The Problem

Big Pharma companies have enormous incentives to block market entry of lower-cost, generic drugs, for as long as possible.

For example, AbbVie Inc.’s rheumatoid arthritis drug Humira is the world’s best-selling prescription drug in the world, with over $16 billion in U.S. sales per year.

Humira was approved in 2002, and it now makes more money annually than all of the NFL teams, combined.  According to AbbVie’s CEO, the drug company has created a “patent estate” around the drug.  Its initial patent would have expired in 2016, but within the three years before that, the company applied for and obtained over 75 patents that would extend its monopoly to 2034 – and keep this enormously expensive treatment inaccessible to many patients, while burdening the healthcare system as a whole.

At least one of these patents has already been thrown out, because the U.S. Patent and Trademark Office (PTO) later found that AbbVie’s claimed “novel” use of the drug had already been well known and published in a medical journal prior to AbbVie’s patent application.  Yet in order to break AbbVie’s perpetual monopoly, companies must engage in time-intensive, expensive patent litigation, thus allowing the drug company to continue to profit as a result of its anticompetitive, government-granted monopoly.

“Over Humira’s lifetime, AbbVie has secured more than 100 patents to prevent anyone from attempting to copy the biologic, with $16 billion in annual sales.”

www.bloomberg.com

Pharma’s current strategies to maintain perpetual monopolies exploit weaknesses in the patent system’s police force to shield patents from attacks on patent quality and to extend their term artificially.  They also further exploit chokepoints in the regulatory review process to make it harder for the FDA to approve market entry of generic and biosimilar drugs in a timely manner.  View other Case Studies