Government-Granted Patent Monopolies Lead to Corruption: Aduhelm Edition

January 15, 2023

A Washington Post editorial, following the outcome of a Congressional investigation, complained that the Food and Drug Administration (FDA) wrongly moved ahead with an accelerated approval process for the Alzheimer’s drug Adulhelm. It then approved a label that suggested the drug, which was being marketed for $56,000 for a year’s dosage, could be a general treatment for Alzheimer’s, even though the clinical trial evidence suggested it was at best appropriate for a small portion of patients with Alzheimer’s.

The editorial attributed the special treatment of the drug to the close relationship between Biogen, the drug’s manufacturer, and FDA staff. It implied that if there had been a more arms-length relationship, the FDA would not have been so positive towards the drug.

Missing from the editorial is any discussion of the government-granted patent monopolies that provide the incentive for this sort of corruption. If Adulhelm was being assessed for approval as a generic, selling for a few hundred dollars a year, there would be little incentive for its developers to devote lots of time and money to push the FDA to approve it, when the clinical trial data did not show clear evidence of its effectiveness. It was only the enormous amount of money at stake from having a monopoly on a presumably effective Alzheimer’s drug that gave Biogen the incentive to push the FDA to take steps not warranted by the evidence.

It is striking that the Washington Post can’t see the connection between granting patent monopolies, that can raise drug prices by 10,000 percent above the free market price, and corruption. It routinely complains about the corruption that can result from trade tariffs that may raise the price of manufacturers goods by 10-25 percent above the free market price.

There are alternative mechanisms for financing the development of prescription drugs, such as direct government funding, as we currently have with the National Institutes of Health. (See here and chapter 5 of Rigged [it’s free].) Apparently, the Washington Post does not allow these alternatives to be discussed in its pages, even as it notes the dangers of the patent monopoly system.


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