Expect More From... Drug Patents!

“..bipartisanship like this means that there’s either a “change that is desperately needed or you should be looking over the horizon for the Four Horsemen of the Apocalypse."” Spoken by Rep. Arrington regarding U.S. drug patents. As promised last week, we are diving into the six proposed reasons drug costs are so high, starting with gamesmanship of patents!

Government action abounds on multiple fronts regarding patent reform. The Federal Trade Commission (FTC) has placed 10 different biopharma companies on notice, impacting 100’s of drugs with suspected inaccurate patent listings. These notices are inclusive of significant reasons to comply given the reference to antitrust regulators authority to get involved if needed. The impact from those inaccurate listings created long-lasting financial burden to the country. Of those 100’s of identified drug listings, I-Mak highlights 4 common biologic drugs, Humira, Avastin, Rituxin and Lantus. The financial impact of those 4 drugs alone is staggering from exploiting the patent system. These drugs averaged 6 years of extended patent protection and generated over 2.5 times the revenue per year during the extended protection period ($6.2 billion per year vs. $2.4 billion per year).Humira’s results were most shocking.  With the additional 7 years of patent extension, AbbVie earned 70% of their revenue for Humira during the patent extension period, or $101.7 billion additional revenue. All while patients and employers waited for lower costing treatment options.

The Senate’s Health, Education, Labor and Pensions (HELP) Committee has taken up a different FTC patent related initiative. This FTC notice identified blockbuster drugs that allegedly exploited a loophole in the original patent. New patents were awarded to long-standing medications (typically about to face generic competition) due to small changes in its formulation. Common examples are when a medication is updated from immediate to long-acting formulations, citrate free or an improvement to the delivery device such as inhalers. Last fall, the FTC targeted the high cost of inhalers that have been around for decades. These inhalers are extremely high priced, especially when compared to other advanced countries. Currently the HELP Committee has been pursuing the FTC claims with “letters to AstraZeneca, Boehringer Ingelheim, GlaxoSmithKline and Teva Pharmaceuticals demanding information on the inhalers’ production, patient assistance programs and patents, including internal strategic communications.”  The breath of requested information could shine a light on the drug manufacturers pricing games that drive utilization within patients, providers and PBM formularies during the critical extended patent period.

Tackling the US patent system by enforcing antitrust laws and requiring vigorous standards for an existing drug to receive an updated patent has far reaching effects. Allowing market competition after a reasonable time improves access and affordability. The 4 drugs mentioned above achieved a combined total of 25 years of extended protection while generating $158B or 56% of total US revenues. Quality would increase sooner if patients had access to these minor delivery improvements during the drug’s initial approved patented lifespan, not just in the last year(s) when competition is looming. I challenge government committees to act swiftly and broadly for meaningful change to occur. The process of identifying egregious activity one at a time (insulin, inhalers, cancer therapies) continues to promote exploitation of other therapies not in the limelight.

An interesting take-away from the recent Capitol Hill vs. Pharma CEO battle last week was posed by legislators who specifically called out “…that while drugs take longer to get on the market in Japan and Canada, for instance, that hasn't hurt those countries' life expectancies. In fact, people in Japan and Canada live longer, on average, than they do in the United States.” EXPECT MORE from the issuance of patents. Is the race to be first improving our lifespan and health span or is it simply a way to accelerate approvals at an unregulated pricing paradox.