Some Observations on Drug Patents – A Response to Arie Michelsohn

By Hans Sauer
March 19, 2018

Dr. Michelsohn’s recent post on this blog takes issue with pharmaceutical patenting practices and urges us to police drug patents more vigorously, perhaps “with a fury,” to ensure that drugmakers receive patent protection only for true innovation. Dr. Michelsohn is particularly concerned about secondary, or follow-on patents, which, he fears, too often claim trivial improvements and wouldn’t be granted if only the USPTO applied the same standards for novelty and nonobviousness that it applies in other technologies.

Nothing in my own experience leads me to believe that the PTO applies a lower anticipation or obviousness standard to pharmaceuticals, and I expect this would be news to my colleagues in the industry too. I do, however, often get questions from policymakers, journalists, and others who have been misinformed and led to believe that pharmaceutical companies are re-patenting old drugs to keep prices high, and that our industry is spending “too much” effort on trivial modifications to old medicines rather than creating new ones. Be assured – there is no such thing as “re-patenting,” and our industry is spending plenty on true innovation – but Dr. Michelsohn is certainly raising a fashionable complaint. Public debate by and large seems to have accepted that any given smartphone model is covered by hundreds of patents, but when a complex pharmaceutical product is covered by more than one patent there’s immediate scrutiny and concern.

One peculiar aspect of working in medicinal chemistry, biological manufacturing, and related areas is that a small change to existing technology can make a big difference. There are patents on molecules where only a couple of atoms are different from prior art compounds, but the resulting molecule is well-tolerated where the prior art molecule is toxic. Or modified formulations where the change of buffer means that the drug has an extended shelf-life at room temperature where the original formulation was unstable and required refrigeration. Such patent claims can look like they’re very close to the prior art, and critics find it tempting to point to those small changes and call them trivial.

Also, peculiar to the pharmaceutical and biotech industries, patentees who want to incorporate such improvements into their existing drugs typically must back up their claims with experimental and clinical studies to meet the requirements of the Food and Drug Administration. In other industries, I suspect, making a small change to an existing product can often be accomplished at correspondingly small cost. But in the biopharma space, implementing a “small” improvement can easily require years of studies and dozens of millions of dollars. This means that drugmakers are likely to make only those product changes that produce a real clinical difference (there are no “nice to have” features in our products). It also means that there is maybe a greater incentive to seek narrow improvement patents that wouldn’t be sought in other industries. It doesn’t mean there’s necessarily anything less inventive about such patents.

Developing a pioneering medicine, from conception to first FDA approval, typically requires close to a decade of basic and applied research and a financial investment exceeding two billion dollars. But innovation does not and cannot just stop once a new drug is launched. Biopharmaceutical companies generally follow up on their initial investment with additional research to improve the clinical usefulness, safety, and effectiveness of new drugs. This makes eminent sense. Whether or not such improvements represent “real” innovation depends on one’s point of view. Critics may deem such advances too trivial to support even narrow patent protection. But what seems trivial to some patent professionals may not be trivial to patients and physicians, who may prefer an improved once-daily drug formulation over the original 3x/day version, or pharmacies who see real benefit in stocking pharmaceuticals with extended shelf-lives compared to predecessor formulations that too often expire before they are dispensed. And patients living with rare diseases may benefit from new treatment options, even if that means using an existing drug in a new way.

Whatever one’s point of view, it is hard to dispute that improvements to pharmaceutical products require sustained investment that, if resulting in additional clinical benefits, should deserve a certain measure of additional reward. To those who view the patents covering such benefits as trivial, I recommend: don’t practice them. There is nothing stopping anyone from developing competing products that don’t embody “trivial” improvements. But I suspect, as Dr. Michelsohn seems to concede by urging “opening-up those trivial modification drug patents for all,” that would-be copyists often view the features protected by such patents as important benefits, and greatly desire to include them in their copy products.

Be that as it may, if pharmaceutical product improvements were really trivial and clinically meaningless, as some critics argue, we wouldn’t be having this debate. Nobody would care. The much more likely explanation for persistent demands to put such improvements into the public domain long before their patent protection expires is that these innovations are important, life-improving, and sometimes life-saving. Let’s at least acknowledge that.

