For any given medical ailment, there are often several different medications available to a patient, from brand name drugs to generic ones. Generic drugs are the Meijer brand of the medical world just as good as the more expensive version, but without the fancy label. Many state legislatures have, in an attempt to cut medical insurance costs without decreasing benefits, been creating “preferred drug” lists. A panel of doctors creates the list of preferred drugs, selecting what it considers to be the “best” drugs in the class. Other drugs can be added to the list as long as they are sold at a price lower than the cheapest “best” drug. Under such legislation, physicians can only prescribe drugs from the list, having to get special permission to prescribe drugs not on the list.
Michigan was working toward the implementation of just such a program when it was sued on Nov. 30 by Pharmaceutical Research and Manufacturers of America, a pharmaceutical trade group. On Monday, Ingham County Circuit Court Judge Lawrence M. Glazer issued an injunction against the “preferred drug” lists. His action, along with the lawsuit levied by PhRMA, is a clear indication that the battle for patients” rights is far from being won.
The terms of the health care debate are at issue here. Too often, health care issues are unfortunately mired in competing concerns between patients” rights and the rights of insurance companies or pharmaceutical companies. This debate is fundamentally flawed, since it assumes that the purpose of health care is to benefit corporate entities.
Brand-name pharmaceutical companies already benefit enormously from the health care industry due to the patent protection system that has been set into place. Brand name pharmaceutical companies, upon the discovery of a new drug, get to hold exclusive, monopoly rights over the drug for several years. Through the patent protection system, pharmaceutical companies earn the profits necessary to continue to research new therapeutic agents. They are, in fact, forced to continue researching because, after the patent expires, the company can no longer make monopoly profits in a newly competitive industry.
Or so the logic would go, if it weren”t for the fact that brand name pharmaceutical companies manage to continue charging artificially high prices even after generic drugs enter the market. By forcing brand name pharmaceutical companies to act competitively after their patents expire, the state will be protecting the consumers of the health care industry the patients.
An added benefit of forcing competition onto brand name pharmaceutical companies would be the greater push toward medical research. If pharmaceutical companies know that they cannot bank on uncompetitive profits after their patents expire, they will be forced to step up the pace of research in order to maintain their corporate profits.
All in all, forcing competition benefits the patient thus strengthening the purpose of the health care industry.