Drug companies abuse the patent system

The new year could mean a new era of more affordable medications in Iowa and across the United States — if Congress passes legislation preventing drug companies from gaming our patent system. More than 80% of voters across party lines want federal agencies to encourage prescription drug competition. Sen. Chuck Grassley has worked across the aisle for years to mend this broken system. This January, we need Sen. Grassley and other Iowans in Congress to pass decisive patent reforms through the U.S. Senate and House.

Pharmaceutical companies have mastered the dark art of amassing “secondary” patents on existing products, thereby creating "patent thickets” keeping new drugs from the market. Brand-name drugmakers make minor changes (i.e. dosage amount or pill shape), then apply for secondary patents justified by those changes. When it works, basically the same medicine gets additional patent protections.

The U.S. Patent and Trademark Office (USPTO) intends for patents to expire after 20 years so market competition can resume. When competitors enter the pharmaceutical market, prices drop almost 40%. However, patent thickets extend the average monopoly of top-selling drugs to 41 years. The looming threat of legal action for infringement then thwarts competitors’ attempts to sell their versions. Lack of competition means oft-exorbitant prices for medicines that improve Iowans’ quality of life — or keep them alive.

Many Iowans suffer from conditions that require ongoing medication. Iowa has a “significantly higher” rate of new lung cancer cases than the national average. Twenty five percent of Iowans — more than 600,000 adults — have diagnosed arthritis. Yet prices for crucial treatments are skyrocketing. In 2020, the lung cancer drug Keytruda cost Medicare patients $59,642 a year, more than 80% of the median income for an Iowan home. Prices for the arthritis drugs Enbrel and Humira have increased by 617% and 500% respectively since launch.

Brand-name drugs comprise only 8% of prescriptions, but cost 84% of the money Americans spend on medicine. The cure is more access to generic and biosimilar drugs. They save money for patients, health insurance companies, employers and taxpayer-funded programs including Medicaid and Medicare.

In 2021, the 10 bestselling U.S. drugs boasted 74 approved patents, on average, thwarting competition. Generic and biosimilar drugmakers that challenge patents in court win about 73% of the cases. But few upstart companies bother with these lawsuits. They cost a median of $2.5 million dollars in 2019 and take a long time to resolve. We shouldn’t have to hope that litigation rights any wrongs. Instead, the USPTO needs to stop approving patents without strong justification.

With a handful of important health care spending packages under consideration this January, Congress can create a lasting answer to patent thickets, product-hopping and pay-for-delay schemes. Sen. Grassley can help lead that charge. Congress should stop pharmaceutical companies from abusing our patent system to keep drug prices high. New patent rules can help all Iowans and Americans.

Patricia Kelmar directs the health care campaign work for U.S. PIRG and provides support to our state offices for state-based health initiatives.