The Multinational Monitor


G L O B A L   N E W S W A T C H

Pharmaceutical Firms Seek Stronger Monopoly Position, Say Senators

Legislation to boost the pharmaceutical industry has just been approved by the U.S. Senate and is awaiting action in the House. The bill would extend the period of time patents are valid, or "patent life," by as much as seven years.

Pharmaceutical firms have pushed for this legislation, which was introduced by Senator Charles Mathias (R-Md) and Representative Robert Kastenmeier (D-Wis). Currently, the patent life for a drug is 17 years, less the number of years the U.S. Food and Drug Administration (FDA) takes to approve the drug. Testifying before the House Subcommittee on Health and Environment, the president of the 149-member Pharmaceutical Manufacturers Association, Lewis Engman, said, "Incentives to invest in pharmaceutical research and development have been substantially reduced," as a result of sometimes lengthy FDA approval proceedings.

Consumer group spokespersons argue that the pharmaceutical industry is extremely profitable and needs no additional incentive to conduct research. In testimony given this June before the House Subcommittee on Courts, Civil Liberties and Administration of Justice, Dr. John Andelin, the Assistant Director- of the U.S. Office of Technology Assessment (OTA), pointed out that revenues of drug firms have increased steadily since 1956, while the relationship between their research and development expenditures and revenue has remained steady.

The bill, if enacted, might curtail competition in the industry and result in rising drug prices, according to critics who argue that the longer the patent life, the less open the market is for competitive drugs. "It is almost inevitable that the bill will reduce competition in drugs and raise prices which are already astronomic," Senators Edward Kennedy (D-Mass) and Howard Metzenbaum (D-Ohio) said in a joint statement, noting that the bill would strengthen the monopoly position of inventors of new drugs. The Senators concluded that "in its present form, the bill is not in the public interest."

- Lisa Bescherer

Table of Contents