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FTC challenges 'junk' patents held by 10 drugmakers, incl Novo Nordisk's Ozempic (cnbc.com)
152 points by toomuchtodo 7 months ago | hide | past | favorite | 91 comments



Good.

They patented inhalers for a second time. It's the exact same drug. The only thing that changed was the propellant. It went from R-12 to R-134a. Everyone who had to switch out R-12 from refrigeration to drug manufacturing switched to R-134a. There was absolutely _nothing_ novel about it.

It was _criminal_ to allow them the second patent for just the propellant change. It took generic $5 inhalers off the market and replaced them with $95 inhalers. It was was one of the most corrupt swindles I've ever personally seen.


> It took generic $5 inhalers off the market and replaced them with $95 inhalers.

OOTL, what is stopping companies from making generics of the older version & patients just not using the new version?


It is illegal to use the previous propellant, so they can’t be manufactured anymore.


Where can I read more about this? If that’s true, it seems like a problem of over-regulation, not drug companies being exploitative.


https://en.wikipedia.org/wiki/Dichlorodifluoromethane

> In compliance with the Montreal Protocol, its manufacture was banned in developed countries (non-article 5 countries) in 1996, and in developing countries (Article 5 countries) in 2010 out of concerns about its damaging effect on the ozone layer.

Seems a reasonable regulation to me.


Not reasonable if it prevents the minuscule amounts required for inhalers.

A more nuanced regulation would limit the production volume if there are still valid use cases.


The sentence immediately after the quoted section provides additional nuance, reading as follows:

> Its only allowed usage is as a fire retardant in submarines and aircraft.

There is no reason to continue the use of R-12 in inhalers when R-134a is a drop-in replacement, though you're welcome to do your own research if you still disagree with the legislation.


> There is no reason to continue the use of R-12 in inhalers when R-134a is a drop-in replacement, though you're welcome to do your own research if you still disagree with the legislation.

I disagree with that statement. As mentioned above if it causes the drug companies to be able to re-patent the same drug again at 20x the price, then it’s not a drop-in replacement.

If this is a propellant used in life-saving medicine and this regulation increased the price then it’s a bad regulation, period. If there’s already an exception to be used as a fire retardant then medical applications can be included in there as well. The immeasurable output from an inhaler isn’t going to damage the ozone layer.

Over time you can migrate the production to the newer chemical and still achieve the same effect without hiking the price, since the drug companies won’t charge 20x the price if the cheaper generic still exists.

Politicians unfortunately do this all the time where they create a regulation without going through an analysis of tangentially related cause and effect.


The problem is the patent, not the regulation


You’re correct that the patent should’ve never been awarded, but the regulation still caused a problem today - something that could’ve been avoided if a cause-effect analysis was done. This is a problem statement that is applicable to most regulation today.

This is why blanket bans are almost always bad.


That logic cuts both ways as a tool to prevent important regulation that harms a small interest for the public benefit.


That’s why you an analyze cause and effect. You should target the highest driving factor and ban that, not blanket ban and catch things in the crossfire that don’t make a statistical difference to what you’re trying to improve - that way you don’t cause ill effects elsewhere.


You might not get the price-benefits you expect.

If the only remaining allowed use for R-12 is in inhalers, the manufacturing volume might be so low that you end up in a similar situation to today: Fewer manufacturers (likely just one), higher prices, and supply-chain issues.


That's just your bias.

> Several inhaler manufacturers formed the International Pharmaceutical Aerosol Consortium, a lobbying group dedicated to, among other goals, persuading lawmakers and regulators to ban inhalers with CFCs. The group spent hundreds of thousands of dollars, and in 2005, the FDA ruled that CFC inhalers would be phased out beginning in 2009. As a result of the ban, newer albuterol products — including Proventil HFA (which was approved in 1996), Ventolin HFA (approved in 2001), and ProAir HFA (approved in 2004) — would be free from competition from inexpensive CFC-containing generics. HFA inhalers were protected by new patents on both the HFA propellants and the devices themselves, and they generally cost much more than generic CFC inhalers.

"Product Hopping in the Drug Industry - Lessons from Albuterol"

N Engl J Med. 2022 Sep 29;387(13):1153-1156. doi: 10.1056/NEJMp2208613. Epub 2022 Sep 24.

https://pubmed.ncbi.nlm.nih.gov/36155425/

[pdf] https://wvpublic.org/wp-content/uploads/2023/06/Tu-2022-Wout...


