Drug manufacturing’s innovation problem

By Nicholson Price

There’s a lot of talk and research about the drug industry, including its levels of innovation, its pricing patterns, transparency of clinical trials, industry changes over time, and how the industry is and should be regulated.  But one thing that usually flies way under the radar is the question of actually making drugs – cranking out capsules, tablets, aerosols, gels, and liquids day after day. We tend to think that manufacturing can be taken for granted, that it’s high quality, cheap, easy, high-tech, and unproblematic.

In a new paper up on SSRN and forthcoming in BC Law Review next year, I argue that these widely-held assumptions are wrong.  Drug companies tend to spend about twice as much on manufacturing as they do on R&D, and a lot of that is unnecessary.  Essentially, the industry wastes tens of billions of dollars per year on inefficient manufacturing techniques which have stayed largely unchanged for decades.  Increasing drug shortages, higher drug prices, and higher levels of drug recalls are the unfortunate result.  Read More

Experiment vs. innovative treatment in bacterial transplants

By Nicholson Price

There’s a fascinating and tragic story coming to its conclusion at UC Davis, which points at the fine line between clinical innovation and experimental treatment.  Two neurosurgeons just resigned, following the resignation of the med school’s dean last year.  The neurosurgeons, going off anecdotal evidence that some patients with deadly glioblastomas lived significantly longer when they accidentally acquired post-surgery infections, had deliberately infected three patients with live Enterobacter aerogenes, a bowel bacterium, and withheld antibiotics.  All three patients died, two of untreated sepsis.  It seems quite clear that the doctors were trying to do their best to help the patients; but they also appear to have circumvented procedures and rules to do so.  The consent form was only 300 words, though it included language that “[t]here is no proof that such treatment (for brain cancer) might be beneficial, nor are there animal data to support it” and that resulting harms might include “paralysis, inability to speak or understand speech, inability to swallow, vegetative state, coma or death.”  The Sacramento Bee has an excellent series of articles here.

One does wonder: if it had worked, would the reaction have been the same, or would the surgeons have been hailed as innovators and heroes?  Read More

Henrietta Lacks and the HeLa genome

By Nicholson Price

A few days ago, NIH announced an agreement with the family of Henrietta Lacks.  When she was being treated for an aggressive tumor, cells were taken without her consent or knowledge and used to create the HeLa cell line, which is tremendously widespread in biomedical research today – the story is well-chronicled in Rebecca Skloot’s The Immortal Life of Henrietta Lacks. The announcement raises some interesting questions about precedent and keeping information partitioned once it’s been released. Read More

Importing unapproved drugs: lethal injections and shortages

By Nicholson Price

In a unanimous opinion (pdf) in Cook v. FDA, the DC Circuit just held that FDA must prohibit the importation of misbranded or unapproved new drugs, including those made by unapproved manufacturers abroad. In this case, a set of prisoners on death row sued FDA to require it to prohibit the importation of sodium thiopental, the first drug in the three-drug cocktail used in most states for lethal injection (and the only drug typically used in states with one-drug protocols).  Since 2009, no domestic company has made thiopental, and the foreign source used by most states is not registered with FDA, which makes it “misbranded” under 21 U.S.C. §§ 331(a), 352(o).  In 2011 FDA stated that it wouldn’t block importation of thiopental, using its enforcement discretion.  The DC Circuit rejected this approach, holding the statute compels FDA to inspect the drugs and prohibit their importation.  The opinion relates to both lethal injections and, less obviously, drug shortages – but though at first glance the implications look potentially significant, I have a hard time seeing how they’ll make much of a practical difference in either scenario. Read More

Employer mandate delayed for a year.

By Nicholson Price

The employer mandate has been delayed for a year, until 2015.  Under this provision of the Affordable Care Act, all employers with more than 50 employees are obliged to provide health insurance for their employees or pay “shared responsibility payments.”  According to a statement by Mark Mazur, Assistant Secretary for Tax Policy at Treasury, this year-long delay is in response to complaints by companies that the insurance reporting requirements under Section 6055 are complex and require more time to implement.   requirements, and connected reporting requirements, are complex and that companies need more time to implement them effectively.  Once that’s the case, it’s impractical to impose the cover-or-pay requirement.  This seems a bit substantively backward, but the overall effect is that both the reporting and insuring requirements are delayed.

The individual mandate, under which all individuals not otherwise insured must purchase coverage individually, is unaffected by this delay.  But the implementation of some subsidies in the exchanges is linked to employers’ decisions to offer coverage, and require accurate reporting, so exchange administration might get a bit more complicated, and will require some statutory and regulatory parsing.

It’s a bit surprising to think that even major areas like this still don’t even have proposed rules yet.  To be sure, had the Supreme Court’s decision on ACA’s constitutionality or the presidential elections come out differently, it’s likely that effort readying rules would have been wasted, but that understandable delay seems to be causing additional rollout problems now.

Reactions to Myriad, two weeks later

By Nicholson Price

Two weeks after the Supreme Court held isolated naturally occurring DNA unpatentable in Association for Molecular Pathology v. Myriad Genetics, Inc., there’s been quite a lot of commentary about the case’s implications for the biotech industry and medical science.  I’ll just mention a few here, with the certainty that there will be more to come.  On the practical side, Quest Diagnostics has already announced plans to offer testing for BRCA1 and BRCA2.

