WashU Expert: Incentivizing new uses for off-patent drugs

Generic medications could be an effective way to improve health outcomes while lowering costs, but the existing drug patent system is poorly designed to motivate such discoveries, says an expert on health law at Washington University in St. Louis.

“Additional testing and approvals are common for expensive on-patent drugs, but we don’t often seek out new uses for less expensive generic drugs, since it can be more difficult to profit from the research,” said Rachel Sachs, associate professor of law.

Rachel Sachs

Sachs is co-author of the piece “Encouraging New Uses for Old Drugs,” published Dec. 4 in the Viewpoint section of the Journal of the American Medical Association. Co-authors are Paul Ginsburg and Dana Goldman of the Schaeffer Center at University of Southern California.

“When drugs are patent protected, companies have incentives to conduct clinical trials and validate their products for both core indications and additional uses,” the trio writes. “If the drug proves safe and effective for the new use, the patent holder can recoup the costs of the additional trials by marketing the drug at a monopoly price.

“However, after generic products for the original indication enter the market, prescriptions for the new indication can be filled with a generic product, dampening incentives for innovator companies to study those new indications, in what has been referred to as the ‘problem of new uses.’”

While additional drug trials carry risks, such risks are usually lower for many generic products, they write. Generics often have better established safety profiles as well.

The authors acknowledge that, in an era of high drug prices, it is difficult for insurers to be willing to pay more for drugs that are already available as generic products.

However, there a few potential solutions.

“To encourage more discovery of these new uses, approaches outside the patent system, such as public funding of research, prizes for discovery, and leveraging existing data, could represent more effective potential solutions,” the authors write.

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