This is because since the 1980s, the timing of market entry for generic and biosimilar drugs has essentially depended on judicial determinations of patent infringement, validity, and enforceability, pursuant to the Drug Price Competition and Patent Term Restoration Act (better known as the “Hatch-Waxman Act”), and more recently, the Biologic Price Competition and Innovation Act (“BPCIA”).
If we are really going to have an informed discussion about drug pricing, therefore, we had better do it by talking about drug patents—and how to police them, effectively.
As drug prices skyrocket and cause massive public uproar, the essential question in every drug-patent case, is this: Has the drug-patent owner fulfilled the patent bargain with America? Is the drug-patent owner a real innovator, entitled to a multi-year bounty of an exclusive market worth billions of dollars per year?
Drug patents are the essential measure of how much value branded pharmaceutical companies bring to the bedside of American patients and consumers. Within the arcane details of their specifications and patent claims are the innovative discoveries brought to us by the inventors, described in sufficient detail that anyone of ordinary skill in the medical arts can practice them successfully—or not.
Only when true innovation is captured in the pages and claims of a patent, is a patent owner entitled to a bounty for the efforts expended in bringing the innovation about. This can be achieved in a variety of ways, such as by licensing the patent for a royalty, or trading it for something else of value, or—as is generally the case in the market for medicines—keeping the market closed to competition, and charging monopoly pricing during the term of the patents that claim those medicines.
Humira, AbbVie’s best-selling drug to treat arthritis, for example, has annual sales of about $16 billion. AbbVie’s CEO has touted its 100+ patents to protect the drug franchise.
If a drug company plants a more than 100-patent thicket to protect market exclusivity, then it had better be able to justify why it should deserve the cumulative protection of patent term. Yes, the patent on the original formulation will fall into the public domain and may be capable of being made by generics long before the last of the patents expire, but often-times those follow on “innovations” are the kind of trivial advances that ordinarily shouldn’t support a fresh patent.
Real scrutiny needs to be placed on follow-on patents, and demonstration of real innovation should be required to warrant keeping new formulations or dosing regimens of a previously-existing drug locked-up by a patentee. If the same quantum of proof for novelty and nonobviousness that is required elsewhere in the Patent Office were to be applied to drug patents, many fewer follow-on drug patents would be granted.
The chemical arts have a long history of being considered more “unpredictable” than the mechanical and electrical arts. But in our modern world of molecular spectroscopy, computational chemistry, and designer-genes, the science of drug development—while highly sophisticated and complex—is not so nearly as filled with hopeless uncertainty and unpredictability as some would-be drug-patent owners would have everyone believe.
Furthermore, adjudicating 100 patents is a significant burden on our Justice system, and that is just for one drug. If we are going to put our Article I and III courts on the line for American healthcare, we should expect to see raving reviews from the decisions in drug-patent cases, lauding all the marvelous and heroic innovations that the asserted patents represent. And sometimes, we do.
And sometimes we don’t. It is when drugs are patented without the heroics of real innovation that is the problem, and why drug prices remain artificially high.
Rather than representing true innovation, we find drug patents that emerge through loopholes in our drug-patent system, which artificially extend patent term on rather trivial differences over the original drug. This, in turn, unjustly blocks competition for trivially-modified formulations of drugs or methods of using them that are barely innovative and should be available to generic and biosimilar companies for approval by the FDA. It goes without saying, opening-up those trivial-modification drug patents for all would improve healthcare by allowing a variety of market alternatives for their claimed formulations and uses to be available in generic and biosimilar forms, which would make healthcare more affordable for everyone.
In the coming days I will publish a series of examples to illustrate my concerns. Up first will be a closer look at AbbVie’s blockbuster drug, Humira.