The opinions expressed herein are the author’s, and should not be attributed to BIO or any of its members.

The Author

Hans Sauer

Hans Sauer is Deputy General Counsel and Vice President for Intellectual Property for the Biotechnology Innovation Organization (BIO).

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 10 Comments comments. Join the discussion.

  1. Jonathan Stroud March 19, 2018 10:23 am

    An interesting and well-written piece.

  2. Arie Michelsohn March 19, 2018 10:37 am

    Hans, I do not necessarily disagree with any of your points. But this will be a much more meaningful discussion following the presentation of my examples–which, I would imagine, you, too, would find at least some of which, if not all, represent reprehensible attempts at overpatenting. It is one thing to have several patents covering a drug–and quite another to have 100+ patents, where at least several represent overreaching in light of actual data–and should arguably never have been granted, or at least which are post-grant justifiably invalidated by the PTAB and courts, because they do not–to anyone’s reasonable mind–represent true innovation. We will all be better for having a frank discussion in light of actual facts. I look forward to engaging in such a discussion with you once those facts are on the ground.

  3. Anon March 19, 2018 11:24 am

    Mr. Michelsohn,

    Are you going to supply any of those facts?

  4. Arie Michelsohn March 19, 2018 11:54 am

    Yes, indeed. In detail, forthcoming, soon.

  5. Anon2 March 19, 2018 12:51 pm

    Mr. Michelsohn,

    Will we also be provided information showing why or how “attempts at overpatenting” differ (in magnitude or frequency) in the realm of pharmaceuticals versus any other technology area? or alternatively if the “attempts at overpatenting” are largely similar in all technology areas why anyone would find the patenting behavior “reprehensible” in a particular isolated field of technology rather than simply “reprehensible” in general?

  6. Mr. V March 19, 2018 6:06 pm

    Per Dr. Michelsohn – “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.”

    This is certainly true but fails to mention that Humira, and many other blockbuster drugs are initially developed by, and in-licensed from, academic institutions. As such, the foundational patents claiming the therapeutic are rudimentary and at best, have some preliminary proof-of-concept/animal data in support of the claims. Thus, drug therapies in-licensed from academia often require further investment by the Pharma/Biotech licensee which often requires optimization and reformulation before the drug therapy can be clinically tested in humans. Moreover, and to Hans point, the Pharma/Biotech licensee often doubles down on this investment post-market approval by conducting Phase IV (post-market surveillance) trials which may provide additional motivation for the licensee to reformulate the the therapeutic based on the observations and data collected during phase IV which carries with it more “real world” implications as the patient population isn’t as “controlled” as in the previous clinical phases; patients may be taking other drugs in addition to the one being observed in phase IV.

    While it may be true that in some cases the objective of reformulation is to preserve the market exclusivity of the FDA-approved therapy, this is the minority and should not be extrapolated to entire industry as those in the Drug Price Control lobby would have us believe…

  7. Anon March 20, 2018 8:15 am

    To play the devil’s advocate, I will point out that Mr. Sauer offers more than a few non-sequiturs as a defense to industry practice.

    By this I mean that Mr. Sauer proceeds to use as a defense (against the allegation that obviousness standard is not being applied to Pharma as it may to other tech) several attempts to provide a logical position that, while true in and of itself, is not connected to the charge.

    One peculiar aspect of working in medicinal chemistry, biological manufacturing, and related areas is that a small change to existing technology can make a big difference.

    So what?

    This is a logical non-sequitur because it just does not matter to the legal question to which this idea is being offered. It just does not matter to the legal analysis of obviousness whether or not small changes may lead to big differences.

    In the obviousness analysis, it is instead asked whether the type of change is a type that would have been obvious.

    In other words, the legal argument may be more clearly painted that only the first drug to which a change is added, for example, a change that provides more stability (of a type) or longer shelf life (of a type, e.g., no need for refrigeration) may be a non-obvious combination, but once that type of combination has been made and put into the public arena, that such a type of combination would then be obvious for ALL drugs.

    That at least would be A legal argument.

    This is followed by another non-sequitur: “Also, peculiar to the pharmaceutical and biotech industries, patentees who want to incorporate such improvements into their existing drugs typically must back up their claims with experimental and clinical studies to meet the requirements of the Food and Drug Administration.

