25 years on, was Hatch-Waxman such a great idea? Dried-up small-molecule pipelines, the endless search for blockbusters at the expense of innovation, in-licensing from smaller innovative companies–just what you’d expect from a law that had the unintended effect of shutting down innovation.
Many people point to Hatch-Waxman as a model for legislation that combined patent protection and market exclusivity (necessities for innovation) with a common-sense pathway to generics. But has that turned out to be the case? From the time a patent on a new molecular entity (NME) is filed until FDA approval can easily eat up all but 7 or 8 years of a 20-year patent life. Is it a coincidence that within a few years of Hatch-Waxman, every pharma company was looking for the next Prozac, the next statin, the next ACE inhibitor or ARB? In other words, blockbusters to recoup the hundreds of millions of dollars it takes to develop a new drug–and do it quickly.
It doesn’t help that generic companies are roughly half lawyers, poring over patents the moment they’re released, looking for problems or ways to horn in on innovator research. As a result, effective patent life is reduced even further in many cases. Is it any wonder that small-molecule pharma companies have turned to incremental improvements, enantiomers (for example, Clarinex from Claritin, Lexapro from Celexa, Nexium from Prilosec, etc.), to extended-release variations, or to metabolites (Pristiq from Effexor)?
In each case, the original was a blockbuster drug, and in many cases, the incremental improvement made a real difference for many patients. Just ask someone who couldn’t tolerate or “pooped out” on Celexa and switched to Lexapro–let alone the many patients who were able to switch to a completely different medication in the antidepressant class because of all the options available.
Part of the problem was the the HMOs and PBMs didn’t see it that way, and don’t allow patients choices in these categories. Why? Because older generics are available, and newer medications are put in higher “tiers,” with higher co-payments. According to the Kaiser Family Foundation, more and more patients now have Tier 3 or even Tier 4 medications, many with co-insurance (in which patients pay a percentage of the drug cost) rather than co-payments (in which patients pay a fixed amount per prescription).
But tiers aren’t nearly as bad as “step therapy” or “prior authorization.” By requiring patients to fail on certain drugs (usually the ones available as generics), payers are essentially practicing medicine and engaging in therapeutic substitution. Just ask a psychiatrist who had someone who couldn’t tolerate sertraline (Zoloft) but is doing fine on Celexa, or hypertensive patients kept on ACE inhibitors (with that persistent dry cough) while the ARBs weren’t yet generic. Even more reason to make sure that first molecule is a blockbuster.
Problem is, at many small-molecule pharma companies, marketing controls R&D. Marketing can tell researchers to find the next statin or the next antidepressant, or to look into controlling obesity–in other words, look for whatever will sell, not wherever the research is leading. That’s why some of the most amazing new drugs are now coming from biotech, or from universities or smaller companies that do in fact follow the research. Nexavar, in-licensed by Bayer from the University of Georgia, is making real improvements in the lives of people with hepatic cancer, and is showing promise in a range of cancers. Tracleer, developed by a small pharmaceutical company, is turning a little-known disease (pulmonary arterial hypertension) that used to be a death sentence into a more manageable condition.
This is real progress, and despite the fact that these medications make money, it’s not “Zoloft-license-to-print-money” kind of money. But it’s a lot, and the medications help patients. Hatch-Waxman may very well have given us $4 Wal-Mart generics, but it may also very well have taken away hundreds of life-saving drugs for smaller patient populations, which became uninteresting to big pharma chasing the next blockbuster to stay profitable in the post-Hatch-Waxman era.
Pharmadude 