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CAPD Statement on New Report Showing How Pharma Patent Abuses Keep Drug Prices High

A new research report published this month by I-MAK shows how drug companies manipulate the patent and regulatory process to keep drug prices – and their profits – artificially high. The report, “Overpatented, Overpriced: How Excessive Pharmaceutical Patenting is Extending Monopolies and Driving up Drug Prices,” shows how drug companies preserve their monopoly pricing power derived from gaming the system to block lower-cost generic competition from reaching the market for much longer than the 20 years of protection granted under U.S. law. Meanwhile, drug companies can continue to set high prices, reap record profits, and make it harder for patients to access more affordable medicines.

The report found that among the twelve best-selling drugs in the United States, drug manufacturers file an average of 125 patent applications per drug, 71 of which are granted. As a result, each drug has an average of 38 years of attempted patent protection – 18 years longer than envisioned under U.S. law. Delaying generic competition has enabled brand drug companies to increase the prices for these drugs by nearly 70 percent since 2012.

As the Administration and Congress continue to consider how to lower the cost of prescription drugs, this report highlights one way to lower drug prices right away: stop drug manufacturers from gaming the system to keep their profits high. As long as drug companies continue to abuse patent protection, prices will continue to rise and patients and payors will be left without affordable generic alternatives.

While Pharmacy Benefit Managers (PBMs) work with employers, health plans and unions to drive competition and lower drug prices for patients, they can only do so effectively when competition exists in the marketplace. We urge the Administration and Congress to take actions to speed affordable generic market entry and end drug companies’ abuse of our patent system.