May 2023: Patent Reform is an Anti-Monopoly Issue

29 May 2023

In the last decade, the American anti-monopoly movement has been reinvigorated. Academics, advocates, policymakers and everyday citizens have called out the extreme concentration of the American economy, its devastating consequences and the need for action. When people think of modern monopolies, they tend to point to Big Tech, Big Agriculture, Big Banks, and the like. But, for as long as I-MAK has been working in the U.S., we’ve been sounding the alarm that the pharmaceutical industry is a central figure in America’s monopoly problem.

As part of that effort, our team recently co-authored a report with the American Economic Liberties Project exposing how the pharmaceutical industry routinely combines abusive patenting strategies with a host of anti-competitive tactics to block competition and maintain monopoly pricing power. Patent reform isn’t just a drug pricing fight, it’s a competition and fairness fight too.

Our research determined that:

  • Pharma has a seemingly endless supply of anti-competitive patenting tricks at its disposal: patent thicketing, patent evergreening, REMS abuse, sham Orange Book listings, product hopping schemes and settlement deals that delay generic entry.
  • The antitrust violations we identified cost the American public an estimated $40 billion in a single year.
  • 25 of the top brand drugs for Medicare or Medicaid have faced a highly credible allegation of misconduct under one or more of America’s antitrust laws.

The industry and their lawyers’ ability to concoct anti-competitive tactics may feel endless, but there are policy changes that can be implemented right now – from more resources for enforcers to tighter laws on what gets a patent in the first place – that would result in great returns for patients and other payers.

READ THE REPORT: The Costs of Pharma Cheating

What we’re doing

To illustrate one of the anti-competitive practices detailed in our report, we published a Twitter thread revealing Indivior’s “product hopping” scheme for the drug Suboxone. By launching a slightly differentiated, patent-protected version of Suboxone and converting 85% of patients over to it, Indivior effectively thwarted competition and preserved its monopoly over the opioid addiction treatment.

While antitrust action would go a long way towards increasing competition, many of the pharmaceutical industry’s anti-competitive practices are rooted in the patent system. Without patent reform, there’s no solving the monopoly problem. My co-founder Priti Krishtel spoke to Health Affairs about how the USPTO Patent Trial and Appeal Board is one important way to achieve some reform, as long as it honours the mandate to curb patent abuse laid out in President Biden’s Executive Order on Promoting Competition in the American Economy.

With over 40 other organisations, including the AARP and Patients for Affordable Drugs Now, we sent a letter urging the Senate to advance bipartisan bills that would be an important first step in helping lower drug prices by promoting competition, transparency, and accountability.

Addressing the monopoly power of the pharmaceutical industry is not going to happen overnight – it will require sustained action. At the recent STAT Breakthrough SummitPriti succinctly summed up the momentum for reform and reasons for optimism: “We’re seeing unprecedented Congressional scrutiny [and] executive branch scrutiny on these types of anti-competitive practices.”

Relevant news rundown

In a bit of good news that could positively impact drug development and make pharmaceutical companies reconsider some of their patent games, the Supreme Court upheld a lower court ruling that Amgen failed to disclose sufficient information supporting its patent claims for a best-selling cholesterol drug. Had SCOTUS ruled in favour of Amgen, it would have made it easier for pharmaceutical companies to extend their patent monopolies on a drug and prevent the research of other competitive medicines.

Lastly, as mentioned above, if anyone is interested in commenting on the USPTO’s proposed Patent Trial and Appeal Board rules, you can submit comments and concerns here by June 20th. If done right, these rules can go a long way towards curbing patent thickets and increasing competition.

Looking forward

Starting next month, my co-founder Priti will transition out of her role as one of I-MAK’s co-Executive Directors and will be serving on our Board of Directors going forward. I will continue to lead I-MAK’s work and will have more news on this front and the organisation’s focus ahead in next month’s newsletter.

I want to take this moment to recognise the end of a chapter and congratulate Priti on her transition. It has been an honour to co-lead and co-create I-MAK with Priti over the last 17 years. From our initial work in Bangalore to challenging the pharmaceutical titans of U.S. industry, Priti’s guts and smarts have enabled I-MAK to always punch above its weight. I could not have chosen a better partner to fight for equality and justice and am eternally grateful for her. I look forward to continuing to collaborate with Priti as she transitions to her new role on our Board, and seeing what she does next through her well-deserved MacArthur Fellowship and as part of the O’Neill-Lancet Commission on Racism, Structural Discrimination and Global Health.

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