Big Pharma’s Patent Abuses Are Fueling the Drug Pricing Crisis

Addressing the nation during his State of the Union speech, President Joe Biden took aim at an injustice that touches the lives of most Americans—the absurdly high cost of prescription drugs. As the president laid out, the U.S. has the highest costs on drugs in the world. Biden vowed to take action, which will undoubtedly lead to the pharmaceutical industry’s lobbyists, lawyers, and paid-for allies doubling down on their frenzied efforts to derail newly enacted drug pricing reforms in order to protect the industry’s power and profits. As important as these pricing reforms are, they target only certain parts of the drug industry’s complex, profit-making puzzle.

To fully grasp drugmakers’ vehement pushback on any attempts to reduce drug prices, it’s important to pull back the curtain on the industry’s ongoing anti-competitive practices to see what else is really at stake. Patent monopolies on 7 out of 10 of America’s top selling drugs should expire this decade. This means drugmakers stand to lose billions if—and when—lower-priced generic alternatives are allowed on the market. But unless America wises up to the industry’s under-the-table patent games, drugmakers will continue to have free rein to extend their patent protection, delay competition, and keep the cost of life-saving medicines sky high.

Today, 1 in 4 Americans cannot afford to take their medications as prescribed. Too many seniors are having to ration their treatments to get by until their next social security check arrives. And contrary to what industry lobbyists argue, soaring drug prices are not the inevitable result of research and development costs to bring breakthrough drugs to market. It’s time to put this widely debunked excuse to bed.

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At the root of our nation’s drug pricing crisis is the industry’s egregious abuse of a broken drug patent system. The U.S. patent system was originally designed to promote ingenuity and groundbreaking inventions by granting creators a limited monopoly period. When the system works as the Constitution intended, both industry and consumers benefit. Yet, somewhere along the way, drugmakers began manipulating the process to secure patents for simple tweaks to existing medicines, such as changing the way a drug is delivered or flavored. Big Pharma uses the patent system not to reward invention, but to block competition and extend lucrative monopolies.

This isn’t invention—it’s legal gamesmanship designed to bend and distort the rules to put profits ahead of patients. Drugmakers have realized it’s far easier to extend patent monopolies on existing drugs to stem losses from expiring patents than it is to invest in and invent groundbreaking new treatments to save lives. For decades, drug companies have been given carte blanche to systemically game the system by quietly obtaining patent after frivolous patent—often referred to as “patent thickets”—on many blockbuster drugs. This wily maneuvering allows them to extend their monopolies far beyond the 20 years of patent protection intended by law and block lower-priced competitors from entering the market. It also gives them the power to extract multimillion-dollar settlements in litigation from companies with would-be generic or biosimilar products.

A perfect poster child for undeserving patents is Regeneron’s product Eylea, which treats an eye condition known as macular degeneration that affects older adults. Eylea was approved by the U.S. Food and Drug Administration in 2011 and thanks to over 90 granted patents—including one for minor adjustments to its sterile packaging—the drug is unlikely to see any generic competitors for years to come. Today, the list price for a single dose of Eylea in the U.S. is over $1,800, while it costs roughly half that amount in the UK.

A recent national report reveals that, on average, there are 140 patents filed and 74 patents granted on each of America’s 10 top-selling drugs. Sixty-six percent of these patent applications were filed after FDA approval – many for very minor product modifications. Accompanying the report is a new Drug Patent Book, which offers the first publicly accessible, user-friendly drug patent database underscoring drugmakers’ unrelenting abuse of the patent system. Each additional day of patent exclusivity can mean tens of millions of dollars in revenue for a single drug: Revlimid and Keytruda, which treat cancer, earn $23.8 million and $26.8 million per day respectively; and Humira, which treats debilitating arthritis, was bringing in $47.5 million per day before the first competitor entered the market last week.

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Allowing Medicare to negotiate prices of some high cost drugs is an important step forward. But policymakers on both sides of the aisle must stop turning a blind eye to Big Pharma’s drug patenting schemes, which are having a profound impact on the health and pocketbooks of millions of American families.

The way forward involves three long-overdue reforms to the U.S. patent system. First, Congress must work with the U.S. Patent and Trademark Office (USPTO) and the U.S Food and Drug Administration (FDA) to raise the bar for what gets patented and eliminate incentives for drugmakers to game the system by obtaining frivolous patents. Secondly, we need a much stronger balance of public and private interests within the overall patent system to ensure greater transparency and accountability. This can be accomplished by the USPTO becoming more accessible for public input, as well as placing more members of the public on its advisory committee. And finally, the process to challenge undeserved patents must be revamped to be less costly and convoluted to encourage wider input from the broader public—the patients and consumers who bear the burden of high drug prices. Once patents are granted, current rules make it very hard to challenge their validity and mitigate their harm. These reforms will go a long way to ensuring the U.S. patent system better serves the public.

There is growing bi-partisan support in Congress to lower drug prices and enact long-overdue patent reforms. But Pharma is on the offensive trying to convince the public that patent reform would somehow stifle the invention of life-saving drugs. Congress must stand up to drugmakers’ deceptive, anti-competitive tactics and return the patent system to its original intent: an engine for breakthrough discoveries that benefit all Americans—not a vehicle to secure unprecedented profits for a few powerful corporations.