The pharmaceutical industry has long been criticized for its strategic use of patents to block competitors and maintain high drug prices. This practice, known as “patent abuse,” involves the filing of numerous patents for minor modifications or secondary uses of existing drugs, creating a “patent thicket” that makes it difficult for generic drug manufacturers to enter the market. The consequences of this practice are far-reaching, affecting not only the cost of prescription drugs but also the innovation and competition that drive the industry forward.
The Patent Thicket Strategy
Pharmaceutical companies employ various tactics to create patent thickets. One common approach is “evergreening,” where companies file patents for slight modifications to existing drugs, extending their market exclusivity beyond the typical 20-year patent period. Another tactic is “product hopping,” where companies reformulate their drugs to maintain patent protection despite the expiration of the primary patent.
The Consequences of Patent Abuse
The impact of patent abuse on the pharmaceutical industry and consumers is significant. By blocking generic competition, pharmaceutical companies can maintain high drug prices, which disproportionately affect economically disadvantaged individuals. For instance, the patent obtained by Purdue Pharma for a treatment for opioid addiction has been criticized for potentially obstructing access to affordable treatment for those struggling with addiction.
Moreover, patent abuse stifles innovation by reducing the incentives for originators to innovate and affecting generics’ ability to develop alternative products. This practice also creates a fragile balance between patent monopoly and competition, ultimately harming consumer welfare.
Regulatory Efforts to Combat Patent Abuse
Regulatory bodies and lawmakers have taken steps to address patent abuse. The Federal Trade Commission (FTC) has challenged over 100 patent listings for medications specific to asthma and other inhaler devices, Restasis multidose bottles, and epinephrine autoinjectors. The FTC has also sent warning letters to pharmaceutical companies, disputing the accuracy or relevance of more than 300 Orange Book patent listings across 20 different brand name products.
Senator Amy Klobuchar has called on pharmaceutical companies to remove improperly listed patents from the FDA Orange Book, emphasizing that these patents can harm consumers, raise prices, and stifle competition. Klobuchar has also sponsored bipartisan bills aimed at promoting competition and reducing drug prices by limiting anticompetitive practices such as “pay-for-delay” deals and sham petitions.
Conclusion
The strategic use of patents by pharmaceutical companies to block competitors is a complex issue with significant consequences for the industry and consumers. Regulatory efforts to combat patent abuse are crucial to promoting competition, reducing drug prices, and ensuring that innovation benefits society as a whole. As FTC Chair Lina M. Khan stated, “By filing bogus patent listings, pharma companies block competition and inflate the cost of prescription drugs, forcing Americans to pay sky-high prices for medicines they rely on.” It is essential to continue scrutinizing and addressing these practices to ensure that the pharmaceutical industry operates in a way that benefits both innovation and consumer welfare.
