Ethics Consult: Wrong to Offer Cheap, Pirated Version of Drug? MD/JD Weighs In

Ethics Consult: Wrong to Offer Cheap, Pirated Version of Drug? MD/JD Weighs In

July 15, 2022 0 By Jennifer Walker

Welcome to Ethics Consult — an opportunity to discuss, debate (respectfully), and learn together. We select an ethical dilemma from a true, but anonymized, patient care case, and then we provide an expert’s commentary.

Last week, you voted on whether it’s wrong for a pharmaceutical manufacturer to offer a cheap, pirated version of a drug.

Is this pill manufacturer doing anything wrong?

Yes: 48%

No: 52%

And now, bioethicist Jacob M. Appel, MD, JD, weighs in.

Intellectual property laws are designed to create incentives for innovation. Patents for pharmaceuticals in the U.S. generally last for 20 years, giving manufacturers the exclusive right to profit from their research investment in new drugs. After that, other companies are permitted to market generic versions of a drug, but generics also require receiving regulatory approval from the FDA — a costly and time-consuming endeavor.

Notorious pharmaceutical entrepreneur Martin Shkreli exploited this process in 2015 when his company bought the rights to an off-patent medication for the treatment of toxoplasmosis — pyrimethamine (Daraprim) — for which no generic version was yet available, and raised the price by over 5,000%. (Shkreli was later convicted of securities fraud on a different matter and sentenced to 7 years in federal prison.)

The 20-year monopolies themselves can also render some novel drugs extremely expensive. Genentech’s anticancer agent Avastin (bevacizumab) initially cost patients up to $100,000 annually, although the price has since fallen to $24,000. Gilead’s hepatitis treatment Harvoni (ledipasvir/sofosbuvir) costs $94,500 for a 12-week course.

Needless to say, these medications are well out of reach for many U.S. healthcare consumers in the U.S., not to mention most patients in the developing world. Even less expensive treatments are unaffordable to indigent populations in Asia, Africa, and Latin America. To address these concerns, several developing nations have shaped their intellectual property laws in ways so that local manufacturers can produce these same medications at much lower costs.

Until 2005, several nations — most notably India — permitted local companies like Mumbai-based Cipla to engage in the reverse engineering of pharmaceuticals. Under Indian law, patents were granted for processes, rather than products. Finding an alternative route to the same drug enabled local manufacturers to flood the market with low-priced “knockoffs.”

Critics derided these manufacturers as “pirates,” accusing them of stealing profits from the rightful owners. Defenders, including many healthcare NGOs, countered that the individuals who purchased these “knockoffs” would not have bought the drugs at the higher prices anyway.

Eventually, to comply with the international Agreement on Trade-Related Aspects of Intellectual Property Rights, better known as TRIPS, India prohibited this practice. However, India continues to find ways to circumvent Western patient protections to make and export generic drugs at low cost.

One method used by India’s government is compulsory licensing, a process permitted by TRIPS that allows nations to grant companies the right to produce products already under patent, in certain circumstances, if the patent holders are appropriately compensated. Under Indian law, “compulsory license shall be available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems.” The first such license in India was granted for Bayer’s kidney cancer drug Nexavar (sorafenib) in 2012.

An ideal patent system would permit precisely the amount of protection needed to ensure the balance between research and access that would save the most lives. Finding that theoretical balancing point might prove impossible in a perfect world — and is certainly unlikely to occur in the political context of conflict between large pharmaceutical companies and the health ministries of powerful developing nations.

For many years, this conflict has played out largely on the international stage; as increasingly expensive drugs have come to market in the U.S., this is becoming a domestic political issue as well. New hepatitis C drugs cost Medicare $4.5 billion in 2014 — more than 15 times the amount it spent on older, interferon-based drugs in 2013.

Many bioethicists and healthcare policy makers are now asking which patients should be entitled to drugs like Harvoni and its sister drug, Sovaldi (sofosbuvir), while others are asking whether the government should intervene directly to reduce the costs.

Jacob M. Appel, MD, JD, is director of ethics education in psychiatry and a member of the institutional review board at the Icahn School of Medicine at Mount Sinai in New York City. He holds an MD from Columbia University, a JD from Harvard Law School, and a bioethics MA from Albany Medical College.

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Cut Health Insurance for Risky Activities?

Stop Life Support for a Tax Break?

Prescribe Pills Off-Label for Pilot’s Peak Performance?