New Research: Big Pharma’s Abuse of the US Patent System Costs Patients Billions Each Year
Pharma-constructed patent thickets on a single drug can cost consumers up to $7.6 billion in one year; Policy reforms and Congressional action can help
Washington D.C., January 26, 2023 – Today, the Coalition for Affordable Prescription Drugs (CAPD) released a new report from Matrix Global Advisors (MGA), “Patent Thickets and Lost Drug Savings.” The report exposes and quantifies the cost to American patients and the health care system when Big Pharma companies accumulate superfluous patents and create what is known as patent thickets to protect profits and keep more affordable generic and biosimilar competition off the market. The report examines five brand drugs whose manufacturers have constructed patent thickets: Enbrel, Eylea, Humira, Imbruvica and Opdivo, and reveals that the cost of this abuse ranges from $1.8 billion to as high as $7.6 billion for each drug in just one year.
Key findings of the report include:
- The cost of patent thickets for each brand drug analyzed in one year is:
- $7.6 billion for Humira
- $3.1 billion for Imbruvica
- $2.5 billion for Eylea
- $1.9 billion for Enbrel
- $1.8 billion for Opdivo
- This short list of five products is not meant to capture the universe of drugs with patent thickets; rather it is intended to illustrate the magnitude of the problem.
- If policymakers do not act to address this cost crisis for patients, patent thickets will continue to block billions of dollars in lost savings for patients each year.
“This report quantifies the staggering effects of the patent system by some brand drug manufacturers,” said Alex Brill, MGA’s founder and CEO. “Policymakers have the opportunity to help lower drug prices for their constituents by advancing legislative reforms that restore competition to the marketplace and bring lower-cost alternatives like generics and biosimilars to market.”
Patent thickets specifically refer to excessive secondary patents that cover narrow areas such as dosing regimens and are distinct from the patents on the drug compound itself. Patent thickets block competition for longer than is intended by the legal and regulatory framework that promotes innovative drug development.
“This report is an important signal to policymakers of the powerful impact that putting a stop to Big Pharma’s anticompetitive behavior can have for lowering drug prices for patients,” said Maura Keefe, CAPD Spokeswoman. “This is just one of many regulatory loopholes that drug companies misuse to maintain their monopoly pricing power over lifesaving medications far longer than intended by patent law. CAPD urges policymakers to intervene and capture the billions in savings currently being lost each year.”
This report comes on the heels of past research sponsored by CAPD quantifying the effects of drug makers’ other anticompetitive tactics including product hopping that keep out competition and keep drug prices high.
Read the full report here.
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The Coalition for Affordable Prescription Drugs (CAPD) represents a diverse group of public and private employers, retirees, unions, and the pharmacy benefit managers (PBMs) they partner with to provide affordable, sustainable prescription drug coverage to their employees and members.
Matrix Global Advisors (MGA) is an economic consulting firm in Washington, DC, specializing in healthcare, tax, and fiscal policy. Drawing on years of policy experience, the MGA team uses analytics to help identify, quantify, and solve economic policy problems. Through the use of analytical tools and knowledge of the political and legislative process, MGA helps clients navigate legislative and regulatory proposals, craft policy reforms, and measure their own businesses’ economic footprints.