Prescription drugs can take a winding path to market. It takes much investigation and pre-clinical work before the first molecule enters a human subject’s body. After that there are still years of clinical trials ahead before a new drug makes it to market. Many candidates fail at some stage along the way.
Drugmakers invest huge amounts of money to get that new wonder drug into patients’ hands. Our patent system gives the maker 17 years to sell as much of the drug as they can for as much money as they can before other makers are allowed to produce their own generic version. The generics have to undergo their own testing and approval before coming on the market, but initial costs are much lower and the price of a brand-name drug tends to come down significantly once generics are available.
Unfortunately for the makers of the original drug, the patent clock starts as soon as they’ve identified their molecule, and keeps running while the trials are underway. This means that the competition-free time for a new drug is significantly less than 17 years. But sometimes the maker has a backup strategy.
Extending the Life of a Drug
If you’ll recall your dusty high-school chemistry, molecules are three-dimensional objects. And many molecules come in 2 mirror-image versions of each other—left- and right-handed versions if you will. As it turns out, for many of these molecules only one of the -handed versions has an effect in the body.
So when a manufacturer finds a molecule that will work as a new drug, the first introduction might be a mixture of both the left and right versions. This is a natural result of the manufacturing process, so it’s not like the maker is adulterating their product in any way. But it does mean that only half of the molecules of product X are doing you any good.
Here’s where the backup comes in. The patent was originally granted on the left-and-right mixture. The 17-year limit is coming up, and voila! here’s a “new” version that’s really only the active half of the original. There’s still patient trials to conduct, but no investigative work to be done, and the trials can typically be shorter and smaller (and so cheaper) because the original drug has already been shown to be safe and effective.
When Drugs Do the Splits
Here’s an example of how that works. In 1989 the FDA approved the drug Prilosec for the treatment of frequent heartburn and GERD (gastroesophageal reflux disease). Prilosec is the molecule omeprazole. In 2002 the FDA approved generic omeprazole. It’s no coincidence that in February of 2001 the FDA had approved Nexium to treat the same conditions—Nexium’s molecule is esomeprazole, the left-handed version of omeprazole.
While Prilosec had market exclusivity for 13 years, for Nexium it was 14 years (generic esomeprazole was approved earlier this year). One more year of protection might not seem like much, but in 2013 Nexium was the #2-selling prescription drug in the US, with sales of more than $6 billion.
I want to emphasize that there’s nothing underhanded about this process. The manufacturer simply adds a step to separate the two -handed versions, and packages the one that’s effective. And I’m not picking on Nexium, it just happens to be one I have data for at hand. But keep in mind that, in this example if Nexium works for you at whatever it’s costing you for your prescription, then the drugstore’s generic OTC version of Prilosec will probably work just as well.