Navigating the Dense Patent Thicket and Its Grip on Drug Prices

[1]

The patent system in the United States is intended to promote innovation and serve as the catalyst for creative inventions.[2] Specifically, patent rights have a substantial impact on the prescription drug industry; this impact is on both the development of new drugs as well as the pricing of such drugs.[3] Patents are desired by innovators because they give the patent holder “exclusivity” of their work.[4] This creates a “temporary monopoly” on the invention, which grants the patent holder an exclusionary right to prevent others from “mak[ing], us[ing], sell[ing], or import[ing]” their product during a certain period.[5]

Unfortunately, the prices of prescription drugs have risen a substantial amount in recent years.[6] This has led to widespread, bipartisan criticism of the pharmaceutical industry due to these soaring prescription drug prices.[7] President Biden addressed the issue in his most recent State of the Union speech, where he promised the nation he would act against this excessive pricing.[8]

The United States sells the highest-costing drugs in the world, with one-in-four Americans being unable to afford to take their medications as prescribed.[9] A consumer group national report blames the pharmaceutical industry and their alleged “abuse on the patent system” for these extremely high prices of prescription drugs.[10] Specifically, the report focuses on the use of a strategy called “patent thicketing,” a strategy which prevents generic drugs from entering the market.[11] “Patent thickets” occur when drug manufacturers seek to extend the life of their monopolized patent by pursuing numerous additional patents on the already existing product.[12] This “patent thicket” then surrounds the product.[13] The result is a thicket made up of overlapping intellectual property rights that effectively lengthens the life of the temporary exclusivity granted by the patent.[14]

When a patent monopoly exists, similar generic drugs that incorporate the patented subject matter are unable to enter the market until the exclusivity expires.[15] Once the generic drugs are successfully introduced into the market, the original product’s price naturally falls due to the generic product’s discounted cost; the first generic product usually enters the market at a 20-30% discount.[16] In this coming decade, seven out of the ten top-selling drugs in America have patents set to expire, which could alter the drug market prices substantially if the patents on these top-selling drugs do not get extended by a drug company’s pursuit of a patent thicket.[17]

Efforts to mitigate patent thickets to reduce pricing, however, must also seek to maintain genuine pharmaceutical innovation.[18] It is debated whether patent thicketing is preventing pharmaceutical creation from taking place, or if it is simply a natural symptom of the United States patent landscape.[19] Despite the presence of patent thickets, innovation is still occurring, as evidenced by the Center for Drug Evaluation and Research’s approval of almost fifty “novel drugs” in 2019.[20] Those who defend this patenting practice argue that patent laws incentivize the protection of innovation, and the patent thicket strategy is a legitimate strategy that acts in accordance with existing law.[21] Although some may take issue with the excessive control pharmaceutical giants maintain over the drug market, Sir Isaac Newton did famously state that scientists’ work depends on “stand[ing] on the shoulders of giants[.]”[22]

References: [1] Ksenia Yakovleva, The Medicine (photograph), in pxhere.com (Oct. 24, 2022), https://pxhere.com/en/photo/1666286. [2] Tahir Amin & David Mitchell, Big Pharma’s Patent Abuses Are Fueling the Drug Pricing Crisis, TIME (Feb. 24, 2023, 7:00 AM), https://time.com/6257866/big-pharma-patent-abuse-drug-pricing-crisis/ (describing history, original design, and purpose of U.S. patent system as means to promote ingenuity). [3] Megan Fuller, Note, A Survey of Three Patent-Based Approaches That May Play a Role in Drug Prices, 18 Ind. Health L. Rev. 397, 397 (2021) (stating exclusive rights allow patent holders to recoup money spent on research and acts as reward for innovation). [4] Id. [5] See id; 35 U.S.C. § 271 (2018). [6]Veronica Salib, How Pharmaceutical Patents Contribute to Increased Drug Costs, PharmaNewsIntelligence (Aug. 16, 2022), https://pharmanewsintel.com/features/how-pharmaceutical-patents-contribute-to-increased-drug-costs (noting soaring drug prices in recent years). See also Amin & Mitchell, supra note 2. [7]Amin & Mitchell, supra note 2. [8]Id. (expressing emergence of bipartisan support in Congress to lower drug prices); see e.g., Blake Brittain, U.S. Senators Ask Regulators to Clear Drug Patent ‘Thickets’, Reuters (June 8, 2022, 8:43 PM), https://www.reuters.com/legal/litigation/us-senators-ask-regulators-clear-drug-patent-thickets-2022-06-08/ (describing letter written by six bipartisan U.S. senators requesting U.S. Patent and Trademark Office combat patent thickets). [9] Amin & Mitchell, supra note 2 (describing U.S. pricing conditions and dire implications for patients). [10]Ahmed Aboulenein, Consumer Group Says Drugmakers Abuse U.S. Patent System to Keep Prices High, Reuters (Sept. 16, 2022, 2:08 PM), https://www.reuters.com/business/healthcare-pharmaceuticals/consumer-group-says-drugmakers-abuse-us-patent-system-keep-prices-high-2022-09-16/ (noting abuse of U.S. patent system can stifle competition and inflate prices). [11] Id. (defining “patent thicket” strategy and its effect on generic competition). [12] Fuller, supra note 3, at 399 (explaining “patent thicket” dynamics). [13] SeeCharlotte Geaghan-Breiner, The Patent Trap: The Struggle for Competition and Affordability in the Field of Biologic Drugs, 54 Colum. J.L. & Soc. Probs. 589, 592 (2021) (explaining pharmaceutical patent thickets act as “dense web of overlapping patents” that ”effectively deter competition from biosimilars”). [14] Id. [15]Amin & Mitchell, supra note 2 (stating patent thickets allow drugmakers to extend monopolies and block lower-priced competitors from entering market). [16] Fuller, supra note 3 at 398 (noting that with expiration of patent’s exclusivity, generic drugs enter into market, driving down pricing). [17] See Amin & Mitchell, supra note 2 (projecting potential changes to current patent monopolies). [18] Kevin J. Hickey et al., Cong. Rsch. Serv., R45666, Drug Pricing and Pharmaceutical Patenting Practices 27 (2019), https://sgp.fas.org/crs/misc/R46221.pdf (defining patent thickets as well as debate surrounding them). [19] Id. [20] Fuller, supra note 3, at 410 (describing example of rapid and successful drug innovation in scientific field). [21] Hickey, supra note 18, at 27 (stating that drug makers may argue they are simply acting in accordance with existing law and that patent thickets are legitimate method to protect innovation). [22]Fuller, supra note 3, at 410.