Well, patents are only supposed to be granted if an idea is non-obvious to someone skilled in the field. Replacing an illegal propellant with a legal one should be obvious to anyone in the field, so this patent deserves to be challenged.


and while we're at it, maybe punish the ones who granted it? perhaps even make the people who did it, and anyone who knew of it, and didnt try combat it PERSONALLY liable for it?


R-12 is banned for manufacture by international treaty (which carries the force of law): https://en.wikipedia.org/wiki/Dichlorodifluoromethane


You can read about it in the wikipedia page [0]. This refrigerant isn't manufactured anywhere anymore because it was creating a hole in the ozone layer.

[0] https://en.wikipedia.org/wiki/Dichlorodifluoromethane


The first I know about is the montreal protocol for the ozone. Countries (all 19X of them) agreed banned CFCs and pharmaceutical products weren't excluded.


It is true, which implies your understanding of the situation is confused. I dislike bigPharma as well, but I at least point the blame canon at the right target and not just indiscriminately point it at the person I dislike the most in the fight.


Among other things, they pay them not to.

https://www.nbcnews.com/news/amp/ncna447916

> Known as "reverse settlement payments," or "pay-to-delay" deals, the financial arrangements are a unique but common practice in the pharmaceutical industry. Essentially, they allow drug manufacturers in some instances to pay competitors not to manufacture generic versions of their products, thereby ensuring that they maintain patent protection for as long as possible.


How is this NOT a violation of antitrust laws? How does this not hurt market competition or even more basic, how is this not collusion or a price cartel?


It is. They make far more money than they lose in penalties when officials bother enforcing on any technical violations. It's such a huge pain in the ass to try enforcing these little violations and there's so much corruption and bureaucracy preventing effective enforcement of the big ones that any action against these companies at all is a noteworthy accomplishment for a regulatory agency.

Lina Khan is punching way above her weight and using the FTC to do the job it's ostensibly designed for. She's aggressively poking some very ornery and obnoxious bears, hopefully some precedents will be set and corruption repaired. Most regulators are incentivized to play within the whole wink-wink-nod-nod government revolving door system of crony capitalism, but Khan doesn't seem to be playing that game, which is nice.


Drug salespeople, doctors, pharmacists, and insurance companies.

If you get a prescription for a ProAir HFA inhaler, which is parented because it uses R134a, even if you did want to do your own research and evaluate whether the generic with the different propellant would work you can't just go buy the generic, you have to do extra work to get a prescription that applies.

Doctors don't write prescriptions for albuterol sulfate, they write ProAir HFA and it's up to the consumer to push back. They don't even advise taking OTC ibuprofen or pseudoephedrine, they say Advil and Sudafed. It's a pet peeve of mine, but it seems I'm the weird one in that respect...


In Canada pharmacists will generally just ignore brand names written by MDs and fill with generics unless there’s a known difference or the patient specifically asks (and is willing to pay more).


It’s similar in both countries with some slight variation in the US depending on the state.

Unless the prescription is marked as “do not substitute” pharmacists generally have the discretion to substitute for a generic, in fact a few states require it.


If you don't need to be able to carry it around, albuterol solution is still cheaply available for nebulizers - but you'll need a nebulizer (which isn't portable) to use it.

ProAir HFA is one in which the legally permissible substitutions by the pharmacist are limited, largely because the old propellant (and thus generics based on it) is not legal for sale.

We use trade names because they're shorter and easier for patients (and doctors) to remember. Outside of a few specialized areas - epilepsy, warfarin, thyroid hormone - very very few doctors use branded products when a generic is available (and there's nothing wrong with the generics there, except that you need to get the same product every time to titrate the dose, and unless you know that X pharmacy will only stock the drug from Y manufacturer, it's a crapshoot).


In the US if a doctor prescribed a brand name, the Rx works for the generic as well. For me, it usually happens automatically at the pharmacy with no action on my end.


A group of pharmaceutical companies that held patents for non-CFC inhalers got together and created the "International Pharmaceutical Aerosol Consortium" to lobby in order to get the generic version banned.


