Mini-monopolies

I’m a big supporter of free markets and capitalism and even nefarious pharmaceutical companies. But today’s verdict in favor of Amgen in its patent infringement lawsuit against Roche is the sort of thing, I believe, turns off a lot of people (well, those paying attention.) This particular victory means that a new anemia drug won’t be released in the United States and Amgen will continue to corner the market’s $7 billion franchise.

I was surprised to learn that Medicare pays for the majority of dialysis treatments in this country, and thus it spends more than $2 billion a year on Amgen’s Epogen alone. How many similar patents corner the market and thus Medicare spending?

What happens if there’s only one basic formula or therapeutic option to treat a disease? Does that mean a single entity can lock up the market for over 20 years? Devoid of any competition, government agencies can’t even pretend to haggle down the price. At one point, I suspect, a congressperson or senator will decide that a “fair” price should be set for this drug. I realize the immense amount of funding that goes into R & R, but clearly, competition has to rattle these mini-monopolies before we give excuses for some wide-eyed official to start capping prices and destroying the pharmaceutical sector.

Or am I missing something?