Last month, members of the House blocked a bipartisan proposal to require that pharmaceutical companies disclose drug prices in their TV ads. The failure of even this very modest step towards transparent drug pricing shows just what Americans are up against in the struggle to access affordable medicines.
What is transparent is that an overwhelming majority of Americans say the cost of prescription drugs is unreasonable. Voters this year have said that lowering drug prices should be a top priority for Congress. But over 100 days have passed since President Donald Trump issued his blueprint to lower costs, and instead of lower bills at the pharmacy, Americans are mostly getting a lot of finger pointing and public shaming. They maintain that no one in Washington is doing enough.
TV ads are one thing, but to bring meaningful transparency to drug prices and lower costs, we have to start talking about a root cause of our pricing crisis: overpatenting.
Under U.S. law, the intended duration of a patent is 20 years. The patent system is designed to encourage drugmakers to invent new medicines for which there is robust commercial demand and reward them with twenty years of market exclusivity.
The problem is, drug companies have found a way to distort the system, turning patents into tools for blocking competition from more affordable generic alternatives, rather than for inventions. By filing hundreds of patents on today’s most popular drugs, pharmaceutical companies are stretching monopolies well beyond their lawful limits, setting prices however they choose.
Take, for example, the drug Humira. Widely used by older Americans to treat arthritis and inflammatory disease, Humira is the world’s No. 1-selling drug: It grossed $18 billion in global sales last year. In 2016, Medicare and Medicaid spent a combined total of $3.3 billion dollars on Humira; that’s an average of $32,847 per beneficiary, or $2,835 per person per month.
But as I-MAK’s newly released report shows, a low-cost generic option for Humira is unlikely to be available for years, due in part to the large volume of patent applications filed by the drug’s maker. AbbVie Inc. has filed 247 patent applications for Humira, and nearly 90 percent of them were filed after the drug was approved by the Food and Drug Administration in 2002. In fact, half of the total patents for Humira were filed in just the last four years alone. Meanwhile, AbbVie increased the price of Humira 18 percent per year from 2012-2016, causing the average Humira spending per dosage by Medicare and Medicaid to nearly double in that time.
AbbVie is not alone in these abusive patenting and pricing practices. Last month, I-MAK examined the 12 top-selling drugs in America (including Humira) and found a widespread trend. An average of 125 patent applications have been filed on each of America’s best-selling drugs, and even though many of these medicines have been on the market for over a decade, the average price of these best-selling drugs has gone up 68% since 2012, with only one drug dropping in price.
Lyrica, one of Pfizer’s top-selling neuropathic pain medications, was recently issued patents for an additional 20-year period just because it issued a controlled-release formulation (Lyrica CR) that turns two or three daily pills into one. The pharmaceutical industry will tell you that a single pill is useful for patient compliance, and so it is an improvement and deserves a patent. But developing a single pill for a drug for the purpose of patient compliance has been common practice for years. There is nothing inventive about it.
Significant policy reform is needed to curb these patent abuses, restore free market competition and give consumers a choice. It starts with Congress holding public hearings on the impact of overpatenting on patients and drug prices. Ultimately, we need to prevent drugmakers from abusing the patent system as a defensive strategy that prevents generic competition. When two or more generic suppliers compete to reduce the price of a medicine, prescription drug prices can be lowered by more than half.
It’s no wonder drugmakers don’t want to flash their ever-shifting price tags on TV. Protected by fortresses of patents that provide decades of monopoly power and pricing control, drug companies are exploiting America’s strained public health care budgets and undermining the financial well-being and health of individuals and families across the country.
Tahir Amin is the co-founder and co-executive director of I-MAK.org, a global nonprofit organization of attorneys, scientists and health experts who have worked to lower drug prices for 15 years.
Morning Consult welcomes op-ed submissions on policy, politics and business strategy in our coverage areas. Updated submission guidelines can be found here.