DOSE OF REALITY: CONGRESS CAN HOLD BIG PHARMA ACCOUNTABLE FOR GAMING THE SYSTEM TO BLOCK COMPETITION, KEEP DRUG PRICES HIGH

Dec 18, 2024

Lawmakers Should Pass Bipartisan, Market-Based Solutions to Crack Down on Patent Thickets and Q1/Q2 Reforms

Lawmakers must act to hold Big Pharma accountable for gaming the system to block competition from more affordable alternatives and keep prescription drug prices high. Two bipartisan, market-based solutions have been proposed for inclusion in a year-end government funding bill that would help increase competition. The Affordable Prescriptions for Patients Act (S.150), or Cornyn-Blumenthal, would help crack down on Big Pharma’s anti-competitive practice of building massive patent thickets around their biggest money makers. A second policy would reform the Q1/Q2 sameness requirements from the U.S. Food and Drug Administration (FDA) that Big Pharma abuses to extend exclusivity.

Cracking Down on Big Pharma’s Patent Thickets

The U.S. Senate unanimously passed Cornyn-Blumenthal in July. The nonpartisan Congressional Budget Office (CBO) estimates the legislation would produce savings of $1.8 billion.

Big Pharma’s patent thickets delay more affordable alternatives from coming to market and cost patients and the U.S. health care system billions of dollars each 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.

Q1/Q2 Reforms

Another way Big Pharma games the system to block competition from more affordable alternatives to high-priced brand name drugs concerns a process known as “Q1/Q2 sameness,” which refers to a requirement from the U.S. Food and Drug Administration (FDA) that “generic drug manufacturers mimic the brand-name drug formulation for certain formulations” so that these drugs are “Qualitatively the same, or Q1,” meaning they contain the “same inactive ingredients,” and that they are also “Quantitively the same, or Q2,” in that they have “essentially the same concentration” of these ingredients.

The problem arises in the fact that brand name drug makers can assert “trade secret protection” around many of the products generic drug makers are attempting to copy, meaning generic drug manufacturers have to “essentially play a protracted guessing game with FDA.” As Association for Accessible Medicines (AAM) CEO John Murphy III wrote in a recent column, this leads to “a lot of spilled ink, wasted resources and unnecessary red tape,” and has “delayed generic competition, and in particular competition for critical complex products—a growing category of medicines that have complex active ingredients, formulations, or routes of administration—that are frequently expensive and desperately require generic competition.”

One example Murphy cites is brand name drug maker Allergan’s dry eye drug Restasis. According to Murphy, “[i]t took FDA nine years to approve a generic version of Restasis because of asserted formulation trade secret claims by the brand-name manufacturer, Allergan. During that time, U.S. patients and payers were shelling out a lot for the extraordinarily expensive brand-name drug even though the relevant patents on Restasis had long been invalidated or expired.”

According to AAM, Q1/Q2 reforms would “save the U.S. healthcare system nearly $900 million over 10 years and bring lower-cost medicines to patients sooner.”