Earlier this month, President Biden signed an Executive Order to spur competition and promote the interests of workers, businesses, and consumers. Among the 72 actions, several focused on addressing high drug prices.
Between 2016 and 2020, the price of branded prescription drugs increased by 36 percent; nearly four times the rate of inflation. Around 58 million Americans — roughly the population of Florida and Texas combined — report being unable to pay for medication at least one time in the last 12 months. And in the last five years, 34 million Americans lost a loved one because they couldn’t afford treatment.
Our outdated patent system is the root of this problem. My organization, I-MAK, investigated the 12 best-selling drugs in America and found, on average, there are 131 patents filed on each medicine with 38 years of attempted patent protection blocking competition. The average price increased 71 percent, nearly nine times the rate of inflation. Our most recent investigation on Keytruda — soon to be the top-grossing drug in the world — exposed a patent wall that will cost payers and taxpayers $137 billion during its eight extra years of exclusivity.
With no competition, companies set whatever price they want — and consumers have no choice but to pay.
One important action from the President’s executive order, is that the Food and Drug Administration (FDA) must identify how the current patent system “unjustifiably delay(s) generic drug and biosimilar competition“ and notify the PTO. But that is only if the FDA asks the right questions. With this new opportunity to jumpstart the modernization of our patent system to meet the realities of a 21st-century society, here are our recommendations for what the FDA should include in their letter to the PTO.
First, the FDA should highlight that when it approves generic drugs, there is significant delay in getting to market due to lengthy and expensive patent disputes. These disputes arise because there are so many patents on a single product — branded companies file dozens or even hundreds of patents. For drugmakers, it’s well worth the $25,000 investment to file and maintain a patent to delay competition. These delays are costing taxpayers hundreds of millions of dollars while further padding the pockets of drugmakers. It is long past time to raise the bar and put a stop to this patent system manipulation directly affecting competition.
Second, the FDA should identify where existing laws can be revamped to balance competition and affordability. The Biologics Price Competition and Innovation Act needs changes to adjust for how patent litigation around biologic drugs plays out in practice. There is limited transparency around the patents companies hold, and this is a major barrier to biosimilar companies litigating and entering the market.
Third, President Biden is making clear that he is committed to changing how the past 40 years have allowed giant corporations to accumulate too much power at the expense of the American people. The FDA should lift up the Hatch Waxman Act of 1984 — which created today’s generic market and extended the length of drug patent monopolies — as an example of economic policy that is not serving its intended purpose. Over time branded companies have gamed the system by filing for as many patents as possible on a given drug product, lengthening their monopolies and keeping drug prices high. Research shows that two-thirds of drug patents are invalidated when challenged.
Lastly, we need public participation. The patent system is a two-way conversation between the PTO and industry. You and I aren’t invited to that party. The FDA engages regularly with the public to consider input in their processes, but not the PTO. For example, public interest groups are excluded because patent challenges are prohibitively expensive. The current structure includes a cost-prohibitive filing fee for challenges that can be more than $41,500 per patent, a much higher rate than in Europe. That financial barrier unfairly prioritizes the interests of corporations, and closes one of the only avenues to creating equity in the market.
Americans should have the right to participate in systems that directly affect our health and lives.
As the daughter of a pharmaceutical scientist, I know first-hand how the patent system touches lives. Growing up, we had framed patents on the wall of our house from my father’s inventions, and I know that my family’s opportunities existed because America rewarded the ingenuity of people like him. As a patient advocate for nearly 20 years, I’ve witnessed the powerful transformation that happens for patients and families when they are able to afford medicines. The patent system has strayed from its original vision. With some common-sense reforms, we can create a more modern, responsive, and democratic patent system; one that incentivizes real progress that all people, even the most vulnerable, can benefit from. Now that would be in the interests of consumers.
Priti Krishtel (@pritikrishtel) is a founder and an executive director of the Initiative for Medicines, Access & Knowledge (I-MAK), a nonprofit organization working to address structural inequities in how medicines are developed and distributed. She participated in Engine’s Patent Quality Week as part of an effort to encourage conversations on the impact of patent quality on startups and small businesses around the country.