    It does not matter to the obviousness legal analysis any such “but, this was difficult to do” type of reasoning. 35 USC 103 still contains the phrase: “Patentability shall not be negated by the manner in which the invention was made.” which in its converse (and recognizing that a converse may at times not be applicable – here though, I would posit that applicability may be warranted) does NOT provide that a manner in which an invention is made provides for a reason to find non-obviousness.

    I have never been a fan of the “but this is special because this is hard and we spent a lot of money” attempts to move the goalposts for the underlying legal analysis. Patent law is (largely, and specifically, here in 103, largely) art-field agnostic.

    ***I will recognize a valid counterpoint that obviousness IS measured by a legal construct (the Person Having Ordinary Skill In The Art), which does mean that there are art-field effects. But those art-field effects may not (or may) be enough to support a mere “we had to spend a lot of time and effort” position. As I have posted in other threads, ALL market participants have to go through the same hurdles, and the hurdles speak more to having actual possession of an invention than it does (perhaps) to the obviousness analysis.

    In other words, just because the end result may be hard and expensive to get to, such would be the same for anyone in the field and that alone does not decide the legal obviousness analysis.

    And because “anyone in the field” would ALSO have to show that same diligence, then the diligence is not a proper differentiator for the legal analysis.

    Yet another non-sequitur: “But what seems trivial to some patent professionals may not be trivial to patients and physicians” This appears to be playing some type of “emotion-card” in that “real world people” are affected by the (putative) obvious improvements. But such has no direct – see caveat above about PHOSITA – bearing on the legal analysis. If the PHOSITA is, for example, a researcher, then a different doctor or pharmacist and the patient have NO bearing at all on the legal analysis of obviousness, and inserting the emotional factor of “real people” is more of a smokescreen and dust kicking TO the legal analysis. No one argues that “real people” may benefit from obvious improvements (even expensive obvious improvements). But that does not “move the needle” on what determines obviousness. Quite in fact, this type of “emotional pandering” supports the “exceptionalism” that appears to be Arie’s position.

    The matter of “needs sustained investment” is also a bit of a non-sequitur, and confuses one benefit (and certainly not the only benefit) of patent protection into being a type of “meets that aspect, so must be granted patent” misnomer. It is also a logical fallacy of switching a “benefit” for some type of “gateway requirement.”

  8. Anon2 March 20, 2018 9:48 am

    Anon @7

    Since Mr. Sauer’s arguments are in response to straw men (to the extent he saw them in the writing to which he was responding), i.e. non-sequiturs themselves, is it possible that in the interests of brevity, he indulged in what look like non-sequiturs but which have some substance, or (as I suspect you believe you have adequately shown) he has simply not directly addressed the failings of the view he opposes with a superior level of legal argument?

    Is it you belief that this a common pitfall with dealing with a straw man, being unwittingly led down an empty straw man ally and having straw man fisticuffs?

    What would have been some more effective direct and brief arguments in your view?

  9. Anon March 20, 2018 10:53 am

    Anon2,

    There is certainly a danger of indulging someone else’s strawmen and coming across with an errant legal view.

    However – I have seen the views provided by Mr. Sauer on other occasions (and “in response” to non-strawmen positions), so my comments geared to the infirmity of those positions advanced should be taken in conjunction with the comments of Mr. Sauer on their face (divorced from any prior strawman or argument to which Mr. Sauer may have been responding to). I respond thusly because I believe that THAT position is more of a non sequitur and lacks substance on its own accord.

    As to directly responding to Mr. Michelson, I have done so both on the prior thread (posts 7, 9, 11, and 13) as well as on his newer thread. So please do not think that just because I may find fault with what Mr. Sauer provides, that I necessarily agree with everything that Mr. Michelson advances.

    I think that I do understand your thrust: I think that you believe that Mr. Sauer was replying to Mr. Michelson, not by deconstructing any weakness (directly) in Mr. Michelson’s views, but by offering an alternative view.

    Such would be a “fair enough” response, but as you may gather, one that I find less than satisfying (for the reasons provided).

  10. Paul Morgan March 20, 2018 5:21 pm

    A multi-function smart phone, with numerous different parts, different functions, and different sets of software, is not a good analogy.

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