Robin Feldman - Drug Wars: How Big Pharma Raises Prices and Keeps Generics Off the Market

While the shockingly high prices of prescription drugs continue to dominate the news, the strategies used by pharmaceutical companies to prevent generic competition are poorly understood, even by the lawmakers responsible for regulating them. In this groundbreaking work, Robin Feldman and Evan Frondorf illuminate the inner workings of the pharmaceutical market and show how drug companies twist health policy to achieve goals contrary to the public interest. In highly engaging prose, they offer specific examples of how generic competition has been stifled for years, with costs climbing into the billions and everyday consumers paying the price. Drug Wars is a guide to the current landscape, a road map for reform, and a warning of whats to come. It should be read by policy makers, academics, patients, and anyone else concerned with the soaring costs of prescription drugs.

Robin Feldman is an award-winning teacher and scholar who has published more than forty articles and books. Feldman has been cited by the White House, members of Congress, and numerous federal agencies, and she has testified before committees of the U.S. House and Senate, as well as the California legislature. In 2016, Feldman was named one of the Women Leaders in Law & Technology, the only academic to receive the honor.

Evan Frondorfs legal work with Professor Feldman has been published in journals at Harvard and Stanford, including papers on patent demands and generic pharmaceuticals. He studied economics at Yale and graduated Phi Beta Kappa and magna cum laude, and he was named a Rhodes Scholar finalist in 2015. He is also the current sports-writer for the Yale Alumni Magazine. At Yale, he was heavily involved in sports broadcasting and served as a deputy sports editor at the Yale Daily News.

HOW BIG PHARMA RAISES PRICES AND KEEPS GENERICS OFF The Market

ROBIN FELDMAN

University of California Hastings College of the Law

EVAN FRONDORF

University of California Hastings College of the Law gg| Cambridge

UNIVERSITY PRESS

UNIVERSITY PRESS

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Information on this title: www.cambridge.org/978n07168480 DOI: 10.1017/9781316717424

Robin Feldman and Evan Frondorf 2017

This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press.

First published 2017

Printed in the United States of America by Sheridan Books, Inc.

A catalogue record for this publication is available from the British Library.

Library of Congress Cataloging-in-Publication Data Names: Feldman, Robin, author. | Frondorf, Evan, author.

Title: Drug wars: how big pharma raises prices and keeps generics off the market / Robin Feldman, Evan Frondorf.

Description: New York, NY: Cambridge University Press, 2017. |

Includes bibliographical references and index.

Identifiers: LCCN 2017004139 | ISBN 9781107168480 (hardback)

Subjects: | MESH: Drug Costs | Drugs, Generic - supply & distribution |

Patents as Topic | Drug Industry - economics | Drug Industry - legislation & jurisprudence | Economic Competition - legislation & jurisprudence | United States Classification: LCC RA401.A3 | NLM QV 736 AA1 | DDC 338.4/76151-dc23 LC record available at https://lccn.loc.gov/2017004139

ISBN 978-1-107-16848-0 Hardback

Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party Internet Web sites referred to in this publication and does not guarantee that any content on such Web sites is, or will remain, accurate or appropriate.

This book is dedicated to my husband, Boris Feldman, in our thirtieth year of marriage, and to our children, Natalie, Talya, Eli, Sam, and Adam. - Robin

To my supportive family and friends, wherever I go. - Evan

List of Table and Figures page

4 Generation 3.0: Continued Obstruction of Regulatory Pathways

TABLE

page

5.1 All Delay-Related Petitions, by Year

FIGURES

Portions of this book are based on two articles and are included here with the permission of both journals. Those articles are Robin Feldman & Evan Frondorf, Drug Wars: A New Generation of Generic Pharmaceutical Delay, 53 Harv. J. on Legis. 499 (2016), reprinted with the permission of the Trustees of Harvard University, and Robin Feldman, Evan Frondorf, Andrew K. Cordova, & Connie Wang, Empirical Evidence of Drug Pricing Games - A Citizens Pathway Gone Astray, (forthcoming 2017 in the Stanford Technology Law Review) reprinted with the permission of Stanford Technology Law Review.

We wish to express our thanks to Drew Amerson, Alice Armitage, Matt Avery, Michael Carrier, Scott Hemphill, Cheryl Johnson, Kurt Karst, Mark Lemley, Joe Lukens, and Daryl Wander for their comments, suggestions, and clarifications. We are grateful beyond measure to Grace Bradshaw, Jonathan Cohen, Isil Selen Denemec, Gabriella Gallego, John Gray, Arya Moshiri, Betty Chang Rowe, Naira Simmons, Omar Vaquero, and Connie Wang for their insights and research, and, above all, to Andrew Cordova for research design and coordination of the research. Rosie Buchanan was instrumental in guiding us through the coding process for our empirical work, and John Grays data insights were critical to the analysis. Nanette McGuinness provided incomparable proofreading, and Sarah K. Delson created the fabulous cover design. While the book was in process, Evan Frondorf completed his position at the University of California Hastings College of the Law, began a full-time position at Stripe, and thus, had to bow out of the final stages of the book production. His contributions to the book were immeasurable.

In accordance with the protocols outlined in the Harvard Journal of Law & Technology Open Letter on Ethical Norms, all of the data is publicly available

1 Robin Feldman, Mark A. Lemley, Jonathan, S. Masur, Arti K. Rai, Open Letter on Ethical Norms in Intellectual Property Scholarship, 29 Harvard J.L. & Tech. 339 (2016) (signed by dozens of professors).

for future use by other academics on SSRN.com. In further accord with the Open Letter, donation information for the University of California Hastings Institute for Innovation Law, which Robin Feldman directs, can be found at http://innovation .uchastings.edu/about/funding/funding-for-academic-year-2015-2016/. No private or corporate donor accounts for more than 10 percent of the institutes budget.

A PHARMA UNDER FIRE

Eac Deal making generally takes place behind closed hotel room doors at the glamorous Westin St. Francis in the heart of San Franciscos Financial District, but crowds still turn out for investor presentations and occasionally heated Q&As asking, "What drugs are in the pipeline? or "How are clinical trials coming along?

In January 2016, the mood was far less rosy. Statistical indicators of unease were certainly present. The number of initial public offerings (IPOs) had

1 Sasha Damouni, Doni Bloomfield, & Caroline Chen, At Biotech Party, Gender Diversity Means Cocktail Waitresses, Bloomberg (Jan. 13, 2016), www.bloomberg.com/news/articles/2016-01-13/at-biotech-party-gender-diversity-means-cocktail-waitresses.

2 NASDAQ Biotechnology Index, Google Finance, www.google.com/finance?q=INDEXNASDAQ %3ANBI&ei=TQHCV5CVE82N2Aa0pojYCw (click "Historical prices and view prices from July 2015 to January 2016). The index peaked at an all-time high, 4,165.87, on July 20, 2015, before falling to 3,052.56 on January 11, 2016, the day the conference opened. That fall is equivalent to a 26.7% drop.