Keeping drug prices high

Drug prices in the United States are higher, often far higher, than those in any other country on earth. Part of the reason is that, unlike most countries, we do not regulate drug prices. One reason we don't is that we don't want to squelch research by the drug companies. Yet, companies spend roughly one-third of their revenues on marketing and only half as much on research and development. Drug research funding has been declining for more than a decade.

The purpose of drug research here is to get a patent on the drug. But companies now get more than one patent on a drug; they get secondary patents to thicken the protection around their original patent. These additional patents rarely represent anything new in terms of science. Instead, their purpose is to prolong a company’s monopoly and, along with that, its ability to charge high prices for its drugs. Some drugs have dozens of secondary patents. Abbott Labs, for example, has over 108 patents on its HIV drug Kaletra. In many cases both the base and secondary patents for the drug are based on old science and commonly known techniques.