Cost of Overriding Patent Drug Property Rights (Cipro)
November 30, 2001
In the wake of the anthrax scare, U.S. politicians pounced on the patent property rights of the German pharmaceutical firm Bayer, maker of the antibiotic Cipro.
Ironically, Cipro's most important use is not to treat so-called "inhalation anthrax," for which there are alternatives (doxycycline is one), but to treat bacterial infections resistant to older antibiotics.
Thus, widespread prophylactic use of Cipro could lead to new strains of antibiotic resistant organisms -- so many more people could die from panicky overuse than from anthrax.
Maybe politicians and media elites don't think their lives are worth $50 -- the cost of treatment with Cipro-- which U.S. Senate Democrats denounced as too high.
- The nondiscounted retail cost of Cipro in the U.S. is about $5 a pill -- and doctors recommend taking two pills for five days, followed by other antibiotics.
- The federal government had already obtained millions of doses of Cipro at a discounted price of $1.77 per pill for the National Pharmaceutical Stockpile.
- By comparison, the government controlled price in Canada is approximately U.S. $1.30 per pill, while the United Kingdom's National Health Service charges about $2 per pill.
- But shortly after U.S. Health Secretary Tommy Thompson testified (October 23) that he might invoke a U.S. law allowing him to abridge Bayer's patent, the company offered one hundred million pills at a price of $0.95 per pill, with an option to supply two hundred million more at $0.85-$0.75 per pill.
Thus the U.S. got a 50 percent discount on a drug that took many years and hundreds of millions of dollars to develop.
Another consequence is that developing countries, which the World Trade Organization is attempting to have honor intellectual property rights, can point to Cipro as a precedent and another instance of Western hypocrisy.
Source: John E. Calfee, "Bioterrorism and Pharmaceuticals: The Influence of Secretary Thompson's Cipro Negotiations," Draft, November 1, 2001, American Enterprise Institute; Thomas Sowell, "Drugs and Politics," November 23, 2001, Townhall.com.
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