Pricing power?

As the opioid crisis rages on, police officers in many areas have one more weapon: New laws permit them to give the rescue drug Narcan (naloxone) to overdose victims without waiting for paramedics. It works, and it saves lives—Leana Wen, the health commissioner of Baltimore City, credits the drug with saving 14,000 people since 2015 in her city alone. But that success comes at a cost, and Wen goes on to state in a Washington Post op-ed that her city is now rationing the drug.

Naloxone’s patent protection expired decades ago, and the drug itself retails for perhaps $15 a vial—and often less for organizations that buy in bulk. But giving that vial to an overdose victim would require an injection, so rescuers without medical training normally receive nasal sprays or auto-injectors instead. Even with steep discounts for public providers, brand-name Narcan nasal spray costs $37.50 per use; the other ready-to-use naloxone, the Evzio auto-injector, costs them $180 each. Multiplying those numbers by thousands of prospective uses has led many departments to cobble together their own naloxone nasal sprays, using generic pre-filled syringes and atomizers.

Wen argues that the government should invoke its rarely used ability to bypass the patent system in exchange for “reasonable compensation” to patent holders, but at least generic forms of naloxone exist: Diabetics who need insulin and asthmatics who need albuterol inhalers have no generic choices in America, even though the patents for both original forms expired decades ago. Dr. Jeremy Greene, a professor at Johns Hopkins, cited a newer-is-better attitude in a 2015 Journal of the American Medical Association article as the main reason why older animal-derived insulin products are no longer available here. He added in an NPR interview that “we don’t believe that there is a conspiracy to keep insulin expensive.”

The situation is murkier for albuterol inhalers. Generic albuterol itself remains widely available at modest prices—but only in vials for nebulizers, whose size makes them unpopular as a rescue treatment. What happened to the iconic inhalers from years ago? They’re still around, but since the propellant has changed from CFCs, and since any new formulation is eligible for patent once more, generic albuterol inhalers disappeared from the American market in 2008.

New corporate and nonprofit market players hope to disrupt the status quo: A consortium of hospitals has teamed up with the VA to start a nonprofit generic-drug manufacturer, arguing in the New England Journal of Medicine that since older drugs often cost very little to manufacture, their nonprofit will be able to sustain itself while charging far below current prices for medicines. To help drugs reach the generic market, the Initiative for Medicines, Access, and Knowledge plans legal challenges to patents it considers questionable. The biggest news, however, is how those drugs will ultimately reach consumers: Amazon’s purchase of online pharmacy PillPack gives it a pharmacy license for all 50 states.

If this array of new market players brings back affordable generic insulin, it would bring the drug’s journey full circle. When surgeon Dr. Frederick Banting and medical student Charles Best first isolated insulin from animals in 1921, they sold their discovery to the University of Toronto, putting the wellbeing of diabetics above their own profit. The price they charged, for a discovery that would yield a Nobel Prize two years later: one dollar.