DOSE OF REALITY: SENATE HEARING PROVIDES OPPORTUNITY TO HOLD BIG PHARMA ACCOUNTABLE FOR EGREGIOUS PATENT ABUSE

Critical Legislation Targets Anti-Competitive Practices like Patent Thickets and Product-Hopping That Cost Patients and the U.S. Health System Billions of Dollars

Today, the U.S. Senate Committee on the Judiciary is scheduled to consider legislation that would crack down on Big Pharma’s egregious anti-competitive tactics that block competition from more affordable alternatives. Introduced by Senators John Cornyn (R-TX) and Richard Blumenthal (D-CT), “The Affordable Prescriptions for Patients Act of 2023,” has previously won strong bipartisan support and would help end practices like patent-thicketing and product-hopping that brand name drug companies’ use to extend monopolies and keep prices high.

Ahead of the markup of this important legislation, get a Dose of Reality on Big Pharma’s egregious practices designed to game the system to extend exclusivity, block more affordable alternatives and boost profits by keeping drug prices high. 

PATENT ABUSE: ‘BUSINESS AS USUAL’ FOR BIG PHARMA

Big Pharma has a long history of price gouging American patients through tactics used to game the system, such as patent thicketing and product hopping, to hinder generic competition and maintain monopolies over their biggest money makers.

Voters Support Market-Based Solutions to Crack Down on Big Pharma’s Patent Abuse

A recent survey conducted by Morning Consult found overwhelming majorities of American voters support market-based solutions to stop Big Pharma from continually exploiting loopholes and abusing the U.S. patent system.

• 85 Percent of voters say it is important that Congress prevent pharmaceutical companies from abusing the patent system to extend monopolies and keep prices high by blocking competition, including more-than-half of voters who say this is “very important.” This includes massive majorities of voters across party lines, with 86 percent of Democrats, 81 percent of Republicans and 75 percent of independents agreeing stopping Big Pharma’s patent abuse is important.

• 69 percent of voters support Congress passing legislation to stop the practice of “patent-thicketing,” the process where companies will build a dense web of many overlapping patents surrounding one drug, which extends periods of exclusivity on that drug and make it difficult for other companies to produce more affordable alternatives.
• 70 percent of voters also support Congress passing legislation to stop the practice called “product-hopping” or “evergreening,” in which a drug company pursues strategies to reformulate a product and extend patent exclusivity.

I-MAK Call for Patent Reform to Be Top Priority in 118^th Congress

In January, Tahir Amin and Priti Krishtel, co-executive directors of the Initiative for Medicines, Access & Knowledge (I-MAK), published an op-ed in The Hill calling on Congress to lower prescription drug prices by holding Big Pharma accountable for the industry’s egregious abuse of the patent system.

• “Today, many drugmakers are less focused on researching and developing new drugs than protecting their monopolies on old ones — to such an extent, in fact, that pharmaceutical companies file for an average of more than 140 patentson top-selling drugs,” the authors wrote. “Many companies delay or block more affordable competitors from entering the market for far longer than the 20-year protection allowed by law.”
• To hold Big Pharma accountable and lower prescription drug prices, the authors outline solutions in three areas: 1) Congress must stop Big Pharma from gaming the patent system to extend monopolies; 2) lawmakers must expand public participation in the patent system; and 3) Congress must ensure a return on investment for public funding of pharmaceutical research and development.
• “Surely, to earn special privileges in the marketplace, companies should be required to do more than merely change a tablet into a capsule, branding it as ‘innovation,’” the authors wrote.
• “Lawmakers, too, agree across the aisle that patent abuse is aggravating the crisis,” the authors continued. “Patent system reform is not a partisan issue; it’s an American issue. The new Congress has an opportunity to address it, once and for all.”

Report Highlights the Staggering Cost of Big Pharma’s Patent Thickets

A new report released last week from Matrix Global Advisors and commissioned by the Coalition for Affordable Prescription Drugs, “Patent Thickets and Lost Drug Savings,” examines the cost of Big Pharma’s use of ‘patent thickets’ on patients and the U.S. healthcare system.