Paul Cole wrote about how Myriad lines up with international views on gene patenting, and concluded it doesn’t, at least not well – in the E.U. and Australia isolated DNA is patentable.  On the other hand, at least the Federal Court of Australia opinion (also against Myriad Genetics), the court relied in part on its conclusion that “in the absence of human intervention, naturally occurring nucleic acid does not exist outside the cell, and ‘isolated’ nucleic acid does not exist inside the cell. Isolated nucleic acid is the product of human intervention involving the extraction and purification of the nucleic acid found in the cell.”  The amicus brief filed by Dr. Eric Lander on behalf of neither party, and co-authored by Glenn Cohen here at the Petrie-Flom Center, points out the error of this conclusion, noting that there is a tremendous amount of isolated DNA present in the human body outside of cells.  Glenn posted extensively on this, and the importance of the brief in the Supreme Court’s reasoning, here.

Read More

Supreme Court deals a major blow to reverse-payment settlements.

By Nicholson Price

The Supreme Court keeps coming out with major opinions in the biotech/pharma area, with today seeing a major blow to reverse-payment settlements wherein brand-name pharma companies pay generic companies to delay their entry into the market.  This type of settlement shows the opposite pattern to that in most patent litigation, where the accused infringer (here, the generic drugmaker) usually pays the patent-holder, rather than the patent-holder paying the infringe, and is a result of the dynamics of generic drug market entry created by the Hatch-Waxman Act.  Since reverse-payment settlements result in the generic agreeing to stay out of the market in return for payment from the patent-holding brand name company, they look like antitrust violations – the question is whether the involvement of a patent (which creates a monopoly) means the settlements are acceptable under antitrust law.

Today, the Supreme Court came down on the side of protecting competition and sticking with traditional antitrust doctrines.  The Court didn’t go so far as to say that all reverse settlements are presumptive unlawful, instead requirings courts to apply a “rule of reason.”  But the Court firmly rejected the idea that a reverse payment settlement is immune from attack as long as it falls within the nominal scope of the patent.  The Court also noted that a large reverse settlement payment may itself provide evidence of a patent’s weakness, avoiding the need for a full determination of patent validity in the context of the antitrust action.  The opinion is here.

Prof. Einer Elhauge and Alex Krueger wrote about the economics of this question last year; their article can be found here.

Unapproved GMO wheat found in Oregon; Japan cancels US wheat imports.

By Nicholson Price

One fear about GMOs is that they will escape whatever controls are placed them and end up in the wild.  A version of that story appears to have come true in the wheat industry this week, when the USDA announced that farmers in Oregon had discovered an unexpected and unapproved patch of Roundup-Ready genetically modified wheat in a conventional wheat field.  Monsanto developed Roundup-Ready wheat (which is not resistant to its Roundup herbicide) and tested it between 1998 and 2005, but it was never approved for sale and was discontinued.  Japan has cancelled or suspended orders of wheat from the Pacific Northwest in response.

h/t to Grubstreet; see also recent posts on GMOs and the environment and on Monsanto’s patent protection of GMOs.

Monsanto v. Bowman: Patents on GMO Seeds

By Nicholson Price

Monsanto has been receiving quite a bit of press recently.  Marchers in over 400 cities protested the company and the GMOs it makes took place a few days ago, arguing that foods should be labeled if they contain GMOs.

More broadly relevant to the biotech industry and GMOs generally, a few weeks ago, the Supreme Court released its 9-0 opinion in Bowman v. Monsanto, No. 11-796.  This case shores up the patent-law foundation for the GMO seed business (as was widely expected), but also takes an interesting turn involving intent and self-replicating technology in general. Read More

Introducing New Blogger Nicholson Price

W. Nicholson Price II is an Academic Fellow at the Petrie-Flom Center for Health Law Policy, Biotechnology and Bioethics at Harvard Law School.  He holds a J.D. from Columbia Law School, a Ph.D. in Biological Sciences from Columbia University, and an A.B. from Harvard College.  After law school, he clerked for Judge Carlos T. Bea of the U.S. Court of Appeals for the Ninth Circuit and was a Visiting Consortium Scholar at the UCSF/UC Hastings Consortium on Law, Science and Health Policy.  His current research interests include innovation in pharmaceutical manufacturing, genetic testing, and personalized medicine.

Some of Nicholson’s recent publications include:

Does Whole-Genome Sequencing Circumvent Gene Patents?  Bio-IT World (December 10, 2012).

Unblocked Future: Why Gene Patents Won’t Hinder Whole-Genome Sequencing and Personalized Medicine. 33 Cardozo L. Rev. 1601 (2012).

Price, W.N. et al. Large-scale experimental studies show unexpected amino acid effects on protein expression and solubility in vivo in E. coli. 1 Microbial Informatics and Experimentation 6 (2011).

Neuner, L.K. & Price, W.N. The Deepwater Horizon Oil Spill: Potential Insurance Coverage Implications. Ins. Law Coverage Bulletin (Sep. 2010).

Am I My Son? Clones and the Modern Family. 11 Colum. Sci. Tech. L. Rev. 118 (2010). Winner, Julius Silver Notes Competition 2009.

Price, W.N. et al. Understanding the physical properties that control protein crystallization by analysis of large-scale experimental data. 27 Nat. Biotechnol. 51 (2009).

Patenting Race: The Problems of Ethnic Genetic Testing of Patents.
8 Colum. Sci. Tech. L. Rev. 119 (2007). Winner, Julius Silver Notes Competition 2006.