A rare point of consensus following the midterm elections is that Americans are adamant about lowering drug prices. Bipartisan pledges to seek common ground on this vexing issue suggest we might finally see action to make medicines more affordable.
What should this new common ground look like? Beyond important proposals like allowing drug importation or Medicare negotiation, policymakers should take a hard look at one of the key factors affecting market competition, transparency, and affordability: patents.
Patent abuse by drug makers is one of the most influential drivers of our pricing problem. U.S. law provides 20 years of patent exclusivity for inventions such as a new medicine — meaning two decades that a drug maker has monopoly power to develop a medicine and set prices however they wish. Even if it takes eight years to develop a medicine, that leaves 12 years for the drug to have market exclusivity.
While rewarding invention is important, under the U.S. patent system those rewards have become inflated and unmerited as drug makers have developed defensive strategies that include overly broad patent claims and filing large numbers of follow-on or secondary patents to extend their monopolies. Patients are paying the price.
Diabetes provides a good snapshot of the problem. Approximately 7 million Americans rely on insulin to live. Surging insulin prices have gotten so out of hand that 1 in 4 Americans are rationing their own treatment, putting their lives in jeopardy and, in some cases, dying.
Without insurance, one five-pen carton of Lantus Solostar costs $280 at all major pharmacies in the U.S. The exact same branded — not generic — package costs about $50 in a leading diabetes clinic in Mexico.
Lantus, made by Sanofi (SNY), is the leading drug for people with type 1 diabetes. The company makes $15 million every day selling this type of insulin.
As shown in a new report from I-MAK, the organization I help direct, the price of Lantus jumped 18 percent each year from 2012-2016. During that time, U.S. taxpayers bought more than $22 billion worth of Lantus through Medicare and Medicaid. In fact, Lantus ranked number two for total overall expenditure in 2016 for both Medicare and Medicaid.
Lantus is also highly overpatented. Though Sanofi’s primary patents on Lantus expired in 2015, the company has filed 70 secondary patent applications in the U.S. — 95 percent of its total — since the drug was first approved and put on the market in 2000. If granted, these additional patents would give Sanofi monopoly protection for up to 37 more years — almost double the duration provided under U.S. law.
Why would a pharmaceutical company file so many patents after a drug is already on the market? Quite simply to preserve and extend its ability to keep competition at bay while hiking prices.
The company — which along with Eli Lilly and Novo Nordisk (NVO) control nearly the entire U.S. insulin market — has further prevented insulin competition in America by pursuing litigation against two companies that want to offer cheaper biosimilars. (Biosimilars are the generic-like equivalents for complex molecules such as insulin and other biologic drugs.) Like overpatenting, this tactic works against the millions of Americans who must take insulin.
Putting two or more generics on the market has been shown to drastically reduce drug prices. In Europe and Japan, fewer patent applications and more friendly biosimilar regulatory requirements have led to multiple biosimilar competitors of Lantus, helping drive down prices and improve access to treatment.
Gestures like Sanofi’s recently expanded patient assistance programs offer savings to struggling patients. But Americans in need of treatment should not have to jump through hoops for medicine that ought to be affordable in the first place. Put another way, “I shouldn’t have to go beg for my insulin. It should be affordable to me,” Myranda Pierce, a graduate student at Boston University School of Medicine who has type 1 diabetes, told STAT.
Unfortunately, the mix of patent thickets, prolonged exclusivity, delayed competition, and jacked-up prices is typical of America’s best-selling medications. Overpatenting is so pervasive that a new report from the bipartisan Congressional Diabetes Caucus calls for outlawing “evergreening,” and also proposes other patent reforms because such practices block competition and prevent affordable generics from reaching Americans.
To get patent reform right, policymakers should not only stop evergreening and pay-for-delay agreements that keep generic alternatives off the market. They must also remember what’s at the core of a patent: invention. To deserve the title “patent” — and the reward of exclusivity that comes with it — a discovery must be truly inventive, not just an incremental improvement.
Unfortunately, the current patent system too often forgets the inventive part of patent law and hands out 20-year monopolies for “improvements” based on routinely practiced science — whether that’s putting three pills into one pill to improve adherence or making a slight adjustment to the dosage formulation, as Sanofi claimed in one of its later patents on Lantus. To provide real incentives to help companies usher in the next medical breakthroughs, we need to raise the bar for what is deemed inventive under patent law. If we don’t, we should no longer call it a patent system but a monopoly-handout-in-return-for-an-investment system.
As cited in the I-MAK report on Lantus, Erin Little, an entrepreneur in Kansas City, Mo., told T1International, “No one I know can afford this drug without assistance, and patient assistance programs, if you even qualify, eventually run out. I had to pay $1,000 for a month’s supply of Lantus before I found a way to get the same version in Mexico for just $100. It’s not right. Drug companies are squeezing us for every possible penny. It’s forcing people to ration drugs and putting lives at risk.”
Americans deserve better. That’s why Minnesota’s attorney general recently sued the big three insulin makers for price gouging the U.S., why the American Medical Association has called for federal interventions on insulin pricing, and why there’s a lot riding on the next Congress to rein in rising drug costs.
As part of the solution, patent reform can help boost competition and transparency and stop companies from dictating sticker-shock prices. There are too many stories of agonized patients struggling to afford treatment, forced to ration their medicine, and left to absorb the cost of high drug prices with their very own bodies.
Tahir Amin is the co-founder and co-executive director of I-MAK.org, a global nonprofit organization that works to lower drug prices.