Ambien/Ambien CR–Heads I win/Tails you lose

Ambien (zolpidem) Sanafi-Aventis’s blockbuster sedative was due to come off patent last October.  The FDA for whatever reason extended the patent 6 months to allow for further study of it’s use in children. 

This drug earns about a billion dollars a year for it’s manufacturer.  The company realizing it will be losing this revenue stream to generics recently received FDA approval for a controlled release version of Ambien (Ambien CR) which will be protected by patent for another two decades.  Releasing long acting versions of old drugs is almost standard practice in the pharmaceutical industry.  Long acting versions of old drugs extend the revenue stream with minimal investment.  In the case of Ambien CR there have been  no studies comparing it with either the original drug or other sedatives (it was approved after comparisons with placebos) so it is questionable that this new expensive medication offers any advantages.

To assure that patients will move from the original to the newly released drug Sanofi-Aventis raised prices.  According to AARP Ambien’s price increase during the first six-months of 2006 was the highest among the top drugs sold in the U.S.  It sounds counterintuitive but here’s how this works.  Ambien 5 mg went up 13.3% and Ambien 10 mg 9.9%. A  $100,000,000  increase in revenue from a one billion dollar seller.  The price of Ambien now exceeds that of the new medication, Ambien CR.  So, of course, it’s logical to switch your patients to the new medication, it’s cheaper–and also offers Sanofi a secured revenue stream.  Meanwhile, of course,  there are generic sedatives that work just as well for a small percentage of the  $3.00-4/pill Ambien.  Temazepam (generic Resteril), for example, sells for about $5.00/month.

Ambien’s development costs have long ago been amortized.   Despite this, prices for Ambien have been increased at rates that far exceed inflation.  As a matter of fact Ambien when originally released 100 pills cost about $150.  Now that $150 approximates the cost of 30 pills.  So over the course of the patent (since 1993) it’s price has more than tripled.  Overseas the cost of the drug is about 1/3 to 1/2 that which we pay here.

America is the monopolist’s dream.  A place where profits and patents trump the public good, where price manipulation is the norm and where negotiation (Medicare Part D) is a dirty word.

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