The report quantifies the one-year cost of lost savings on five brand name drugs around which Big Pharma has built especially egregious patent thickets: AbbVie’s autoimmune drug Humira and oncology drug Imbruvica, Regeneron’s ophthalmology drug Eylea, Amgen’s autoimmune drug Enbrel, and Bristol Myers Squibb’s oncology drug Opdivo.

The report assesses what the savings would be for these five drugs if “a steady state of competition [existed] where generics and biosimilars have achieved price discounts and uptake currently observed in the market.” Based on these calculations, the one-year cost of delayed competition from patent thickets on these five drugs would range from $1.8 billion to $7.6 billion. The one-year cost of each of these brand name drugs on the U.S. health care system due to their patent thickets is:

• $7.6 billion for Humira
• $3.1 billion for Imbruvica
• $2.5 billion for Eylea
• $1.9 billion for Enbrel
• $1.8 billion for Opdivo

While the report points to recent progress on the issue of Big Pharma’s patent abuse, including efforts from lawmakers and President Biden to increase coordination between the U.S. Patent and Trademark Office (PTO) and U.S. Food and Drug Administration (FDA), the report calls for “tangible legislative reforms… to stop this long-standing anticompetitive practice.”

In particular, the report points to the legislation being marked up by the Judiciary Committee today, “the Affordable Prescriptions for Patients Act,” which would “limit the number of patents a brand drug manufacturer can contest,” as one important solution for lawmakers to consider.

A Recent Case Study in Big Pharma’s Patent Greed: Keytruda

In December, Big Pharma giant Merck announced that it will seek new patents on its blockbuster cancer drug Keytruda, which last year brought in over $17 billion for the company. According to reporting from Reuters, Merck is seeking “to patent a new formulation of its $20 billion cancer immunotherapy Keytruda that can be injected under the skin, allowing it to protect its best-selling drug from competition expected as soon as 2028.”

This is just the latest example of a strategy Big Pharma companies have used repeatedly to extend their monopolies on blockbuster products – filing for patents for changes such as intake method or dosage that don’t represent truly new innovations or improve clinical benefits for patients. This enables Big Pharma to add to patent thickets designed to block competition from more affordable alternatives, keep drug prices high and boost profits.

Dr. Shailender Bhatia, an oncologist at the Fred Hutchinson Cancer Center in Seattle said, “I don’t think it’s going to improve the safety or the effectiveness of the drug.”

“It’s the way the pharmaceutical companies now use that system — it’s all about taking up as much space as possible, making it difficult for anybody to enter,” Tahir Amin, co-founder of Initiative for Medicines, Access & Knowledge (I-MAK), said in Reuters coverage of the move. “Keytruda is going to be the next Humira by all accounts.”

According to research from I-MAK, Merck has filed for 129 patent applications on Keytruda – more than half of which were filed after the drug’s initial approval by the U.S. Food and Drug Administration (FDA). The Big Pharma company has been granted 53 patents on this one drug. I-MAK estimates that Americans will spend at least $137 billion on Keytruda while the drug faces no competition due to its extended exclusivity that already totals more than eight years — without reflecting the added impact of the Big Pharma giant’s new patent strategy.

Targeting Blockbuster Products for Patent Abuse

And a May 2022 study published in JAMA Health Forum revealed how brand name drug companies target their most profitable products for reformulation to extend monopolies and prohibit generic competition from entering the market.

• The results of the study showed that “of 206 brand-name drugs approved in tablet or capsule form by the U.S. Food and Drug Administration between 1995 and 2010, approval of new formulations was four times more likely among blockbuster drugs.”
• The study also found that drug makers sought to pursue new formulations, “less frequently once generic competitors entered the market.”

Read more about how Big Pharma’s patent abuse blocks competition, harms consumers and contributes to ballooning taxpayer spending HERE.

Read more on why Big Pharma’s tired argument that innovation justifies their out-of-control prices doesn’t hold up to scrutiny HERE.

Read more on market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.