Lina Khan, chairwoman of the Federal Trade Commission. Photographer: Ting Shen/Bloomberg
The Federal Trade Commission and Congress are stepping up efforts to rein in what they consider drug patents evergreena term referring to the continued extension of patent rights to a specific product that serves to prevent generic and biosimilar competition from entering the market.
The U.S. pharmaceutical patent system aims to reward innovation by allowing pharmaceutical companies to sell new drugs on the market and preventing other manufacturers from creating generic or biosimilar versions for certain time periods. As soon as the patent expires, generic medicines or biosimilars are allowed on the market, almost always at a lower list price than the brand medicines.
Pharmaceutical companies can earn an average profit three years of 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 the active ingredient of a drug, secondary patents can cover such things as how the drug is administered, formulated or dosed and what disease(s) it will treat. Drug manufacturers can also apply for secondary patents by citing proprietary manufacturing processes.
A recently published paper in the Journal of the American Medical Association found that between 2000 and 2015 there was a 200% increase in the number of patents filed by originator companies, often involving relatively large numbers of patents. small changes to dosages, formulations and delivery mechanisms.
Experts have raised concerns about what they consider ‘systematic’ abuse of patent and regulatory systems”, which led to higher prices for patients than would have been the case if cheaper competition from the generic or biosimilar market had not been postponed.
At the same time, changes in dosages and formulations cannot always be characterized as abuse of the system. They can have a positive influence on health by improving patient compliance and perseverance. In the field of HIV disease, for example, these are patients who follow a treatment with one tablet more tenacious and persistent than that of treatments with multiple tablets.
However, a potential problem can arise when patent expiration dates are extended based on seemingly trivial items, such as a plastic band attached to a nebulizer, as was revealed during a CBS News 60 minute 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 inhalerthat were not related to a drug’s ingredients, dosage, or formulation.
Asthma inhalers are certainly not the only products affected by the FTC investigation. Between 2005 and 2015 almost three quarters of new drug patents were for medicines that were already on the market.
An area of particular interest to the FTC is biosimilars. According to IQVIA industry analysts: biosimilars– which are nearly identical copies of brand-name biologic drugs and produce therapeutically equivalent results – could significantly reduce healthcare spending across the country. Biosimilars are typically at least 30% lower in list price than their original biologic counterparts. Optimal use could reduce U.S. prescription drug spending by more than $100 billion over the next five years. But to realize these savings, it will be necessary to remove the so-called patent crop that hinders the uptake of biosimilars. Patent crop refers to the numerous patents that pharmaceutical companies can file to create barriers to market entry for potential generic or biosimilar competitors. They have long been recognized as barriers to biosimilar penetration. Scott Gottlieb, former commissioner of the Food and Drug Administration said six years ago that “patent crop intended purely to block the entry of approved biosimilars spoils this kind of competition.”
And so policymakers and experts from across the political spectrum have pushed for 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 made many statements testimony in Congress on this subject. He has highlighted how pharmaceutical companies can manipulate the patent system through strategies such as patent thickets, product hopping and pay-for-delay to extend their monopolies and prevent cheaper generics and biosimilars from entering the market. Product hopping occurs when a company switches a patient population from a branded product whose patent expires – and therefore faces threatened competition – to a different formulation of the original drug whose patent later expires. In a pay-for-delay situation, brand-name drug manufacturers cause competitors to delay sales of a generic or biosimilar version of a drug.
While the various approaches pharmaceutical companies take to extend patents can lead to higher consumer prices, they are not themselves illegal. And in defending intellectual property rights, the pharmaceutical industry continues to insist that patent reform is not necessary. The trade group Pharmaceutical Research and Manufacturing Association often cites the fact that more than 90% of prescriptions in the U.S. are for generic drugs or biosimilars. The industry has also maintained that certain patent extensions are the result of important innovations, such as new, simpler routes of administration that can improve health outcomes for patients.
It’s difficult to find bipartisan consensus among lawmakers in Congress these days. But pharmaceutical patent reform is an area of broad agreement. Currently there are several bipartisan bills in Congress, which have disappeared from Senate committees and are intended to close loopholes in the patent system.
To illustrate, senators have introduced a bill called the Affordable Prescriptions for Patient Act, which aims to limit patent thickets and product hopping. The proposed legislation would authorize the FTC to enforce and impose restrictions on patent litigation involving prescription drugs. If passed, the bill would aim to limit the number of patents a biologics manufacturer can claim in a patent infringement lawsuit against a company seeking to sell a biosimilar version.
In parallel to what is being proposed in Congress, the FTC is directly challenging drug makers on what it believes incorrectly cited patents in the Orange Book (an FDA publication of approved products with evaluations of therapeutic equivalence) regarding twenty brand-name drugs. The agency first announced in September 2023 that it was seeking clarification from drug manufacturers about the patents of these products. The FTC sent warning letters to ten drug manufacturers this spring. It has not been publicly announced whether or how the companies decided to respond. And to date, it does not appear that the FTC has taken any enforcement action regarding the Orange Book challenges.
However, it remains to be seen how much the FTC can actually accomplish at this point, as patents are issued by the Patent and Trademark Office, while pharmaceutical products, including new dosages, formulations, and delivery mechanisms, are regulated by the FDA. Yet it is evident from a letter written to the PTO in 2021 by former FDA Acting Commissioner Janet Woodcock, that the agency is exploring ways to work with the PTO to “identify abuses of the system that could hinder competition.”
In short, pressure is mounting within Congress and regulatory agencies for changes to the pharmaceutical patent system. Time will tell how quickly actual reforms will come about, with accompanying enforcement measures.