The Federal Trade Commission and Congress are ramping up efforts to rein in what they view as drug patent evergreening, a term referring to the continuing extension of patent rights on a specific product which serves to block generic and biosimilar competition from entering the market.
The United States patent system for pharmaceuticals aims to reward innovation by permitting drug companies to sell new medications on the market and bar other manufacturers from making generic or biosimilar versions for set periods of time. Once the patent expires, generics or biosimilars are allowed on the market, almost always at a lower list price than the brand name drugs.
Pharmaceutical companies can gain an average three years additional monopoly protection on branded drugs by filing secondary patents, a study published by researchers at the University of California, Los Angeles, indicates. Unlike primary patents, which apply to a drug’s active ingredient, secondary patents can cover things like how the drug is administered, formulated or dosed and what disease(s) it will treat. Drug makers may also file for secondary patents by citing proprietary manufacturing processes.
A recently released paper in the Journal of the American Medical Association found that between 2000 and 2015 there was a 200% increase in patents filed by originator companies, often involving relatively minor changes to dosages, formulations and delivery mechanisms.
Experts have voiced concerns about what they see as “systematic abuses of patent and regulatory systems,” which lead to higher prices for patients than would have come about had lower-cost competition from generic or biosimilar entry not been delayed.
At the same time, alterations in dosages and formulations can’t always be characterized as abuses of the system. They can impact health positively, through improved patient adherence and persistence. For example, in the HIV disease area, patients on single tablet regimens are more adherent and persistent than those on multiple tablet treatments.
However, a potential problem can occur when patent expiration dates get extended based on seemingly trivial items such as a plastic strap attached to a nebulizer, as was revealed during a CBS News 60 Minutes interview with Lina Khan, the Chair of the FTC. According to an FTC investigation, companies were listing patents for things like a cap or strap attached to an inhaler, which were unrelated to a drug’s ingredients, dosing or formulation.
Asthma inhalers certainly aren’t the only products being targeted by the FTC inquiry. Between 2005 and 2015, nearly three-quarter of new drug patents issued were for pharmaceuticals already on the market.
One area of particular concern for the FTC is biosimilars. According to industry analysts at IQVIA, biosimilars—which are almost identical copies of brand name biologics and produce therapeutically equivalent outcomes—can significantly reduce healthcare spending nationwide. Biosimilars are typically at least 30% lower in terms of list price compared to their original biologic counterparts. More optimal use could reduce prescription drug spending in the U.S. by more than $100 billion in the next five years. But to realize these savings, it will be necessary to remove so-called patent thickets that impede biosimilar uptake. Patent thickets reference the numerous patents drug companies may file to create hurdles to market entry for prospective generic or biosimilar competitors. They’re long been recognized as impediments to biosimilar penetration. Former Food and Drug Administration Commissioner Scott Gottlieb said six years ago that “patent thickets that are purely designed to deter the entry of approved biosimilars are spoiling this sort of competition.”
And so, policymakers and experts across the political spectrum have urged bipartisan reforms that strike an “appropriate balance” between ensuring patents reward innovation while facilitating timely competition to make prescription drugs more affordable for patients.
One such expert, David Mitchell, a cancer patient and advocate, has frequently given testimony in Congress on the topic. He has highlighted how pharmaceutical firms may manipulate the patent system through strategies such as patent thickets, product hopping and pay-for-delay to prolong their monopolies and block lower-cost generic and biosimilar competition from entering the market. Product hopping is when a company switches a patient population from a branded product whose patent is expiring—and therefore facing imminent competition—to a different formulation of the original drug that has a later expiring patent. In a pay-for-delay situation, brand name drug manufacturers induce competitors to delay selling a generic or biosimilar version of a drug.
While the different approaches drug companies pursue to extend patents can result in higher consumer prices, they aren’t illegal per se. And in defending intellectual property rights, the pharmaceutical industry maintains that patent reform isn’t needed. The trade group Pharmaceutical Research and Manufacturing Association often cites the fact that more than 90% of prescriptions in the U.S. are for generics or biosimilars. The industry has also maintained that certain patent extensions follow important innovations, such as new, simpler routes of administration that may improve health outcomes for patients.
It’s hard to find bipartisan consensus among lawmakers in Congress these days. But pharmaceutical patent reform is an area in which there’s widespread agreement. Currently, there are multiple bipartisan bills in Congress which have passed out of Senate committees and that are designed to close loopholes in the patent system.
To illustrate, Senators have introduced a bill named the Affordable Prescriptions for Patients Act, which aims to limit patent thickets and product hopping. The proposed legislation would authorize the FTC to enforce and impose limits on patent litigation involving prescription drugs. If enacted, the Act would seek to limit the number of patents that an originator biological product manufacturer can make a claim to in a patent infringement lawsuit against a company that wants to to sell a biosimilar version.
In parallel to what’s being proposed in Congress, the FTC is directly challenging drug makers on what it deems are improperly listed patents in the Orange Book (an FDA publication containing approved products with therapeutic equivalence evaluations) regarding 20 brand name pharmaceuticals. The agency first announced in Sept. 2023 that it was pursuing clarification from drug manufacturers regarding these products’ patents. The FTC sent warning letters to ten drug manufacturers this spring. It’s not been publicly revealed if and how the companies decided to reply. And to date it appears that the FTC has not taken any enforcement action concerning the Orange Book challenges.
It remains to be seen, however, how much FTC can actually accomplish at the moment as patents are issued by the Patent and Trademark Office, while pharmaceuticals, including new dosages, formulations and delivery mechanisms, are regulated by the FDA. Nonetheless, it’s clear from a letter written to the PTO in 2021 by the former Acting Commissioner of the FDA, Janet Woodcock, that the agency is seeking ways to work with the PTO to “identify abuses of the system that can impede competition.”
In sum, the pressure is mounting in Congress and the regulatory agencies for changes to the pharmaceutical patent system. Time will tell just how quickly actual reform will come about with accompanying enforcement action.
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