In this video, S. Sean Tu, PhD, JD, professor of law at West Virginia University in Morgantown, discusses the methods that pharmaceutical companies use to monopolize the prescription drug market. Tu’s recent New England Journal of Medicine article notes that “method of use” patents in particular are being used to circumvent generic and biosimilar market entry.
The following is a transcript of his remarks:
There are three main methods that I’m interested in that deal with patent practice, since I’m a patent law person. Broadly, they’re evergreening, patent thicketing, and product topping.
Evergreening is where you get a new patent that basically extends the life of your original patent. For example, albuterol has been used for asthma patients since the 1980s, and the patents on that drug have long expired. However, drug companies have patented the devices that are now used to deliver albuterol. They patent things like the dosage counters, the dispensers, the nozzles, the canisters, the valves, the list goes on and on, right? Basically anything that they can patent, they’re patenting. And I can’t blame them because if even one patent delays or prevents generic entry, it will pay for itself.
The second thing that I’m interested in is product topping. This is where firms will try to get patients to move from drugs with expired patents onto drugs that are new drugs that have patent protection and are higher priced.
The third strategy is called patent thicketing. This is where you get many patents directed towards the same product. These patents may expire at the same time, so it’s really not about extending the life of the patent, it’s about increasing transaction costs for generics to get onto the market. It’s one thing to have to invalidate one or two patents before I can go to the market, it’s a completely different thing to have to invalidate 12 or 15 or sometimes even 100 patents before I can get to market, even if these patents are very similar.
The Humira [adalimumab] patent thicket consists of over 100 patents. They don’t allow this kind of gamesmanship in Europe. There are much fewer patents on Humira in Europe. And guess what? They already had biosimilars to Humira on the market 2 years ago.
You might say, “Well, it’s not a big deal. It’s only 2 years.” With that said, this drug costs about $80,000 a year per patient, right? So AbbVie has made over $21 billion on this drug in just 2021. That amounts to about $57.5 million a day. So even a day’s worth of delay really causes problems.
The article that we recently published in the New England Journal of Medicine has shown that there’s been a real increase in the number of these, what are called “method of use” patents. In the last 20 years, it’s really gone up from 2,000 to 8,000 of these things.
Manufacturers have overcome these patent thickets based on these method of use patents by creating what’s called a “skinny label.” So if you have a drug that has patents that protect the use of — let’s say drug X for diabetes. If that patent expires, then I should be able to use drug X for diabetes. Then, if the manufacturer comes up with a new use for that same drug — so drug X is now used for cancer — Congress understood this problem and created a system by which you could carve out the old indication in the label. So, in this example, the generic firm would create a label that said you can use this drug for diabetes and not mention anything about cancer.
This skinny labeling pathway is under threat because generic firms have to copy. They’re mandated by the FDA to use very similar language to the drug that is already out there. So now brand manufacturers are saying, “You violate my new patent because you copied my old label.” The weird thing is the FDA forces the generic company to use labels that are very similar to the brand.
And the brand, mind you, controls the label, right? So if I’m a smart brand company, I’m going to try to make the label look like it covers the new cancer indication, and the generic company has to copy that label. And if they do that, then I’m going to sue for induced infringement.
How does this tie into the most recent New England Journal paper that we published? Well, these thickets are comprised in large part by these method of use patents. So, we’re starting to see that patents are being listed for all sorts of indications. If it was the difference between diabetes and cancer, that’s a good thing, right? We want people to find really new uses for old drugs. However, these method of uses are very similar to each other.
For example, Vascepa [ethyl eicosapentaenoic acid], which is basically fish oil, it has 67 patents associated with 40 different unique use codes, 69 use codes are associated with it in total. Here is just an example of these different method of uses. “A method of reducing triglyceride levels in patients suffering from severe hypertriglyceridemia.” Basically, if you’ve got really high triglyceride levels, this drug will help lower your cholesterol levels.
The second use is: “The method of reducing triglyceride levels in patients on statin therapy, suffering from severe HTG [hypertriglyceridemia].” The third use is: “The use of Vascepa to lower triglycerides and low-density lipoproteins in adult patients with elevated triglyceride levels.” These indications are very similar, right? You can imagine it would be hard to create a label that carves out one but not the other. Unless Congress or the Supreme Court steps in, this skinny label attack will likely increase.
Why is this bad? Because we won’t get generics on the market as quickly, especially since it’s fairly easy, like I just showed you, to get a lot of patents on new methods of uses that really aren’t that different from each other.
I don’t think things are going to get better unless people really start getting mad at these crazy prices. Ben Rome has done a great study showing that the average launch price of a drug was about $2,000 in 2008, which is still pretty high, but in 2020 almost 50% of the drugs that launched were at $150,000. That is absolutely insane to me.
We’re transferring a huge amount of wealth from the public to drug companies. Employers are going to have to pay higher insurance premiums for these drugs. Taxpayers are going to have to pay higher taxes for Medicare and Medicaid to cover these drugs.
And I understand these drugs are hugely important. Literally, some of them are lifesaving. However, I think drug companies are getting wise to the fact that they can really charge whatever they want. If I asked you the question, “How much are you willing to pay to live?” I think the answer would be, “All of the moneys. All of it, all of my money! I want to live.” Drug companies have been increasing the prices to a level that really isn’t sustainable, and frankly, it’s not justified.
When we make these huge payouts to drug companies, we have to give up other things. We give up funding for education, we give up funding for infrastructure, we give up funding for social security. If you want to think about it on the other side, we give up funding for the police, funding our military, or even being able to pay down our own debt. This shouldn’t be a Republican or Democratic issue. Both parties should be fighting against these high costs.
One interesting solution that is very, very recent is being set up by California. California is getting into the drug manufacturing business because these costs are just getting too high. I would love to see the government getting involved in the manufacturing business for drugs. These are classic public goods. You know, if the government did this, then we might have fewer drug shortages. We might have lower drug prices overall.
Of course, I think the industry will fight tooth and nail to keep government out of their business. With that said, I think that that’s a much better long-term solution than what we have right now.
Source: MedicalNewsToday.com