This isn't (AIUI) relevant to that exact problem. As Wikipedia explains:

"[T]he Orange Book lists patents that are purported to protect each drug. Patent listings and use codes are provided by the drug application owner, and the FDA is obliged to list them. In order for a generic drug manufacturer to win approval of a drug under the Hatch-Waxman Act, the generic manufacturer must certify that they will not launch their generic until after the expiration of the Orange Book-listed patent, or that the patent is invalid, unenforceable, or that the generic product will not infringe the listed patent. "

It sounds like it's easy for manufacturers to.keep adding patents, and the onus is on the generics to make the case that they're not violating. Perhaps most are just scared away, until every listed patent expires (and no new ones are added in the interim)


It could be interesting to see Ozempick prices for different countries: https://edition.cnn.com/2024/04/24/health/senate-ozempic-weg...


The exact same refrigerants that were used in US automotive air-conditioning, although now they moved on or are moving from R-134a to HFO-1234yf.

I still have a dozen vintage cans of R-12 but no vehicle that uses them.


I replaced all my r12s with propane. Worked much better than the 134 and it was cheaper.


> propane

a.k.a. R-290


I’m so impressed with the FTC lately, here is an excellent interview Jon Stewart did with the FTC chair Lina Khan: https://youtu.be/oaDTiWaYfcM

I did joke I’m really surprised the vested interests selected someone competent who wants to hold these companies accountable to the public.


There's a lot of talk about "both sides being the same", but the FTC alone has been a night & day difference from previous administrations.


I would like to point out the administration's accomplishments in the last two weeks (shamelessly copied from Matt Stoller's recent piece "This Is What Governing Looks Like")

* Banned non-compete agreements for 40 million workers

* Raised overtime wages for 4 million salaried workers

* Forced airlines to automatically offer refunds for canceled flights and poorly handled baggage

* Banned illegal junk fees in mortgage lending

* Forced divestment of TikTok from Chinese ownership

* Blocked corporate merger in insulation

* Filed to block a corporate merger in fashion

* Announced tariff increases on steel to protect domestic producers

* Announced an end to the duty free period on Chinese solar panels to encourage U.S. manufacturing.

* Passed the first Federal privacy law to stop data brokers from selling sensitive information to China and Russia


> * Passed the first Federal privacy law to stop data brokers from selling sensitive information to China and Russia

At the risk of sounding dismissive, I'd much rather they banned the selling of sensitive information. Full stop. China and Russia have much less reach into my day-to-day than any of the other buyers much closer to home like a local gov't bodies let alone private corps.



I'm doing this first thing in the morning, thank you!


> * Announced an end to the duty free period on Chinese solar panels to encourage U.S. manufacturing.

> * Announced tariff increases on steel to protect domestic producers

These are bad things.


Why?


Because these tarifs do more harm than benefit.

The harm is diffused among many, the benefits accumulates to a few.

https://taxfoundation.org/research/all/federal/section-232-t...


It is a national defense and manufacturing supply chain security premium. You might call that harm if you're optimizing the for the lowest cost possible, but that is not good policy in the current geopolitical climate.


Most of it needs backed up by Congress or it'll just go away given a few administrations.

> Announced tariff increases on steel to protect domestic producers

The Trump Admin went after China far more than Biden has so far, the Democrats were overwhelmingly silent about how that qualified as impressive governing. He needs to do a lot more to bolster US labor and US manufacturing, it's not even a good start yet.


Mostly people don’t give praise because Trump’s protectionism was largely ineffective and a large tax increase on working Americans.

https://en.wikipedia.org/wiki/Trump_tariffs


You can tell she's doing a good job by the number of hit pieces in the WSJ. Just search "Lina Khan WSJ" and have fun scrolling through the headlines.


To be fair, her first two years were bunk. She had management and morale issues, a series of court losses (including one glaringly incompetent one with Facebook) and then a retrenchment that looked like submission.

It wasn’t. She was re-working her game. It looks like it worked and I’ve gone from critic to fan. But the FTC was mockably awful 2020 - 2022, and a non-entity early 2023.


There will always be carry over from one administration to the next at the bureaucratic level within the various agencies. It takes time to figure out how to get them aligned to make progress with the new administration's agenda.


> takes time to figure out how to get them aligned

From what I understand, Khan was learning to manage a large team. She failed at it. Noticed. Corrected. And seems to have figured it out.

The early FTC was highly centralised. In its new iteration, staffers appear to be trusted to pursue probes on their own. This not only broadens their firepower, but brings to the table staffers’ decades of experience around what wins in court.


You might say she's running the FTC like a startup: hire exceptional people you trust to execute with autonomy.


