The Government is Responsible For Sky-High Drug Prices

By: Bharani Padmanabhan – June, 2019

Liberal Lion Ted Kennedy pushed through the 1980 Bayh-Dole Act and the 2009 Biologics Price Competition and Innovation Act. The Bayh-Dole Act allowed private companies to make huge profits off discoveries paid for by the taxpayers, like the billions Novartis made from the Gleevec discovered by Oregon’s public university.

Both laws made the federal government the watchdog that ensured “market exclusivity” for pharma companies.

Even though Ted was already suffering from brain cancer when he pushed through the 2009 act, his strong support for 12-14 years of “market exclusivity” came under criticism because it corruptly supported windfall profits for the Massachusetts biotech industry at the expense of the nation’s patients.

These windfall profits are preserved through policing of the competition by the FDA at public expense. Prices immediately began their stratospheric rise and culminated in Novartis charging $2 Million for its new 1-shot drug, Zolgensma. Gilead’s $84,000 for Sovaldi looks quaint now.
This week Wineinger, Topol et al published a study confirming that the government’s grant of “market exclusivity” is responsible for the high prices.

Payers meanwhile looked for generic versions as if that was the solution. The push for generics resulted in procuring them from factories in China and India. This month a superb new book is out that reveals the utter fraud and perfidy in those factories and how they systematically lie to the FDA. You must read “Bottle of Lies” by Katherine Eban.

The author’s attention to detail is as welcome as her commitment to the patients of our world. This book’s details may be slandered but not denied. It does not pull any punches when it relates the events in numerous pharma plants all over the planet. It is evident that the author has lived the subject of her book for many years.

I was particularly pleased with the details regarding Dr. Dinesh Thakur’s integrity and commitment to Vedic dharmic principles, which led him to blowing the whistle on Ranbaxy to the FDA and the US Attorney for Maryland, at grave physical risk to himself and his family.

Where this book does pull its punches however is when it comes to institutional corruption within the FDA.

That was most certainly a moral obligation that this book failed to fulfill despite clear indications of back-room shenanigans that allowed Ranbaxy to get a new drug application approved, allowed CEO Malvinder to escape criminal prosecution despite the smoking guns handed to the United States by Dr. Thakur, returning to giving the criminals 6-week’s notice of FDA inspections (!!), and most terrifying of all, allowing the caught-in-the-act criminals to continue their fraud in other pharma companies, thereby spreading the muck to even previously-good companies like Mylan. FDA officials are exclusively and individually responsible for that terrible outcome, as is HHS Inspector General Daniel Levinson. One must also question the motives of

the US Attorney…. Rod Rosenstein, who let proven criminals walk despite ample evidence in hand to put them away for years, and killed a great opportunity to show the industry that fraud will no longer pay.

But for our Liberal Lion ensuring that the government polices “market exclusivity” for wealthy pharma and biotech companies, prices would not be this high and Americans would not be exposed to fraudulent drugs manufactured in China and India. Right now we cannot depend on any generics sold in the US. Or on intravenous Heparin either.

Ted Kennedy’s “market exclusivity” clauses must be repealed. Laws must be passed that encourage manufacturing in the United States of cheaper generics as well. Only that will save American lives and money.

Bharani Padmanabhan MD PhD is a neurologist who used to treat multiple sclerosis in the Boston area until the medical board stole his license because he reported Medicare/Medicaid fraud. ◊