Unbiased Analysis of Today's Healthcare Issues

Patents, Regulation, and Fake Drugs

Written By: Jason Shafrin - Sep• 13•10

The Economist notes that counterfeit drugs are a growing problem.

Counterfeit drugs can kill. Many are shoddily made, containing the wrong dose of the active ingredient. Taking them instead of the real thing can turn a treatable disease into a fatal one. It can also foster drug resistance among germs.

Do patents cause and increase or decrease in the provision of unsafe, fake drugs?  Most people will say that patents help protect drug safety.  Drugs sold under patent require FDA approval and are generally safe.  However, these drugs are expensive and many people–especially those without insurance–cannot afford them.  Thus, these individuals may turn to less reliable vendors who promise to provide the same drugs at a lower price.

With shorter patent lengths, reliable companies can begin to produce affordable generics.  Companies can build a reputation for high quality generics, while still selling customers through low prices.  Eventually, these “generic” companies could build a brand name as worthwhile as Pfizer.

Just decreasing patent lengths is not a cure all, however.  People have been selling, drugs, tonics and potions which falsely purport to cure all types of ailments since the beginning of mankind (e.g., snake oil salesmen).

Additional drug safety regulation could improve the safety of marketed drugs, but it would also likely drive up prices, thus forcing more individuals to buy medicines on the black market.  Additional regulation also stymies new treatment innovation due to the extra costs regulation imposes.

Fake drugs are a serious problem; a problem without a simple answer.

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