The Initiative for Medicines, Access, and Knowledge (I-MAK)
September 2022 | Link
PROBLEM
The patent system is not working as intended and the public is paying the price. Astronomical prescription drug costs are straining the healthcare system and the budgets of American families and employers. Prescription drug spending has increased 60% in the last decade to over $400 billion today. The status quo is unsustainable.
CONTEXT
Primary patents on 7 out of 10 of America’s top selling drugs are set to expire this decade. In theory, when these patents expire, generic or biosimilar competition should enter the market, and drug prices should come down. However, major pharmaceutical companies have significant financial incentive to delay the inevitable competition in the market once the primary patents expire. Drugmakers prepare for these looming patent expirations by filing or amassing hundreds of patents (“patent thickets”). The strategy of securing additional patents extends their monopoly power far beyond the 20 years of patent protection intended under the law for an invention. Pharmaceutical companies use this extended monopoly power in different ways, including extracting settlements in litigation from generic or biosimilar companies. These anti-competitive practices will in turn delay or block lower-cost drugs from entering the market, at substantial cost to the public.
Key Findings on the Ten Top Selling Drugs
- On average, there are 74 granted patents on each of America’s ten top selling drugs, providing major drugmakers substantial advantage to keep generic and biosimilar competitors off the market.
- Drugmakers filed more than 140 patent applications on average per drug; on average 66% of patent applications were filed after the FDA approved the drug to be on the market.
- Nearly one-third of Revlimid’s cumulative sales in the U.S. have occurred after its primary patents expired, and over two-thirds of Humira’s U.S. sales have come after the expiration of its primary patents.
- On average, four times as many patents are granted on the top ten drugs in the U.S. compared to Europe.
- Lower-cost generic and biosimilar versions of three top selling drugs – Humira, Eliquis, and Enbrel – launched in Europe an average of 7.7 years earlier than their expected U.S. entry. During this time, without generic or biosimilar competition Americans will spend an estimated $167 Billion on branded versions of just these three drugs. To date, these drugs still do not have generic or biosimilar competition in the U.S.
CONCLUSION
Drugmakers build anti-competitive patent thickets because they can: these abusive patent practices are permitted by law. We will not solve the drug pricing problem until we solve the drug patent problem, and the time has come for patent reform.