> she's running the FTC like a startup: hire exceptional people you trust to execute with autonomy

The exceptional people were there from the start. In the early days, their complaint was around being locked out of decision making. Khan and a small group ran the FTC like academics.

That failed both internally and in the courts. To her credit, she noticed the failure, regrouped and re-oriented. But the change wasn’t in star hiring but recognising the talent that was being ignored.


What ever the cause of the slow start, it'll be a shame if it all comes to a grinding halt on Jan 20, 2025 now that this agency seems to be effectively doing its job.


I can't find it right now, but there's a quote about being able to tell someone's character by whether they've made the right enemies.


"I ask you to judge me by the enemies I've made" - Franklin D. Roosevelt


I think for stuff controlled by the president, “both sides are the same” is indeed clearly false. But there’s a decent argument to be made that it doesn’t really matter who you vote for for Congress, since the system is structured to require both parties to agree on almost any controversial legislation.


Do they? I'm not well immersed in the socials, but I thought "both side are the same" peaked around 2000, and now the pendulum has swung to "the other side is wrong in every way".


I’m definitely seeing more of this on the left than warranted by reality.


Nobody suggesting that "both sides are the same" has a shred of intellectual honesty.


Declarative moral statements like this are so vacuous. Of course there are intellectually honest people who believe both parties are the same. They may be evaluating or prioritizing the evidence differently, but that doesn't make one side or the other 'dishonest'. Casually impuning the morality of an entire swath of people is rhetoric that drives division and strife, not progress.

For example, yes Bidens FTC is a standout actor, but 'both sides' just voted to perpetuate overseas wars with more American tax dollars. In terms of the American war machine, it's 100% accurate to say both sides are the same.


Then I suppose the appropriate way to phrase this would be "people suggesting both sides are the same need to qualify their statements."


You're making the assumption that they haven't, at length, until people got uncomfortable and wanted to leave.


The scenario you’re proposing sounds like one person lecturing another and not listening to any counter points… wanting to leave feels like a natural reaction.


Sounds like you are making the case that "both sides are aligned in some rare cases". not that "they are the same".


No, and that reading is the exact dogmatic dipolism I'm talking about avoiding. Both sides are human, both sides are American, both sides of political spectrum are represented by the wealth elite. There are millions of common denominators between both sides, and a relatively miniscule number of differences. Most of the differences themselves are exaggerated by the political class, to show division and strengthen in-group ties. Believing one side or the other is morally superior is meaningless- the other side is always going to believe the same thing about you, with just as much supporting evidence.


And of course, the conservative Supreme Court is likely to strip the FTC of its power and render many of its decisions invalid, giving conservatives the last laugh on this and many other issues.


As they chortle over the rubble of this once hopeful progressing nation.


The Supreme Court is a joke nowadays. We really need terms at every level of major governing position.

Judge for life is a terrible precedent. Not that far from kings.

Especially the republican judges who take lavish trips funded by billionaires. Clear conflict of interest in open.


Both sides are the same in the way that, they generally work in tandem to erode the common individual in favor of the wealthy. That doesn't mean the totality of what they do is to that end, it doesn't mean that they aren't at odds with eachother as to how to reach that collective goal at times, just that, pragmatically, it doesn't matter anywhere but on very short, ultimately inconsequential time scales.

These things get planned and implemented far outside of the normal 2/4/6 year election cycle, so it's easy to hide what's actually happening.

Fact is, red tie, blue tie, they're all drinking and merrymaking together, they attend the same parties, they bang the same hookers, and they're in the same corporation's pockets. You have some outliers here and there, but, aside from the occasional filibuster, they do little more than create a spectacle.

None of this is unusual, it's simply how systems of government have been exploited and subverted since humans had the idea the government should exist. That being a somewhat esoteric idea only serves to further the degeneration of a system, much in the same way doing nothing, which is likely what some find so offensive about the idea that "both sides are the same", furthers the degeneration of a system.


In the last week I've read stories here and elsewhere about the current administration:

- Ending non-competes

- Ending salaries being used to avoid paying overtime

- Un-banning marijuana

- Restoring net neutrality

- Fining carriers for sharing location data

- And now, challenging dumb patents

Despite your cynical take, that looks like a lot of stuff that's good for me as an individual person.


They also passed a FISA bill that expanded government spying on its citizen. I'd trade all those items you listed to have illegal spying killed.


