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In principle, pharmaceutical companies should make their money by developing new drugs that improve patient treatment and cure disease. This process, however, is time-consuming, expensive, and filled with uncertainty. All things that CEOs and investors hate. They want to guarantee big profits year after year, and have figured out how to do just that by manipulating their patents. The U.S. patent system is a wonderful creation. It is supposed to encourage innovation by providing a 20-year window for a company that owns the invention to commercialize it without copycat competition. But drug companies have found a way to exploit our patent system by extending the high prices and profit lifespans of their existing highly profitable drugs. They pile up dozens of patents on minor tweaks that create “patent thickets” to keep prices high and competitors out, way beyond the original intent. These add-on patents can be as minor as a new way to distribute the drug or a minor improvement to dosing or packaging or manufacturing or even flavor. As a result, one in four Americans cannot afford the medicines they need, or must opt for less effective but lower-priced alternatives directed by their insurance companies. Seniors frequently must delay taking their medicines until they receive their next social security check. Drug makers would have you believe that they need these monopolies and high prices to develop new life-saving drugs, but it is more profitable for them to employ reams of patent lawyers to extend the monopolies on their existing blockbusters than to invent new drugs. As Time Magazine recently wrote: “A recent national report reveals that, on average, there are 140 patents filed and 74 patents granted on each of America’s 10 top-selling drugs. Sixty-six percent of these patent applications were filed after FDA approval – many for very minor product modifications.” “Each additional day of patent exclusivity can mean tens of millions of dollars in revenue for a single drug: Revlimid and Keytruda, which treat cancer, earn $23.8 million and $26.8 million per day respectively; and Humira, which treats debilitating arthritis, was bringing in $47.5 million per day before the first competitor entered the market...” The Inflation Reduction Act did begin to address high drug prices by requiring companies to negotiate with Medicare for seniors, but the law only goes into effect in 2024 and only for 10 drugs in that first year. Largely Republican opposition and big pharma lobbying prevented a more comprehensive approach that would affect more patients and more drugs. That is why our patent system still needs fundamental reform. As Time Magazine states, “Congress must stand up to drugmakers’ deceptive, anti-competitive tactics and return the patent system to its original intent: an engine for breakthrough discoveries that benefit all Americans—not a vehicle to secure unprecedented profits for a few powerful corporations.” There are specific reforms that could be implemented with bipartisan support, like making it less costly to challenge flawed patents. Otherwise, we will continue to pay many times more for the same drugs than do other countries that have patent laws that represent a balance between corporate profits and the public interest. For a deeper explanation of the problem, read the Time Magazine article here.
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