OPINION:
The United States has led the world in pharmaceutical innovation for decades by developing drugs that combat cancer, heart disease, AIDS, diabetes and other killer diseases. One recent study found that “in health sciences, output, as measured by the Nature Magazine Index, the United States’ share is many multiples higher than the next 10 leading countries combined.”
The industry’s research and development have saved and improved tens of millions of lives in the U.S. alone and perhaps 10 times that number worldwide. Yet Washington has somehow come to regard the industry as a villain.
The newest U.S. wonder drug, Zepbound, is extraordinarily effective in weight loss. Millions of people are now using this drug, which is contributing to an improvement in the national health. Users of the drug treatment shots, which suppress appetite, typically lose 10% to 20% of their body fat. About 70% of Americans are overweight, and this miracle drug is reducing lives lost from obesity, heart disease, cancer and stress while allowing millions to become more active and feel better about themselves.
Here is the problem: According to the Tufts Center for the Study of Drug Development, developing drugs and getting them approved typically exceeds $2 billion and takes 10 to 15 years, and the failure rate is high. Ninety percent of drugs that reach the clinical trial phase never go to market.
For every drug approved by the Food and Drug Administration, a dozen or more fail and lose money for investors. The rare wonder drug “hits” must cover the costs of the much more common dead-end research, the “misses.”
American drug innovation is threatened by U.S. regulations that permit knockoff versions to be sold to consumers.
Companies known as “compounders” specialize in creating knockoffs and cashing in along the way. They generated nearly $5 billion in revenue in 2023.
Compounders freeload off the high research and development costs and slow approval times associated with new drugs. They modify patented, FDA-approved medicines by adding an ingredient or tinkering with the dosage and then mass-produce the knockoffs. No science supports this trickery in the case of weight-loss drugs.
Many of these “copycat” drugs are imported from China, which has routinely run roughshod over American patent rights.
The weight-loss drugs were so successful that demand outstripped supply. The FDA determined that there was a shortage of Ozempic and Wegovy and allowed copycat drugs to enter the market.
The FDA has moved those weight-loss drugs off its shortage list but gave compounding pharmacies an extra 60 to 90 days to stop producing them.
This undeserved gift rewards the knockoffs to the tune of millions of dollars, mostly to the Chinese, while penalizing the companies that have done the hard and expensive work of creating the drugs and getting them approved. The same FDA that endlessly delays drug approvals gives a free pass to counterfeit drugs.
Copycat drugs can save consumers money in the short term, but the societal cost of the signals this sends to the pharmaceutical industry could be devastating. It will surely cause delays and defund urgently needed medical research in areas such as multiple sclerosis, Alzheimer’s, brain cancer and epilepsy.
Tomas Philipson of the University of Chicago has proved that drug price controls to keep costs low curtail the advances of new drugs and kill many more people in the long run than the price controls save. Mr. Philipson concludes that “compounding as currently performed violates the exclusivity granted to by patents, and therefore shrinks the market for new innovation.”
The FDA should cut off access to these fake and unsafe drugs and allow the normal patent process to work to protect our intellectual property. Patent protection has made America the world’s leading disease combatant and will speed the next generation of lifesaving drugs.
• Stephen Moore is a senior fellow at The Heritage Foundation and a co-founder of Unleash Prosperity. His latest book is “The Trump Economic Miracle.”