. In 1979, its officials twice rejected an attempt by a General Electric microbiologist to patent a modified bacteria invented to aid in oil spill cleanup. GE scientist Ananda Chakrabarty sued the Patent Office, and in the winter of 1980, Diamond’s lawsuit against Chakrabarty landed before the Supreme Court. In a 5–4 decision written by Warren Burger, the Court upheld the U.S. Patent Office and ruled that edited genes could be patented, as well as “anything under light” man-made sun. The decision was greeted with gasps heard by the players in the Bayh-Dole alliance. “Chakrabarty is a game changer, providing academic entrepreneurs and venture capitalists with the protection they have been waiting for,” said economist Öner Tulum. “It paves the way for the wider commercialization of science.”

But the industry knows better than to relax. It understands that political victories can be impermanent and fragile, and it has the scar tissue to prove it. Uniquely profitable, uniquely hated and therefore vulnerable – companies cannot forget that their great wealth and power after the war depended on the maintenance of artificial monopolies based on on economic and ethical arguments questionable, if not indisputable, by every other nation on Earth. In the United States, where their profit margins are greatest, danger lurks behind every nook and cranny in the form of the next crusader senator eager to train years of unwanted attention on events. this. Even Bayh-Dole, the precious statute for babies, is not taken for granted. This mode of permanent crisis was attested to by the return of a familiar threat in the early 1980s. Of all things, it was the generics industry, an old but weak enemy of patent-based drug companies, have resurfaced and threatened to ruin their celebration of achieving domination over every niche of medical research and billions of dollars of publicity. flow through it.

***

In the late 1930s, there was no “generic” drug industry to talk about. There are only big drug companies and small ones, some of them big, others little known. Both sell products that are, in ethical medical parlance, “non-proprietary.” Listed in the United States Pharmacopeia and National Directory, the official bible of prescription drugs, drugs can only bear scientific names; The basic attributes of a good scientific name, according to the first edition of the Pharmacopoeia, are “expression, brevity, and dissimilarity”. The naming of drugs and pharmaceuticals forms the other half of the patent taboo: branding a drug demonstrates lust and greed akin to monopolizing a drug. medicine. “Ethical marketing” rules allowed products to include an affiliated organization — Parke-Davis Cannabis Indica Extract, or Squibb Digitalis Tincture — but the names of the drugs themselves (marijuana, digitalis). ) no different. Joseph Gabriel writes: “The common name emerged as a parallel form of social property that belongs to all that is anti-commodity and thus occupies a central place in debates over monopoly rights.

As well as patents for scientific medicine, the Germans soon gave the US pharmaceutical industry the instructions to use the trademark to gain control of the market. Hoechst and Bayer broke all the rules of so-called ethical marketing, aggressively advertising their breakthrough drugs under brands like Aspirin, Heroin and Novocain. The idea is that by incorporating these names and what they represent in the public mind, the brand name will guarantee de facto exclusivity long after the patent has expired.

The strategy worked, but the German companies did not reap the benefits. The Wartime Foreign Property Office redistributed German patents and trademarks to domestic companies that produced competing versions of aspirin, creating the first “branded generic drug”. During the prolonged death of patent taboo in the interwar years, many U.S. companies encroached on the use of original trademarks to stave off competition. When they experimented with German tactics to avoid “genericity” – losing market after a patent expires – they were triggered by court decisions turning trademarks into hard, analogous property. like how patents were received back in the 1830s.

After World War II, branding and exclusivity formed the double-valve heart of a post-ethical growth strategy. The industry’s staggering success after the war – between 1939 and 1959, drug profits skyrocketed from $300 million to $2.3 billion – was largely driven by book expansion. of Germany. While building exclusive brands by trade names, the industry has initiated campaigns to damage the reputation of scientifically identical but competing products. Historian Jeremy Greene writes: The aim was “notoriety” for conventional drugs. Pharmaceutical companies “have worked methodically to centralize and sensationalize conventional drug distribution as a dangerous and subversive activity. Making an unbranded product in place of a branded product is considered a ‘fake’; The act of substituting a cheaper version of a drug at a pharmacy described as ‘artificial’, ‘relevance’, ‘misrepresentation, ‘fraud’, ‘unethical’ and’ unethical. ”

As well as patenting, it was the drug companies that dragged organized medicine with them into the post-ethical future. In late 1955, the AMA’s Board of Pharmacy and Chemistry upheld a ban on advertising for branded products in its Journal. That changed the year Equanil hit the market, ushering in the age of brand-name prescription drugs as a top source of revenue for medical journals and associations. “Clinical journals and newer promotional media are now more filled with advertisements for Terramycin, Premarin and Diuril than for oxytetracycline (Pfizer), conjugated equine estrogens (Wyeth) or chlorothiazide (Merck),” writes Greene. . In 1909, only one in ten prescription drugs had a brand name. By 1969, this ratio had changed, with only 1/10 being marketed under its scientific name. In another echo of the patent controversy, the rise of marketing and branded drugs has created division and resistance. In the mid-1950s, a coalition of so-called nomenclature reformers arose to denigrate trademarks as custodians of unscientific monopolies and to call for a return to the use of scientific names. learn. These innovators – doctors, pharmacists, labor leaders – regularly appeared before the Kefauver committee starting in 1959. Their testimony about how the industry used trademarks to stifle competition was announced the part of Kefauver’s original bill requiring physicians to use the scientific name in all prescriptions. The proposed law reflects standards that existed during the golden age of ethical medicine and would allow doctors to recommend companies, but not products that carry their brands. However, like most of Kefauver’s core proposals, the general clause has been dropped. The only trademark-related reform in the Kefauver-Harris Amendment finally placed limits on companies’ ability to rebrand and market the old drug as a new foray.

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