We Must Let Competition Flourish for the Sake of Both Drug Innovation and Affordability

By Matthew Lane
June 16, 2020 at 5:00 am ET

The drug price policy debate often sounds like we must choose between innovation and access to affordable drugs. But why not both? When properly balanced, the patent system is an important tool to promote innovation while still allowing competition to flourish at the end of their natural life.

Patents are designed to expire. This expiration frees up ideas for future inventors to build upon. It also pushes inventors to keep coming up with new ideas by not allowing them to permanently own old innovations. But inventors should also be rewarded for their contributions to society.

This balance can be challenging, but it is possible and it is especially important in drug development. If we rely too much on a patent system that is too permissive, then we end up with technology hoarding and companies that invest more in maintaining their monopolies on current blockbuster drugs rather than taking the risk to discover new ones.

Yet, some still think that we need to shift the balance heavily in favor of patents. For example, Adam Mossoff, professor at George Mason University Law School, has written that longer patents will help speed the development of coronavirus drugs and that congressional efforts to find ways to ensure access and affordability are equal to theft. But there is little support for these arguments. In fact, much of the evidence shows that corporate manipulations of the patent system threaten to throw off the balance in the opposite direction.

Let’s look at the facts. First, history has clearly shown that patients are suffering without access to affordable medications, partly due to Big Pharma patent abuse that prevents generic competition and lower costs. By gaming the system or utilizing legal loopholes that extend a drug’s monopoly far beyond what Congress intended, some big pharmaceutical companies are able to hold onto extensive monopolies and over-patent their products which keeps drug prices high at the expense of patients and raises insurance premiums for everyone. This has a real effect on pocketbooks. Americans can pay up to 67 times more for drugs than people in other countries.

These problems of high costs haven’t gone away, and the pandemic will make things worse because we have less money to waste overpaying for drugs that should be generic. The system was designed for a 20-year patent term per invention, but some companies are finding ways to keep adding new monopoly terms to their old drug discoveries. That drives up prices.

Second, patents aren’t the only tool for promoting innovation – especially in the drug industry. The U.S. government is the largest public funder of medical research, with the National Institutes of Health spending $41.7 billion annually. Our tax dollars are contributing substantially to coronavirus research as well. For example, public institutions and government funding also helped lead to the current best treatment for COVID-19: Remdesivir.

The public-private partnership is another important tool used to promote the progress of drug discovery. Thinking about how best to use all the tools in the toolbox to meet our innovation and health needs is a good idea. The polio vaccine was famously not patented, and today the disease has almost been entirely eradicated.

Finally, at the end of the day, the need for congressional scrutiny of the patent balance is by Big Pharma’s own making. Just look at Namenda, a drug produced by Forest Laboratories used to treat the confusion associated with Alzheimer’s disease. Rather than compete with a generic drug in 2015, the company changed its formulation from a twice-daily pill to a once-daily version, which extended the product patent to 2029. Or consider one of the top-selling brand drugs, Humira, which treats arthritis and other chronic conditions. It’s been on the market since 2002 and holds over 130 patents in the United States, blocking competition for up to 39 years. Other countries now have access to a far less expensive generic of Humira, while the United States saw another price increase of 7 percent in January. There are many examples like this of competition delayed and without good reason.

The reality is, a well-balanced patent system can provide both innovation and access to affordable drugs. American patients are counting on Congress to take action to make sure that the rewards of the patent system are going to promote innovation rather than to gain additional protections over old drug discoveries. This balance, and the discouraging of abuse, leads to fair prices. Without sensible patent laws, abusers of the system will continue profiteering while patients suffer with limited and expensive choices.

We must let competition flourish for the sake of both innovation and access to affordable drugs.

Matthew Lane is the executive director of the Coalition Against Patent Abuse, a collection of health care providers, consumer groups and other advocates that fights abuses of the drug patent system.

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