First-Ever U.S. Patent Challenges Dispute Gilead’s Monopoly on Hepatitis C Drugs that Blocks Millions from Treatment

Press Release 25 Oct 2017

“The market for medicines isn’t working”

Independent team of intellectual property lawyers, scientists
and health experts file public interest challenges arguing
sofosbuvir patents are obvious and unmerited
New white paper from I-MAK details how pharmaceutical patent abuse
is driving up the cost of America’s most expensive
and widely used prescription drugs

NEW YORK – As voters demand that Congress take action to lower prescription drug prices, pharmaceutical corporation Gilead Sciences (NASDAQ:GILD) has obtained unmerited patents for hepatitis C medicine sofosbuvir, blocking millions in the U.S. from affordable treatment, says U.S.-based nonprofit Initiative for Medicines, Access & Knowledge (I-MAK). I-MAK today filed the first-ever U.S. patent challenges against sofosbuvir, the backbone of Sovaldi®, Harvoni® and Epclusa®, arguing that the drug’s six core patents do not meet the legal standards for novelty and non-obviousness. I-MAK is also putting a spotlight on the pharmaceutical industry’s widespread patent abuse in a new white paper that finds unmerited patents and other strategies to delay competition used by the industry on three major cancer and hepatitis C drugs will cause more than $55 billion in excess costs to payers and taxpayers.

Today, the hepatitis C infection rate sits at an all-time high with the opioid epidemic accelerating transmission. There are 3.5 million people with hepatitis C in the U.S., and more than 85 percent of Americans diagnosed with chronic hepatitis C will not receive treatment this year.

Baby boomers, Medicaid recipients, veterans and people in prison are among those hit the hardest by the disease. Insurance providers and state health programs have been forced to ration treatment to the sickest patients due to the high cost. Meanwhile, in three and a half years, Gilead has made more than $35 billion on sales of its hepatitis C drugs in the U.S. alone. I-MAK’s estimates found it would cost more than $100 billion to treat everyone who could benefit.

“The market for medicines isn’t working. Drug companies are abusing the patent system to block millions of Americans from getting treatment and keep prices artificially high,” said Tahir Amin, co-founder and co-executive director at I-MAK. “These Gilead patents simply don’t meet the legal standard of being novel and non-obvious. Unmerited patents are a root cause of high drug prices and deserve much closer scrutiny. Removing these unmerited patents will allow more affordable generic drugs to be introduced much sooner, saving lives and saving taxpayers billions of dollars.”

Too often, pharmaceutical drug patents fail to meet the standards of U.S. law. Under the law, companies must prove that the product is novel and non-obvious. As I-MAK’s decades of research and investigations have found, unmerited patents are a root driver of the unaffordable drug prices plaguing patients and taxpayers. Every week, the U.S. patent office grants 6,000 new patents – and some of those are not merited. Pharmaceutical corporations are over-patenting drugs even when there is no new science that justifies their exclusivity and are stacking up as many unmerited patents as possible to prolong their monopolies and block cheaper generics from entering the market.

I-MAK today filed an unprecedented set of patent challenges with the U.S. Patent Trial and Appeal Board against six different patents used to create sofosbuvir. By reviewing evidence that the U.S. Patent and Trademark Office never considered, I-MAK has found that sofosbuvir was developed through obvious tweaks to existing compounds and formulations commonly used in older HIV and cancer drugs. If Gilead’s six core patents for sofosbuvir are ruled unmerited, U.S. taxpayers will save $10 billion and generics can get to market 14 years faster.

I-MAK’s challenges to sofosbuvir’s unmerited patents include:

  • The Base Compound (one patent): Sofosbuvir is the backbone of all Gilead’s hepatitis C treatments. The core molecule in sofosbuvir is a nucleoside compound. Years before Gilead filed its patents, nucleosides like sofosbuvir already existed in relation to antiviral and anticancer treatments. The core molecule in sofosbuvir has all the same elements in the same arrangement as these existing nucleosides except for one element that is an obvious change.
  • The Prodrug (three patents): A prodrug helps humans metabolize an inactive drug base compound once it enters the body. This type of prodrug has accompanied nucleoside treatments for decades. Since sofosbuvir is a nucleoside, using this type of prodrug was an obvious choice to activate the basic molecule. Gilead’s three main prodrug patents extend its monopoly by four years to 2029.
  • The Crystalline Structures (two patents): Crystalline structures are the solid form of molecules coming together, for example how sodium chloride molecules come together to form salt crystals. Pharmaceutical companies like Gilead try to patent as many crystalline formations as possible on a single drug, all of which are inherent in the parent molecule and are not invented. Gilead’s two main crystalline patents extend its monopoly by five years to 2030.

