How Patent Abuse Blocks Access to Biosimilars
Prescription drug costs are continuing to rise, but biosimilar medicines offer great promise for patients who need more affordable medicines. Biosimilars are lower-priced versions of brand medicines used to treat long-lasting and life-threatening diseases. Unfortunately, many brand drug companies are abusing the patent system to extend their monopolies on drugs, prevent biosimilars from coming to market, and keep prices high.
A biosimilar is basically a generic version of a biologic drug-a medicine that is made from living microorganisms found in plant or animal cells. They are usually very large and complex molecules or mixtures of molecules that can treat Crohn's disease, multiple sclerosis, HIV/AIDS, and other very serious diseases. Biologic drugs are often tremendously expensive, ranging from $100,000 to $300,000 per year, which renders them unaffordable for ordinary Americans. Therefore, cheaper biosimilars are essential if we want regular people to access these treatments. The biosimilars currently on the market average a 47% list price and an 18% net discount for Americans.
But although twenty biosimilars have been approved by the Food and Drug Administration (FDA), only seven of them are on the market. One of the main reasons for this is abuse of the patent system by brand name drug companies. In recent years these companies have worked to "accumulate dozens of patents near the end of the product lifecycle under the guise of 'innovative' processes or development that warrant additional protections. In many cases, these late-stage patents are filed when there have been no changes made to the product manufacturing process or the underlying product itself."
These patent thickets harm competition-companies that make biosimilars are discouraged from entering the market. Litigating a patent and overcoming it (even if the patent is completely baseless and will obviously be found invalid) costs about $3 million per patent, and litigating many patents costs a lot more. Former FDA Commissioner Scott Gottlieb called out companies for building patent thickets to stifle competition, and remarked that "if Americans had the opportunity to purchase successfully marketed, FDA-approved biosimilar prescription drugs, they could have saved more than $4.5 billion in 2017." Other estimates are even higher; the report found that if the twelve approved biosimilars that are off the market because of patent thickets were on the market, the health care system could have saved $7.6 billion since 2012.
To give just one example: AbbVie's creation of a patent thicket around its blockbuster drug Humira (used to treat rheumatoid arthritis) has kept more affordable biosimilars off the market. Annual price increases mean that Humira's list price is now over $50,000 per year! AbbVie holds at least 136 patents for Humira, which has earned over $130 billion since it entered the market in 2003. This patent thicket will extend patent protection for the drug until 2034! The FDA has approved three biosimilars for Humira, but none are on the market.
AbbVie's executives have made it clear that the purpose of these patents is to block competition. Multiple lawsuits from a grocery-worker union in New York, the city of Baltimore, and four health plans have been filed against AbbVie, alleging that this practice is anticompetitive and AbbVie should be held accountable for its actions.
Patent thickets also cost health care programs and taxpayers money. Medicare pays a high percentage of the costs for brand-name biologics, and if biosimilars were available, those costs would be greatly reduced.
Congress is considering solutions for this problem. The Affordable Prescriptions for Patients Act, sponsored by Senators John Cornyn (R-TX) and Richard Blumenthal (D-CT), would have defined patent thicket practices as anticompetitive to make it easier to bring antitrust lawsuits against drug companies that use the patent system to block competition. Unfortunately the section to combat patent thicketing was weakened-it puts a cap on the maximum number of patents a drug company can put on a drug, but the cap is set at twenty patents and only applies to patents filed four years after the FDA approves a drug.
Nevertheless this bill is a good beginning. Congress should pass it and follow it up with broader measures to stop this abuse and ensure that consumers have access to affordable biosimilars.