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Can Anyone Say "Patent?"

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Tuesday, 08 May 2012 09:48

Washington Post readers must be wondering after reading an article on a settlement by Abbott labs in a case brought by the Justice Department over promoting its drugs for off-label uses, in which Abbott agreed to pay $1.6 billion. The issue is that the Food and Drug Administration determines the acceptable uses for a drug. While doctors are allowed to prescribe drugs for other uses, the manufacturers are not allowed to promote their own drugs for "off-label" uses.

The Justice Department apparently had compelling evidence that Abbott had promoted off-label uses of its drug Depakote, a drug that was being improperly promoted as a sedative for elderly patients in nursing homes, according to the article. Such off-label promotions are a common, even if illegal, practice as the article notes.

The reason that drug companies violate the law and promote their drugs for unapproved uses is the huge patent rents that they are able to earn as a result of the patent monopolies granted by the government. Generic drug companies do not engage in the same sort of practices because they don't have the incentive.

It would have been worth mentioning patent monopolies since they are central to the story. This sort of abuse is one reason that people are interested in promoting more efficient alternatives to patents for financing drug development.

Comments (2)Add Comment
I think you meant
written by Kat, May 08, 2012 4:08
"its drug Depakote as a sedative for elderly patients..."
That would be the off label use.
The whole patent/IP/copyright system needs to be overhauled...
written by Carl Weetabix, May 08, 2012 5:10
The whole system is completely out of touch with modern reality, particularly in a system where innovation (I hate that word, but it works here) is so rapid. The too easy doling of patents and too long protection is hindering development and mostly serving the rentiers of the world. It certainly is not serving society (and no, that is not to say I am a Stalman-esque anti-copyright zealot, I just believe that we should look to bringing patents into the new millennium).

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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