This frankly sounds like cynical rubbish.


There was a lot of chatter early in her tenure that she would be too young and inexperienced to be at all effective.


Which is a little silly given her credentials. Her antitrust research has been groundbreaking. She's almost single-handedly revitalized that area of law.


Sometimes, the old timers get too comfortable with the status quo and you need someone who is too young to challenge it.


Let's try that at the top of the chart instead of a couple steps down.


Challenging things like this is a great first step, but they’ve got to actually win.


The threat of litigation is often enough to change behaviors radically.

For example, many companies that had taken advantage of putting devices into the Hatch-Waxman Orange Book being an unchecked unmonitored way to lay claim took their devices off once they saw the FTC starting to get interested.

Adopting a narrow view of success is detrimental. Yes, it's hard as heck to figure out how to appreciate & be happy for "number of mergers never proposed because the FTChas actually started taking anti-trust seriously again". We will never have hard data. But for sure for sure for sure, companies are being more cautious, are thinking twice before trying to acquire their competitors or buying a company to land horizontal market control.

Even losing is a detriment. The FTC had done nothing under Borkism. It was free reign. Even winning to the FTC isn't fun. It's expensive as heck, and there's a ton of discovery that happens & sheds light in a lot of dark dark places in your corporation. And other people see, hey, the FTC is out there, they're doing things, and maybe we won't get as lucky.

Last, people act like, oh, the FTC lost, they must be incompetent & unable to build cases, but there's a ton of random chance & whim that goes into each case; replay a case in another courtroom or with different judges or juries and who knows what would have happenen.


FTC announcement: https://www.ftc.gov/news-events/news/press-releases/2024/04/...

Note that this comes following “the Commission’s November challenges led to Kaleo Inc., Impax Labs, GlaxoSmithKline, and Glaxo Group delisting patents in response to the FTC’s warning letters” and subsequently “AstraZeneca, Boehringer Ingelheim, and GlaxoSmithKline all announc[ing] commitments to cap inhaler out-of-pocket costs at $35.” This process is precedented with delivering wins.



Presumably they have their grounds for the challenges, and the article says that each drug is covered by numerous patents, but I would be very surprised if Ozempic in particular lost ALL patent protection. Semaglutide itself seems to be a fairly revolutionary product, and reasonably different from Liraglutide (which I think predated it).


They clarify "junk" in the article (and linked article) to mean "improperly listed", but what does that actually mean for a drug like Ozempic?


Novo Nordisk stock didn't fall so either this was already known or people don't think it will have any effect.


This article repeats the same thing 5 times or so. The headline is almost the whole article.


Why are these junk patents, especially the Ozempic one? I want to believe! But I'm skeptical that it is a junk patent.


FTC on a roll. I changed my opinion on Lina Khan. She’s actually getting shit done! I’m a fan.


The cost of healthcare should trend down as more and more drugs enter the public domain and generics become available. However this clearly isn't happening.

It is also interesting when does the social benefit of a drug outweigh the benefit of creating an 'incentive' for drug companies. If GLP-1 drugs are worthy of the hype, we're basically talking about 20 years of unneeded suffering and trillions of dollars of avoidable damage to society all to give a drug company a limited monopoloy. At a certain point the US should just eminent domain the patent, give them some reasonable compensation, and make the drug broadly available to all Americans similar to COVID vaccines.


Semaglutide was invented before 2008. Its patent expires in a few years.

It takes a long time to get drugs through trials and get the FDA to approve drugs for new uses. Pharmaceutical companies spend billions on drugs that never make it through trials. If you don’t enforce their patents, companies won’t make new drugs.


Overseas the patent expires in 2026. I the USA, it will be "no later than" 2031.


I wonder if a system like that could work.

SpaceX and numerous other companies were able to draw in billions of dollars of funding for R&D to chase after US Government contracts that could only be won by proving massive technological feats (reusable rockets, etc).

Hypothetically, it seems we could do something similar for drugs. Instead of "If you make a medicine that works, you get a monopoly to sell it for X years" it could just be "If you make a medicine that works, you get a check for $X, and then the drug is immediately generic".


The regulations are different. The FDA only gets in trouble if they approve a drug that turns out to be harmful, not if they fail to approve (or delay approving) a beneficial drug. On net, the FDA has caused far more harm than they’ve prevented. eg: Banning the importation of infant formula from the EU, or delaying the approval of new beta blockers by a decade.




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