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>The length of a drug patent is 20 years, 8 of which by your statement are spent in development. So yes, almost half the patent duration is spent with the drug off the market. This is burden almost no other industry has to deal with. My original statement is completely valid.
And yet they seem to be doing just fine, check that stock price chart above. Part of this is because 12 years is already pretty long, they're obviously making their money back. Also, there are all sorts of strategies these companies use in order to avoid true patent expiration.
>The problem is, these modified drugs don’t offer enough of an advantage over generic versions of the original molecules, says Jim Keon, president of the Canadian Generic Pharmaceutical Association. So the sophisticated lifecycle plans brand-name companies have for their products — rolling out new versions when patents near expiry — are created primarily to help bottom lines rather than patients. And the argument that this is necessary to earn enough money to reinvest in new R&D doesn’t hold much weight, suggests Keon, if that research only results in more “me-too” drugs. “They have to recoup R&D costs, yes, but the question is: Is it useful R&D? If the R&D is just to tweak a product to get more monopoly protection without really providing an improved medication, then maybe it doesn’t deserve a patent,” says Keon.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3680578/
>Nexium illustrates the drug makers’ strategy. Many chemicals come in two versions, each a mirror image of the other: an L-isomer and an R-isomer. (The “L” is for left, the “R” is for right.) Nexium’s predecessor Prilosec is a mixture of both isomers. When Prilosec’s patent expired in 2001, the drug maker was ready with Nexium, which contains only the L-isomer.
http://sm.stanford.edu/archive/stanmed/2005summer/drugs-meto...
>AstraZeneca somehow managed to convince the US Patent Office that Nexium was substantially different from Prilosec, and thus should be granted its own patent, along with 20 years of protection
http://acsh.org/news/2017/01/18/nexium-dark-side-pharma-1054...
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>Also, if I'm interpreting this correctly, nothing you posted suggests that the government is the primary backer of pharmaceutical research. We can argue over whether the research costs are 50 billion or 30 billion or whatever, but your original claim is still incorrect unless the numbers are off by literally an order of magnitude.
I admitted that was a tad misleading, here's the fact I was thinking of. I should have linked it earlier.
>An internal National Institutes of Health (NIH) document, obtained by Public Citizen through the Freedom of Information Act, shows how crucial taxpayer-funded research is to top-selling drugs. According to the NIH, taxpayer-funded scientists conducted 55 percent of the research projects that led to the discovery and development of the top five selling drugs in 1995. (See Section III)
http://www.citizen.org/publications/publicationredirect.cfm?...
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>Other countries place more stringent price ceilings on the cost of pharmaceuticals, which is why there is such a disparity between what we are paying and what others are paying. If we want to spread the cost burden geographically, countries benefiting from these products should be pressured to remove their price ceilings, which would lower costs in the US. Opening up the markets to other countries is just regulatory arbitrage, not spreading of cost burden.
I'm fine with the US or US industry "exerting pressure" on other countries to remove pharmaceutical price ceilings as long as we allow our citizens to buy overseas drugs first. Otherwise I don't see why Americans should suffer like this. American citizens alone bear the cost of R&D for the world because every other country sets price ceilings? Also, I'll just once again point out that our drug development industry is not struggling! It's doing great right now, they spend lots of money on dividends and stock buybacks and advertising and still make fantastic profits. They're fine.