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Blurry Copies

Via Tyler Cowen at Marginal Revolution, I came across this editorial by John Gapper in the Financial Times on me-too drugs. Its points will be familiar to readers of this blog:
“If there is one product that annoys people, it is the me-too drug. Pharmaceuticals companies should take advantage of the genetics revolution to find cures for intractable diseases such as cancer and cystic fibrosis, the critics moan. Instead, they spend billions trying to match the pills already made by others.”
Ay-yep, that they do, and that we do, too. But this piece goes a bit further than usual, pointing out to Financial Times readers that:
“. . .drugs can make it through clinical trials only for side-effects to be discovered when they are prescribed to millions of patients. If all drugs in each therapeutic class were identical, Celebrex would now be off the market along with Vioxx. In fact, one pill can turn out to be safer than another. Indeed, without going into details about Levitra and Viagra, their effects can also vary. . .”
The author goes on to point how how head-to-head trials of drugs are becoming more common, and how in the post-Vioxx world they’re likely be even more widely conducted:
“From the perspective of drugs companies, this makes life trickier. Not only is the least safe drug in any class liable to be knocked out in the same way as Vioxx, but even safe ones will have to face off against each other to establish the best of all.
This may all sound terribly wasteful to a doctor, but it is the same thing that is good for consumers in other markets: open competition. The problem until now has not been too much of it, but too little. The last thing that a patient should want is a choice of only one drug. As the Vioxx withdrawal shows, me-too pills may inspire little affection, but they would be missed if they were not there.”

Reading this, Tyler wonders:
“Why have me-too drugs been so prevalent? Are they an inefficient form of product mimicry? An artifact of bad patent or FDA policies? The long-run path to affordable medical care?”
I’ve talked about this before (see the category over on the right), but here’s the short answer: that the first drug in a category proves that the mechanism is a viable one in the market. ACE inhibitors really do lower blood pressure, HMG CoA reductase inhibitors really do lower cholesterol, and so on, and to a degree that people are willing to pay for. That’s a big hurdle, one that not every new first-in-class drug makes it over. There are numerous new-mechanism drugs that few people have heard of, because they didn’t work well enough to attract a market. No me-toos follow them.
But when something takes off, later drugs in the category are attracted by the proven mechanism and sales potential. Then they try to go a bit better, to take market share – more convenient dosing, better efficacy, fewer side effects – whatever we can come up with. There are also situations like Vioxx and Celebrex, where the two drugs were developed at roughly the same time. In those cases, we don’t know much about your competition while the development is going on. We just have to try to get to the market first and hope for the best.
So there’s some product mimicry, but real mimicry is impossible. No two drugs are, or even can be, completely identical. That gives new ones a shot at being better, or at just being better in some situations, or, likewise, a shot at being worse in some (or all) of them, too. But not the same.

One comment on “Blurry Copies”

  1. John Thacker says:

    You would think that people that accuse drug companies of predatory pricing would also understand that competing similar drugs undercut monopoly pricing, in addition to each drug having slightly different effects, and even different drugs being better for specific people.

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