Mar 1, 2007, 00:00 AM

10.1111/j.1524-4733.2006.00165.x

https://www.valueinhealthjournal.com/article/S1098-3015(10)60466-4/fulltext

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Section Order : 10

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To the Editor—Lungen and Gerber point to the large relative reduction in German pharmaceutical research and development expenditures noted in my editorial by suggesting that “. . . about 40% of the [pharmaceutical] innovations are mere pseudo-innovations that are no better for the patient, but simply more expensive for the health insurance.” This is a very strange criticism. Suppose the only statin ever discovered had been the innovator lovastatin (Mevacor) under the theory that all other statins are “me-too” and would have been disallowed. Would the patent holder (Merck) have been willing to negotiate with governments or other consumers on price at all? Would the amount of price competition been anything like what it was with simvastatin, fluvastatin, pravastatin, atorvatstatin, and rosuvastatin, also available in the marketplace? It is precisely the approval of “me-too” drugs that erodes the pricing power of the original innovator and makes competition in the pharmaceutical market meaningful. Far from making things more expensive for health insurers, this makes things dramatically less expensive.

Moreover, not all pharmaceutical competition has to take place in price. It was precisely the competitive jockeying for market share between statin manufacturers Merck, Bristol-Myers Squibb, Pfizer, and Novartis that led to numerous valuable scientific outcomes trials as the manufacturers attempted to position their statin agents as clinically superior to the existing therapies. This nonprice competition led to major scientific advances not only in lipid therapy but also in understanding of how arterial plaques cause myocardial infarctions and how the atherosclerotic disease process works [1].

Finally, the categorization of similar drugs as “innovator” and “me-too” is quite arbitrary. Certainly, many of the HIV/AIDS reverse transcriptase inhibitor medications can be classified as “me-too” after the innovator AZT, but they have dramatically improved the available therapeutic options and overcome drug resistance issues that have impacted AZT’s efficacy [2]. Similarly, cimetadine (Tagamet, GlaxoSmithKline, Research Triangle Park, NC) was the “innovator” H2 receptor antagonist (H2RA) in the 1970s, but subsequent H2RAs (e.g., ranitadine (Zantac, GlaxoSmith-Kline)) captured the majority of the H2RA market, precisely because physicians and patients preferred these newer drugs on the basis of approved indications, side effects, drug interactions, or dosing/compliance [3].—Joel Hay, PhD, University of Southern California, Los Angels, CA.

References
1 Hay J, Yu W. Drug patents and prices, can we achieve better outcomes? In: Triplett J, ed., Measuring the Prices of Medical Treatments. Washington, DC: Brookings Press, 1999.
2 Panel on Clinical Practices for Treatment of HIV Infection, U.S. Department of Health and Human Services. Guidelines for the Use of Antiretroviral Agents in HIV-1-Infected Adults and Adolescents. October 29, 2004. Available from: http://aidsinfo.nih.gov/ [Accessed September, 2005].
3 Berndt E, Bui L, Reiley D, Urban G. Information, pricing and marketing in the U.S. anti-ulcer drug market. Am Econ Rev 1995;85:100–5.

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HEOR Topics :

• Decision & Deliberative Processes
• Health Policy & Regulatory
• Health Technology Assessment
• Insurance Systems & National Health Care
• Pricing Policy & Schemes
• Public Spending & National Health Expenditures
• Value Frameworks & Dossier Format

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