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# Roll Back Drug Company Monopolies: Engelberg
- URL: https://www.fdaweb.com/roll-back-drug-company-monopolies-engelberg/
- Published: 2016-09-14T12:00:00.000Z
- Updated: 2026-09-14T21:31:45.000Z
- Author: David McFarland
- Tags: Drugs, #legacy-id-D5136798

The next U.S. president should ask Congress to roll back a number of monopolies granted to the drug industry over the years in a move to make drugs less costly. That’s the recommendation of retired intellectual property attorney and generic drug industry counsel **Alfred Engelberg**, who was instrumental in writing the Waxman-Hatch Act and litigating a number of generic drug patent claims against innovator products. Writing in a *Health Affairs* blog [post](http://healthaffairs.org/blog/2016/09/13/memo-to-the-president-the-pharmaceutical-monopoly-adjustment-act-of-2017/?ref=fdaweb.com), Engelberg says the monopolies in question were created in the expectation that monopoly profits would spur greater investment in research to fund important new drugs. “In fact,” he declares, “they have caused U.S. consumers to pay higher prices for medicines for longer periods of time while making the pharmaceutical industry far more profitable than any other industry. I believe the next president and Congress should take several key steps … to roll back these costly, unnecessary monopolies.”

The post says that the assumption that the monopolies would help cover the high cost of research has proven to be wrong. “After paying all research costs and other costs of doing business, pharmaceutical manufacturers earn profits that average close to 20% of sales,” Engelberg says. “The industry has consistently ranked as one of the most profitable industry sectors with returns that are more than double the median return for all industries. Moreover, despite the fact that 85% of all prescriptions are now filled with a generic drug, net sales of branded pharmaceuticals in the U.S. have grown from about $10 billion in 1984 to about $200 billion in 2015 and profits have skyrocketed in large part because U.S. consumers pay the highest prices in the world for branded prescription medicines. Yet, Congress has not only failed to consider how much profit the extra monopolies generate, but continues to explore legislation like the 21st Century Cures Act that would grant even more monopoly incentives.”

Engelberg writes that his Pharmaceutical Monopoly Adjustment Act of 2017 would: 

- reduce biologic drug market exclusivity from 12 years to seven;
- eliminate patent term extensions;
- substitute a tax credit for the six-month pediatric patent extension;
- repeal laws that delay FDA approval of generic drugs when patent claims are made; and
- equitably share the fruits of federally funded research with the public, recognizing that academic research center funded by tax dollars rather than drug companies have become the primary engine of drug discovery.

“Experience has proven that the government’s policy of granting extra monopolies to drug makers was a bad idea that has spurred excess profits for the pharmaceutical industry rather than more innovation,” Engelberg concludes. “In truth, there is no greater spur to innovation than the need to replace the lost profits from the looming expiration of an existing monopoly. The rollback of extra monopolies may actually compel drug makers to become more innovative if they wish to continue earning above average profits. But at the very least it will lower drug costs by shortening the length of pharmaceutical monopolies.”