These legal shenanigans by brand name drug companies keep medicine prices high for patients, taxpayers, and payers of healthcare. They also stifle innovation and medical advancements. CAPA will focus primarily on efforts to maintain government-granted monopolies through abuses of the patent system by drug manufacturers. These tactics by certain brand name drug companies prevent patients from affordably accessing the life-saving medicines they need, and they drain our resources to pay for healthcare.
The U.S. is an outlier in total annual spending on prescription drugs, surpassing $1,000 per person in 2015. Almost everyone agrees that competition from more affordable generic and biosimilar medicines is a potent solution to the rising drug cost problem, usually reducing drug prices by about 80%. Americans saved $253 billion from generic drugs in 2016, alone. But drug companies often try to block or stall generic competition through anticompetitive behaviors. Patent system abuse is at the root of big pharma’s scheme to extend their multi-billion dollar monopolies.
Preventing patent abuse is a market-based, pro-competitive strategy for solving the problem of stifling prescription drug prices. In traditional free markets, prices drop while quality and availability (or in the case of drugs, access) increases. But that is not happening while drug companies abuse the patent system to extend their monopolies. In fact, 75% of all pharmaceutical patents between 2005 and 2015 were issued on old, previously patented medicines, not new drugs. The patent system is supposed to reward true innovation, not the creativity of drug companies’ legal departments.
We agree with Health and Human Services Secretary Alex Azar: “We have to fight gaming in the system by patents and exclusivity agreements.”
FDA Commissioner Scott Gottlieb has similarly called upon brand name drug companies to “end the shenanigans” that prevent competition from generic and biosimilar medicines.
This abuse of our nation’s patent system by big pharma, which some scholars have termed evergreening, attempts to prevent competition indefinitely by finding ways to acquire new patents for older existing medicines. These later patents are often not “new and useful,” as required by the Patent Act, which is why many are later ruled to be invalid. Inter Partes Review (IPR) is an important tool that Congress created as a bipartisan solution to allow the Patent and Trademark Office (“PTO”) to efficiently eliminate those very few bad patents that might have slipped past their examiners. There are many advantages in allowing the PTO to police its own patent-granting decisions: PTO reexamination of granted patents is less expensive, faster, and benefits from the PTO’s greater technical expertise. Although IPR is a useful tool that should be strengthened to confront the growing patent abuse problem, it is currently under attack by big pharma and others with a vested interest in preserving low quality patents.
Our members include the following groups and organizations:
U.S. PIRG, Institute for Liberty, Citizen Outreach, R Street Institute, AHIP, Consumer Action, Lincoln Network, Knowledge Ecology International, Campaign for Sustainable Rx Pricing, Association for Accessible Medicines, Kaiser Permanente, Innovation Defense Fund, Society for Patient Centered Orthopedics, Blue Cross Blue Shield, SEIU and the Niskanen Center. And we are growing!