The Senate began its confirmation hearing last week for President Biden’s nominee to head the U.S. Patent and Trademark Office (USPTO), intellectual property attorney Kathi Vidal.
While this is one of the more obscure U.S. agencies, it is pivotal in influencing the U.S. health system — from global vaccine equity to the country’s drug pricing crisis. The latter issue touches the lives of the two-thirds of Americans who rely on pharmaceuticals for everything from controlling blood pressure to battling cancer, few of whom know that, as head of the Patent and Trademark Office, Vidal would oversee a system that is being gamed to line the pockets of pharmaceutical companies at the expense of patients.
The consequences of out-of-control pharmaceutical pricing are not just economic, but human: 1 in 7 Americans have lost a loved one in the past five years because they could not afford their medical treatment. That figure is double for people of color.
After decades of inaction, it is promising that legislators are finally recognizing the link between patents and the exorbitant cost of drugs in the U.S. — the highest of any wealthy country. We have worked at the intersection of the patent system and health for more than two decades, and it’s clear to us that the drug-pricing problem in the U.S. is actually a patent problem — one Vidal could take the lead on solving as head of the agency that issues them.
Under our current system, drug makers are egregiously gaming the USPTO in ways that are inconsistent with its original intent.
Companies play a numbers game — they’ve built into their business plans the strategy that requesting multiple patents can delay competition and increase their rate of return. They’re throwing patent applications at the wall to see what sticks. It’s a system that rewards cunning, not genuine invention, no matter what the pharmaceutical industry endlessly markets in the media as innovation.
Pharmaceutical companies are able to get patents — which can represent 20-year monopolies — for things that are not inventive; converting a medication from a liquid to a tablet, or patenting every possible naturally occurring chemical form that is already inherent in the main patented compound.
Take Imbruvica, a cancer drug from AbbVie, which came up as part of a congressional hearing earlier this year at which our organization, I-MAK, testified. Since Imbruvica’s launch six years ago, it has been a blockbuster, generating more than $15 billion for AbbVie and $6 billion for its marketing partner, Johnson & Johnson, in the U.S. alone. The price of the drug has also skyrocketed, increasing 57% from its initial price to an annual cost of $181,000 per patient. Our organization’s research finds that AbbVie has filed 165 patent applications and counting on Imbruvica, and the USPTO has granted more than half of them. This gaming of the system has extended Imbruvica’s market monopoly for nine years at an estimated cost to Americans of $41 billion.
These extra patents include, for example, naturally occurring crystalline forms of Imbruvica, which are inherent in AbbVie’s already patented main compound, and which have the exact same biological properties. Imagine having a monopoly on water and going to the patent office after the first cold snap, saying you’ve now discovered ice and extending your hand to collect your windfall profits. This is exactly what AbbVie is doing when it filed patents for crystalline forms of the drug.
In an equitable world, actions like these would be immoral and unethical. But in the U.S., companies are operating this way legally — and they are applauded for it. We need to change the systems that not only allow such action but incentivize it. The responsibility to rein in this behavior and create change ultimately rests with the Patent and Trademark Office — along with Congress.
Vidal has the opportunity to end behavior like AbbVie’s and meaningfully balance the rights of private actors and the rights of the public by working in tandem with Congress to understand which reforms will have the biggest impact on stopping patent abuse. To bring down drug prices and build a more equitable system, the Patent and Trademark Office director and Congress must understand that real change requires the commitment and collaboration of both entities. The new director has the power to shift the culture of the Patent and Trademark Office and rewrite some existing rules, and Congress needs to act decisively to change many of the structural issues that have led to friction and dysfunction in the current system.
During her hearing, Vidal seemed to acknowledge an assertion from Sen. Patrick Leahy (D-Vt.) that patent abuse contributes to high drug prices, referring to some drug companies obtaining patents on marginal improvements. While this is an important acknowledgement, we must stress that patent abuse is not done only by a few bad actors in the industry — it is endemic. We will be watching to see how the USPTO and Vidal respond to a September 2021 letter from acting FDA Commissioner Janet Woodcock the USPTO director that patent abuse is contributing to high drug prices and what she will do about it. The jury is still out on that.
It was also promising to hear Vidal recognize that the USPTO’s Patent Trial and Appeal Board is not working as intended and that cases should be instituted even if there are parallel proceedings on the same patent in court.
If confirmed, Vidal could also help ensure that the input of patients and advocates is given as much weight as input from the pharmaceutical industry. Our organization has just released a Public Participation Blueprint based on a series of literature reviews, interviews, and the conclusions of a diverse focus group to identify potential policy options for ways to integrate public voices into the patent system. Adopting recommendations from the blueprint would mark a sorely needed first step toward democratizing the Patent and Trademark Office to consider the everyday Americans who are harmed most by monopolies, instead of continuing on with its history of understanding its “customer” to be private companies and their interests.
The drug-pricing crisis in the U.S. and its origins in the patent system expose larger issues: Over the last 40 years, special interests have been allowed to engineer financial systems to work for the benefit of the few at the expense of the many. It’s left the country with a massive chasm between the haves and the have-nots, which the pandemic has only widened. To rebalance priorities, lawmakers and others need to overhaul the structures of the U.S. economy, starting with its patent system.
If confirmed, Vidal will be presented with the choice of upholding the status quo of protecting business over consumers or driving meaningful progress toward equity in one of the most important — but often overlooked — U.S. government agencies.
Tahir Amin and Priti Krishtel are founders and executive directors of I-MAK, the Initiative for Medicines, Access & Knowledge, a nonprofit organization working to address structural inequities in how medicines are developed and distributed.
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