Pharma weasel games: Tales of Concerta and Auralgan
© 2011 Roy Benaroch, MD
I’ve been pretty hard on big pharma in the past—drugs account for a huge part of the cost of health care, and drug companies haven’t always been transparent and fair in the way they’ve priced and marketed new medications. They’re businesses, I understand that, and they exist to make a profit. But the way they game the system to take advantage of gullible docs and patients is sometimes sickening. Two recent stories illustrate their weasel games.
Auralgan is an old medication, an ear drop used to treat the pain that comes with ear infections. For decades it was made with two ingredients, and was sold inexpensively alongside several generic versions. The original product was formulated before current FDA standards for marketing prescriptions, so it was “grandfathered in,” basically allowing it to be sold and marketed “as-is” without proof of safety and effectiveness. It seemed to work well enough, and I suppose no one complained.
A few years ago, the manufacturer of Auralgan “reformulated” the product, adding two more ingredients without changing the name. Naturally, they also reformulated the price—now, cheap Auralgan was priced at over $100. Furthermore, because the ingredients had changed, docs who prescribed “Auralgan” found that pharmacies could no longer substitute inexpensive generics, even though the generics had the ingredients that Auralgan originally contained. In one swoop, the manufacturer dramatically increased the price while eluding generic substitution. Clever, huh?
Maybe too clever. This year, US Marshalls swooped into a warehouse in Kentucky, confiscating 16.5 million dollar’s worth of Auralgan. All new drugs must be FDA approved, and “new Auralgan” had never received FDA approval. It was illegal to sell, and it’s now completely off the market.
A bigger company sells a much bigger drug, Concerta. It’s one of the most popular treatments for ADHD, and one of the biggest selling brand-name medications in the USA. But its patent has expired, ostensibly allowing generic manufacturers to sell their own version of the product (presumably at a lower price.) Johnson and Johnson, maker of Concerta, has fought the expiration of their patents for years in the courts, finally losing an appeal in 2010. But get this: after losing their patent-infringement suit against generic company Watson Pharmaceuticals, J&J turned around and cut a deal with its adversary in court. J&J will now be manufacturing, in their own facilities, an “authorized generic” of Concerta to be sold by Watson. Watson, of course, will pay J&J to make their generic Concerta for them. So J&J will in effect be making the profits off of their own, off-patent Concerta, plus the profits off of the “generic”, which will actually be sold by another company pretending to be their competitor. No wholesale prices have been released, but I’m guessing that this generic Concerta will be priced quite similarly to the brand name. J&J wins. You lose.
Tired of the weasel tricks? Would you like to hear about some real ways to save on prescription drugs? Start here.