The FDA has been worried about the flood of generic drugs, which are cheaper, of the highly popular pain killer OxyContin. On the other hand the consumers are worried that they are being denied a valuable drug at more affordable price. Law enforcement agencies and legislatures are worried about the possible fallout as the drug is highly addictive. So, as the patent for the original OxyContin was about to expire, the FDA declined from extending the license to generic drug manufacturers. Subsequently, Purdue, the manufacturer brought out a reformulated version in 2010. This version is difficult to crush, and therefore, making it harder to abuse. This also brings in better prospects for Grunenthal Group, which manufactures tamper-resistant pain products, and supplies Purdue . At the same time it brings in bad news for generic manufacturers like Impax Laboratories and Mallinckrodt, which is a generic division of Covidient.
In a very similar example, Merck faced a different kind of dilemma. Merck typically spends a large amount of money, which it then recovers in course of next 12 years or so. However, there are no incentives for companies for developing drugs for diseases that are common in third world countries. Expanding on it further, the disease Onchocerciasis was found to be spread by black flies. The two drugs that were known to cure it at that time, were effective in killing the parasite, but were found to have significant side effects. Also, WHO’s Onchocerciasis Control Program, which entailed spraying larvicides on breeding grounds, was not found to be successful. The US government passed legislation to provide incentives to companies that developed drugs for diseases that affected less than 200,000 Americans. There were no such incentives for diseases that affected people in the third world countries. Routinely, it takes a pharmaceutical company an average of 12 years and $200 million to develop a new drug. As the cost of development is high, the product will be out of reach of most people in the third world countries. In context of Merck, this creates disincentives for them to commit their current resources towards such a project. In the 70s, while researching the soil samples, they discovered a naturally occurring antiparasitic that had profound effect on horses and other animals. The compound that was found responsible was called Ivermectin. It was also found to be active against a similar parasite, which was responsible for Ochocerciasis or River Blindness.
Like all pharmaceutical companies, both Purdue and Merck had ethical policies and considered themselves to be socially aware. In fact, George Merck, its former chairman said,” We try never to forget that medicine is for the people. It is not for profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.” It is also know that the researcher at Merck also think along the same lines.
I would now like to go into greater details about the dilemma faced by both these companies. For Purdue, like any other private enterprise, the objective is to maximize the value for their shareholders. This is besides their main job function of producing new drugs. The desire to maximize their shareholder’s value and the noble cause of producing new drugs for masses brings them into a unique conflict. Purdue was faced with dilemma that its license for the very potent painkiller, OxyContin, was expiring soon. At the same time generic drug manufacturers were getting ready to enter the market. At the same time FDA was under pressure to make a requirement that the generic drug manufacturers incorporate some sort of tamper resistance in their formulations. The need for the tamper resistance was because the opioid drug had potential for abuse and it is such use became epidemic across the United States. To extend it monopoly over the drug, the company reformulated it. This new formulation made it rather difficult to abuse. It feared that once the patient for the original formulation expired, it might be picked up by the generic manufacturers. The generic manufacturers can reformulate the original drug or make it tamper proof to avoid abuse, and still sell it for less than the new reformulated Purdue drug. To overcome the threat, Purdue applied for extension with FDA and was granted. This would imply that the generic copies cannot be made. On top that Purdue had patent right on the reformulated drug till 2025. The reformulated drug won’t be inexpensive till that time. This practice of reformulation of old drug is called “evergreening” and it is quite a controversial practice. Coming to the moral aspect of this incident, it is understandable that Purdue would want to maximize its profits. What matters most is how the company does it? It is not clear from the article, but it is quite possible that they tried to influence FDA into extending their license? If so, it is highly controversial as to why FDA caved in to their demands.
Elaborating each of the above points into greater details; it seems there is a lot of information that is not quite in public domain. It is alright if Purdue desires to extend the license and approaches FDA in that regards. But it will be an altogether a different story if they tried to influence FDA in any way. Also, it will be considered fair if FDA gave them approval based on their own thought process. But, if FDA got influenced in any way to extend the license, that it should be considered as unfair. Even besides that the practice of “evergreening” of drugs is unfair means of extending the license. This prevents generic drug companies from obtaining the license and consequently, pushing the cost down.
The case of Merck is in sharp contrast to that of Purdue. Building further on what they with regards to, their researcher thought whether ivermectin could be put to benefit of humans. They also realized that they will have to spend substantial amount of money on it development. And in addition, they will have to do field trials away from United States, which will be an expensive proposition. The had to face many issues before they could decide which way to go: if the drug is developed for River Blindness, which is prevalent in third world countries, it will be expensive for the locals; if the human form of drug has side effects, it might the reputation of animal form of drug, which is successful; what if the human version of the drug is sold in black market for animal use; and what about their resolve to alleviating suffering? So, if they do decide to develop the drug, it is pretty much certain that they will not be able to recover the cost. So, any decision with that regards will have to be taken that into account. The choice is between: not developing at all; developing and then unable to sell as they are expensive for those who need; and developing and selling at reduced price, or even distributing for free.
As is evident, Merck decided to go in the direction of developing human form of the drug. In fact, it went above and beyond the production, and decided that it will distribute for free to countries upon request . This altruistic decision was taken as the disease afflicts around 18 million people in Central and West Africa, South and Central America, and the Middle East. There may be many more that are infected, and they can be spread across more than 30 countries. Take the case of Burkina Faso, where most of the field trials were done, it has had a wide ranging social impact. The eradication of the disease has resulted in villages being repopulated. Merck went on to the extent of developing the drug and making available for free realizing that those who require the most are simply unable to pay.
As a great exercise in Corporate Social Responsibility, they went on to develop an extensive program in partnership with WHO, UNICEF, World Bank, Mectizan Expert Committee, ministries of health of concerned countries, international donor community, non-governmental organizations and local community health workers . What came to be known as the Merck Mectizan Donation Program (MDP), was one of the largest donation program of its type. The program had a treatment programs in 33 of 35 sub-Sahara African, Latin American, Yemen and Middle Eastern countries. It is estimated that almost 25 million patients were treated annually.
The approach of both these companies cannot be more contrasting. Purdue supposedly tried to influence FDA to block the generic companies from entering the market. On the other hand, Merck created a world-wide movement of sort through its altruistic efforts. Through its CSR effort, it has reached the hearts and minds of the people of concerned countries. Talking in terms of profitability, the trust gained will help them reap benefits in the long run.
Bibliography
New York Times . Merck Offers Free Distribution of New River Blindness Drug. 22 10 1978. 12 12 2013 <http://www.nytimes.com/1987/10/22/world/merck-offers-free-distribution-of-new-river-blindness-drug.html>.
Palmer, Eric. FDA halts generic OxyContin, handing Purdue a victory. 16 04 2013. 11 12 2013 <http://www.fiercepharma.com/story/fda-puts-halt-generic-oxycontin/2013-04-16>.
Sturchio, Jeffrey L. "The Case of Ivermectin: Lessons and Implications for Improving Access to Care and Treatment in Developing Countries." Community Eye Health (2001): 22 - 23.
