SYRIZA: The generic opposition party

This is an article I wrote that was originally published on November 27 at The Press Project–International Edition.

red pill with SYRIZA logo

Guided by an apparent desire to oppose the ruling coalition at all costs, Greece΄s main opposition party is attempting to block legislation that would bring down generic drug prices by utilizing alarmist anti-science rhetoric.

Author’s Note: this article is a translation with a few changes of a post I published on this site on November 26. It can be found here.

According to Scott Gavura at the Science Based Medicine blog, the most common definition of “generic drug” is the one used by the World Health Organization (WHO):

A generic drug is a pharmaceutical product. usually intended to be interchangeable with an innovator product, that is manufactured without a licence from the innovator company and marketed after the expiry date of the patent or other exclusive rights.

Generic drugs are marketed under a non-proprietary or approved name rather than a proprietary or brand name. Generic drugs are frequently as effective as, but much cheaper than, brand-name drugs. For example. paracetamol is a chemical ingredient found in a number of brand-name painkillers, but is also sold as a generic drug (not under a brand name). Because of their low price, generic drugs are often the only medicines that the poorest can access.

On the other hand we have “innovator drugs” or “brand name drugs”. Which per the US Food and Drug Administration (FDA):

like other new products, are developed under patent protection. The patent protects the investment in the drug’s development by giving the company the sole right to sell the drug while the patent is in effect. When patents or other periods of exclusivity expire, manufacturers can apply to the FDA to sell generic versions.

Pharmaceutical companies may choose to produce either generic of innovator drugs (or both). Both kinds of drugs are necessary. The cutting edge research and development that goes into producing more new medicine is vital for patients. Also massively beneficial is the innovation employed by generic manufacturers in order to bring down costs without sacrificing on quality allows drugs to be delivered to more people. However, because the investment risk of producing generics is much lower than producing innovator drugs (since not all new attempts at producing innovator drugs are successful), innovator manufacturers are given patent protection for a few years. Simply put, innovator drug manufacturers are provided a state enforced monopoly for a fixed amount of time in order to recoup their investments.

In a way, political parties are able to do the same. They can choose to adopt tried and tested “generic” policies and rhetoric, or they can be original and try out “innovator” approaches. Of course, in politics there is no patent protection. and copying is part of the game. From the point of view of the party leadership. generic policies carry less risk, since they know (up to a point) where they will lead. Sometimes, this is positive. The wheel need not be reinvented every time.

However, there are times when an innovator approach is required, as well as a certain level of maturity. The SYRIZA opposition party undoubtedly has its sights set on governing Greece. However, if the only policies it champions are of the generic variety, then it will be dependent on the ruling New Democracy/PASOK coalition in order to prevail. As much as I can sympathize with the desire to not lose the electoral gains that have brought SYRIZA to become the lead opposition party coming from relative obscurity, it does not mean that they need to adopt positions based solely on being in direct opposition with the ruling coalition. One of these cases is the upcoming parliamentary vote for new health legislation (link in Greek) which will take place today, November 27, where SYRIZA has chosen to oppose a bill that would mandate a price ceiling for both generic drugs as well as brand name drugs whose patent has expired (off-patent).

The main reason why their handling of this issue is so misguided is because they are relying on reckless anti-science alarmism. Leading the charge is SYRIZA party leader Alexis Tsipras, whose statements yesterdday about “cheap and dubious [generic] drugs” have absolutely no demonstrable scientific basis.

In addition, there is no logical basis nor has anyone articulated any convincing rationale about how SYRIZA’s position is even remotely related to their stated left-wing party principles. The proposed legislation sets a price ceiling of 50% of the innovator drug price or the average of the lowest prices in three other EU countries, whichever is less. It also mandates that all generic drugs are priced at a maximum of 65% of their off-patent equivalents. In other words, when an innovator drug’s patent expires, patients will have access to generic alternatives that are priced at a maximum of 32.5% of the price. The only reason why off-patent medication is available today in Greece at relatively high prices despite a lack of patent protection is because of the manufacturers’ name recognition. So when SYRIZA decides to oppose sensible legislation that limits the price of off-patent medication, the result is that they are siding with large drug companies’ profits. Profits that aren’t being generated due to innovation or value added, but due to brand equity. Finally, they are also effectively fighting to preserve a system that has created drug distribution profit margins of 42.19% (€120.59 annually on a per capita basis), which is among the highest in Europe according to a 2012 study by the Hellenic Association of Pharmaceutical Companies (HAPC) -the industry’s trade body:

% mark-up

price/pack (€)

margin/pack (€)

packs per capita

margin per capita (€)

Bulgaria

27.49%

4.46

1.14

17.55

20.06

Hungary

19.57%

7.06

1.31

18.50

24.15

Poland

29.55%

4.92

1.32

16.97

22.43

Romania

26.35%

5.63

1.35

14.80

19.95

Italy

51.72%

6.89

3.37

23.35

78.73

Portugal

38.89%

10.48

3.67

18.39

67.49

France

34.89%

11.77

3.81

23.36

88.98

Greece

42.19%

9.88

3.90

30.93

120.59

Spain

46.76%

9.00

3.91

22.98

89.92

Holland

41.84%

11.20

4.57

15.18

69.38

Austria

42.12%

13.61

5.22

17.02

88.83

Belgium

31.03%

21.04

6.10

11.72

71.46

Finland

44.09%

20.98

8.93

10.10

90.16

Ireland

54.55%

20.13

9.33

14.68

137.00

Norway

52.04%

25.79

10.35

8.67

89.70

Switzerland

40.98%

33.20

12.89

9.31

120.05

Source: IMS Pricing database; based on combined regulated wholesaler and pharmacy margin, 2011 Rx only via page 45 of the 2012 HAPC study (in Greek).

Of course, based on current indications, the proposed legislation will be become law thanks to the ruling coalition’s parliamentary majority. And if that is the case, what purpose does SYRIZA’s public opposition serve? Should they be elected, would they roll back the reforms effectively raising the cost of medicine for citizens? Of course not. They will likely turn into supporters and will no doubt want people to forget their previous statements on the issue, in the same way that the New Democracy party was transformed overnight into a supporter of the EU/IMF loan program once the party stopped being the opposition and joined the 2011 governing coalition. And this is why SYRIZA may (for now) take a public position against generic drugs, but their behavior appears to be very much that of a generic opposition party.

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