“When a few questionable patents let one company monopolize a market until 2034, there’s something wrong,” said Aaron Kesselheim, associate professor of medicine at Harvard Medical School. “We need solutions and legal action on behalf of patients to help end strategies that some manufacturers use to inappropriately delay generic entry and sustain elevated prices that cripple families and state health programs across the country.”

In a new white paper today, I-MAK details how unmerited patents and over-patenting by the pharmaceutical industry will cause more than $55 billion in excess costs to Americans. The paper examines three of America’s most expensive and widely prescribed drugs for cancer and hepatitis C: Revlimid®, Sovaldi® and Gleevec®.

“When companies abuse the patent system, taxpayers and patients pay billions of dollars more than they should and people don’t get treatment,” said Priti Krishtel, co-founder and co-executive director at I-MAK. “The pharmaceutical industry is using unmerited patents and other anti-competitive strategies to delay competition for decades, and Americans are paying the price. The drug patent problem extends to nearly every drug class and blocks our ability to treat hepatitis C, cancer, diabetes, and many other prevalent diseases.”

As the white paper details, strategies to delay competition and keep generics off the market are driving up costs to payers, patients and taxpayers:

  • Revlimid® (lenalidomide): The unmerited patents obtained by biopharmaceutical company Celgene give the company exclusivity from 2019 through 2028, at minimum. Payers are projected to spend $45 billion in excess costs for the drug within this period, prior to the first generic product entering the market.
  • Sovaldi® (sofosbuvir): Unmerited patents will prevent competition now through 2034, when final patents held by Gilead Sciences expire on the drug. Payers including patients, insurance providers and taxpayers are projected to incur $10 billion in excess costs.
  • Gleevec® (imatinib): In the one-year period from 2015-16, approximately $700 million in excess costs were passed onto payers as a result of a pay-for-delay payment from Novartis to a generic company.

The pharmaceutical industry has come under growing scrutiny for exploiting legal loopholes in the U.S patent system. In a recent decision, a federal judge ruled Allergan’s patents for Restasis were invalid after the company purposefully evaded review by the Patent Trial and Appeal Board. Pharmaceutical companies are spending more on marketing and lobbying even as the industry pursues tactics to repeatedly extend the life of their decades-long monopolies.

Since 2006, I-MAK has challenged unmerited patents worldwide winning over 80 percent of its cases. Challenging and winning cases on four HIV drugs alone has helped save over $500 million – money that can be reinvested to treat more than one million people. Several countries have rejected or not granted patents for Gilead’s hepatitis C treatments. I-MAK was also the first nonprofit to file and win a patent challenge in China. The nonprofit’s ongoing legal work in the country to challenge sofosbuvir patents could help save $59 billion and spur generic competition that benefits the global supply chain and patients worldwide.

“There is little debate that the market for pharmaceuticals is broken, and abuse of the patent system is a major driver of the problem. Companies like Gilead employ teams of lawyers to exploit the letter and spirit of patent laws, extending drug monopolies and keeping prices artificially high,” said John Arnold, co-chair of the Laura and John Arnold Foundation. “The patent system is designed to balance the interests of innovation and consumer welfare. But abuses by pharma companies have tilted this dynamic in favor of industry, delaying legitimate competition and causing drug prices to escalate at unsustainable rates. We are happy to support I-MAK’s legal challenges in order to restore integrity to the system and improve access to the medicines people need.”

With support from the Laura and John Arnold Foundation and other foundations and philanthropists, I-MAK is focused on restoring integrity in the patent system so people can get access to the medicine they need. The organization works on behalf of the public interest and does not take any funding from branded or generic pharmaceutical companies.

“When I was first diagnosed with hepatitis C, I was told multiple times that Medi-Cal could not cover the $100,000 price tag for Harvoni until I was sicker due to treatment rationing,” said Shardae Wood, a hepatitis C patient from Paradise, California. “After three long, devastating years, I found an organization that helped me get generic treatment for just $1,000—one percent of the brand cost. I got lucky, but Americans with hepatitis C shouldn’t be forced to jump through endless hoops or wait until they are on the brink of liver failure for insurance to cover their medication.”

“One in five Americans can’t afford prescription drugs for themselves or a family member,” said Dr. Amanda Parsons, vice president of community and population health at Montefiore Health System and an I-MAK board member. “Even people with curable diseases like hepatitis C are dying each day in this country. We need more than just patient assistance programs.  We need better access to more affordable, life-saving pharmaceuticals and more competition in the market to drive down costs.”

Contact:

Leah Conklin | leah.conklin@berlinrosen.com | (570) 709-5952

Cara Newlon| cara.newlon@berlinrosen.com | (703) 899-3206

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