DOSE OF REALITY: BIG PHARMA’S PATENT ABUSE BLOCKS COMPETITION IN THE PRESCRIPTION DRUG MARKET, KEEPS DRUG PRICES HIGH

Senate Hearing Offers Opportunity to Highlight Market-Based Solutions to Hold Big Pharma Accountable for Anti-Competitive Tactics That Cost Patients and Taxpayers Billions of Dollars

The U.S. Senate Committee on the Judiciary is scheduled to hold a hearing Tuesday, “Ensuring Affordable & Accessible Medications: Examining Competition in the Prescription Drug Market.”

Ahead of this important hearing, get a Dose of Reality on Big Pharma’s patent abuse that blocks competition from more affordable alternatives to high-priced brand name drugs, like generics and biosimilars, and how Congress can act by advancing bipartisan, market-based solutions to lower drug prices for patients by holding Big Pharma accountable.

BIG PHARMA’S PATENT ABUSE COSTS CONSUMERS AND THE U.S. HEALTH CARE SYSTEM BILLIONS OF DOLLARS EACH YEAR

Big Pharma has a long history of price-gouging American patients through tactics designed to game the U.S. patent system and block competition from more affordable alternatives — enabling Big Pharma to maintain monopolies over their biggest money-makers. The pharmaceutical industry’s egregious abuse of the patent system is a root cause of high prescription drug prices because it enables Big Pharma to repeatedly hike prices on existing drugs and set out-of-control launch prices on new medications (knowing they can maintain monopolies longer on blockbuster products).

Big Pharma’s Patent Thickets On Just Five Drugs Cost Over $16 Billion In a Single Year

A January 2023 report from Matrix Global Advisors, “Patent Thickets and Lost Drug Savings,” quantified the one-year cost of lost savings on five brand name drugs around which Big Pharma has built especially egregious patent thickets. The five drugs were 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 estimated one-year cost of patent thickets on each of these brand name drugs was:

• $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

This amounts to a total of more than $16 billion.

The report calls for “tangible legislative reforms… to stop this long-standing anticompetitive practice.” In particular, the report points to “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.

Big Pharma’s Patent Abuse Increased Costs By More Than $40 Billion in Just One Year

In May 2023, The American Economic Liberties Project and the Initiative for Medicines, Access & Knowledge (I-MAK) released an analysis examining the staggering cost of Big Pharma’s anti-competitive practices on the U.S. health care system and American patients. The analysis found that Big Pharma’s anti-competitive tactics, including patent abuse, cost U.S. consumers “an additional $40.07 billion on pharmaceuticals,” in just one year, 2019.

 Targeting Blockbuster Products for Patent Abuse

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.”

EGREGIOUS EXAMPLES

Bringing the Patent Abuse Playbook to a New Category of Blockbuster Products: GLP-1 Weight Loss Drugs

A February 2024 analysis published in JAMA Network found brand name drug makers marketing a new category of weight loss drugs, glucagon-like peptide 1 (GLP-1) receptor agonists, are increasingly utilizing device patents to build patent thickets around these products to create and elongate periods of monopoly pricing power — despite the drugs effectively being older diabetes medications repackaged for a different indication. In other words, Big Pharma isn’t protecting actual innovation, but gaming the patent system to block competition, keep prices high, and boost profits.

The authors state in their conclusion, the “removal of these patents may substantially reduce barriers to generic entry by decreasing the number of patents that generic firms must contest ahead of [U.S. Food and Drug Administration] approval.” Without this competition, “prices for GLP-1 receptor agonists will remain high for many years, reducing access for patients and raising health care costs.”

A report released earlier this month from the IQVIA Institute for Human Data Science underscores the staggering potential cost of Big Pharma’s unsustainable prices on weight loss drugs if Congress does not act to foster competition. According to the report, spending on obesity drugs could reach between $35 billion and $73 billion by 2028, depending on the level of expansion in eligible patients for the drugs. Currently, spending on obesity medications was $5.4 billion in 2023, “up from just $0.7Bn in 2018 and largely driven by the uptake of novel GLP-1 treatments.”

Patent Thicket Surrounding Humira Drove More Revenue for Big Pharma Giant AbbVie Than All 32 NFL Teams Combined

While AbbVie’s blockbuster autoimmune drug Humira finally faced its first competition in the U.S. in 2023, over the course of its more than 20 years on the market, AbbVie applied for more than 300 patents on the brand name medication, securing more than half of them. 94 percent of the patents filed on Humira came after the drug was initially approved by the U.S. Food and Drug Administration (FDA). The strategy helped block competition for years and generate almost $200 billion for AbbVie. In 2022, the drug brought in more money for the company, $21 billion, than all 32 teams in the NFL combined, $19 billion.

Patent Abuse on Brand Name Inhalers Produced $111 Billion for Big Pharma After Active Ingredient Patents Expired 

In 2023, William B. Feldman and Aaron S. Kesselheim, physicians at Brigham and Women’s Hospital and faculty members at Harvard Medical School, highlighted Big Pharma’s extensive patent abuse on brand name inhalers used to treat asthma and chronic obstructive pulmonary disease in an op-ed published in The Washington Post.

The authors explained brand name manufacturers “have used the patent and regulatory system to keep generics off the market,” including through tactics like patent thicketing.

“Of the $178 billion that manufacturers earned on inhalers in the United States from 2000 to 2021, about $111 billion of that total came after patents on their active ingredients had expired,” according to the experts, who added, “the patent system was designed to promote innovation, not grant monopolies for small tweaks to devices containing decades-old drugs.”

BIPARTISAN, MARKET-BASED SOLUTIONS TO HOLD BIG PHARMA ACCOUNTABLE AND PROMOTE COMPETITION TO LOWER DRUG PRICES

Lawmakers must act to hold Big Pharma accountable for egregious abuse of the patent system.

The Senate Judiciary Committee has been a leader in fostering greater competition and access to more affordable medications. The Committee unanimously advanced several market-based solutions supported by CSRxP, that would help crack down on Big Pharma’s egregious abuse of the patent system to lower prices for patients during a February 2023 markup, including:

• Affordable Prescriptions for Patients Act (S. 150), led by Senator John Cornyn and Senator Richard Blumenthal
• Legislation to Address Patent Thickets (S. 3583), led by Senator Peter Welch, Senator Mike Braun and Senator Amy Klobuchar
• Interagency Patent Coordination and Improvement Act (S. 79), led by Senator Richard Durbin, Senator Thom Tillis, Senator Chuck Grassley and Senator Chris Coons
• Stop STALLING Act (S. 148), led by Senator Amy Klobuchar and Senator Chuck Grassley
• Preserve Access to Affordable Generics and Biosimilars Act (S. 142), led by Senator Amy Klobuchar and Senator Chuck Grassley

The Congressional Budget Office (CBO) has found these bipartisan solutions would collectively produce savings of more than $4 billion. Congress should swiftly advance these, and additional bipartisan solutions, to hold Big Pharma accountable for anti-competitive practices that are the root cause of high prescription drug prices.

Read CSRxP’s on the record testimony for the Senate Judiciary hearing HERE.

Read more on how Big Pharma’s patent abuse tactics drive increased costs for consumers and the U.S. health care system HERE.

Learn more about market-based solutions to hold Big Pharma accountable and lower drug prices HERE.