Profits, Patents, and Seniors: A guide for policymakers

Published August 30, 2002

The U.S. House of Representatives passed Medicare prescription drug benefit legislation, only to have it defeated in the Senate. AARP—the nation’s largest organization of senior citizens—issued a statement endorsing the passage of a drug benefit, but demanding higher spending and more generous coverage. AARP wants all of its members—all seniors, in fact—to enjoy good health and access to prescription drugs.

Or does it?

Over the past two months, AARP has embarked on a course of action that could undermine its own goals, announcing it will join several class-action lawsuits aimed at lowering prescription drug prices. AARP similarly announced it would join lawsuits to challenge drug companies’ marketing of brand-name pharmaceuticals in order to make “generic drugs more readily available to consumers.” An AARP board member, Dr. Beatrice Braun, was quoted as saying the organization would seek to “stop the abuse of drug patent laws.”

In my eight years as New York City’s commissioner on aging, I collaborated with and came to respect local AARP staff and volunteers. Unfortunately, the national AARP’s litigation campaign against prescription drug advertising and the patent rights of research-based pharmaceutical companies is a stiff dose of snake oil.

Intellectual Property Rights

During my tenure, I visited with many of New York City’s 1.3 million senior citizens. Especially before September 11, sentiment ran high for Medicare prescription drug coverage. High drug costs, and what to do about them, came up at forums around the city. I occasionally asked seniors and their advocates this question: “Suppose the research scientist who cured cancer or Alzheimer’s became a wealthy person. Does anyone have a problem with that?” No one ever did.

Yet some people who supported financial rewards for the individual who develops a remedy, want that person’s employer restrained or even punished. Imagine the world today if the minds that developed Cipro, Viagra, or Vioxx decided the incentives were too paltry for them to bother embarking on the typical 14-year, $800 million odyssey to steer a new drug around multiple regulatory roadblocks on to America’s consumer market.

Prescription drug costs remain a legitimate and ongoing concern for millions of seniors. But is there a better way to solve these problems than asking: “Is there a lawyer in the house?” My experience suggests that there is, and that the following four principles should guide policymakers:

1. Immediate, targeted assistance for senior citizens lacking prescription drug coverage.

Until prescription drug coverage is incorporated into Medicare, state governments and pharmaceutical companies can help address this issue.

If state governments cannot provide a widely available drug benefit, they should assist the neediest seniors—those least able to pay for prescriptions, and those with the gravest conditions. Pharmacists and their employees, religious institutions, senior citizen programs, and other organizations can help states identify these “at-risk” elders.

Pharmaceutical companies, which have received little media attention for their own “drug cards” and prescription savings plans, might assist state governments so that public and private efforts dovetail to enhance rather than duplicate coverage. (See “Stop Demonizing the Good Guys,” Health Care News, November 2001.]

2. Continued pharmaceutical innovation.

No one benefits more from the development of new medicines than senior citizens. Older Americans have a particular interest in seeing the U.S. maintain the pace of biomedical innovation. This requires preserving incentives, including solid patent protection for drug companies that develop new medicines, and an avoidance of the kind of price controls that have done serious harm to Europe’s once-healthy drug sector.

3. Faster regulatory approvals.

In recent years, the Food and Drug Administration (FDA) has significantly slowed its approvals of new medicines. That means patients are waiting for treatments that could save their lives, or greatly improve their quality of life. Congress can help accelerate the approval process by reauthorizing the Prescription Drug User Fee Act, which allows FDA to collect user fees from pharmaceutical companies seeking new drug approvals.

4. The First Amendment should apply to drug companies, too.

Patients should have access to abundant information on both brand-name and generic medicines. “Direct to Consumer (DTC)” advertising by brand-name companies should be as lawful in a free society as advertising by generic companies or advocacy groups.

According to the Kaiser Foundation, one in three adults has talked to a doctor in response to a drug ad. DTC advertising helps patients to actively participate in their own health care, increasing the likelihood they will take prescribed medicines correctly.

Elderly Americans are fortunate to live in a nation that leads the world in developing life-saving and longevity-enhancing drugs. AARP and its partners in litigation should find a more constructive way to help seniors than this misguided quest to punish the companies that are producing today’s—and tomorrow’s—cures. Keeping the drug companies focused on the laboratory, not the courtroom, is the right way to go.

Herbert W. Stupp was commissioner of the New York City Department for the Aging from 1994 to 2002, serving in the cabinet of Mayor Rudy Giuliani. This article was first published on July 9, 2002 by National Review Online.