If you’re not spending your free time browsing the latest antitrust lawsuit filings, you may have missed that Mylan filed a complaint this past May accusing Sanofi of having illegally extended its monopoly on insulin in the U.S.
The complaint provides, in a remarkable level of detail, another damning example of patent abuse. It shows us how brand-name drugmakers’ patent abuse is like a layer cake – it’s seemingly simple from the outside, but, upon closer inspection, you see a meticulous and intricate arrangement of tactics stacked on top of the other. Sanofi’s strategy to extend its Lantus monopoly appears to include several classic ingredients: a medley of “drip-fed” patents, improper Orange Book patent listings, and a product hopping scheme to top it all off.
The tactic I’d like to call your attention to is the improper listing of Orange Book patents. These Orange Book abuses have, in the past, failed to attract an iota of attention from policymakers and regulators. Thankfully, the tide is beginning to turn. In August, Sen. Elizabeth Warren and Rep. Pramila Jayapal wrote to FDA Commissioner Robert M. Califf urging him to address the practice. Shortly after, FTC Chair Lina Khan published an unprecedented policy statement condemning it as anti-competitive and signaling that the office will start using its enforcement powers to curb such practices.
Mylan’s complaint underscores why we desperately need to turn that recent attention into immediate reforms. According to Mylan, the company was forced to cut through a dense patent thicket of twenty-one patents, nineteen of which were improperly listed on the Orange Book. Subsequently, every one of those 21 patents was invalidated or removed by litigation. Yet, as Mylan explains, losing litigation is a winning strategy for a monopolistic drugmaker.
“[A]ny loss by Sanofi paled in comparison to the benefit of forcing Mylan (and other would-be competitors) to languish in the judicial and regulatory systems, allowing Sanofi to continue raising prices and bilking customers”.
Against our better judgment, let’s put ourselves in Sanofi’s then CEO Olivier Brandicourt’s shoes for a moment. There are a few key findings from our recent report, The Burden of Patent Thickets, that must be considered when thinking about Sanofi’s overpatenting of Lantus:
- Sanofi’s main patent on its insulin product expired in 2015, which was when all the additional patents and improper listings on the Orange Book came into play.
- A single year of extended exclusivity on Lantus brought Sanofi $2.6 billion in revenue.
- Sanofi was able to extend its exclusivity by 5.5 years through its patent abuse schemes, generating $14.4 billion in revenue.
- Of that $14.4 billion, by our conservative calculation, approximately $10 billion was pure profit.
If you’re only focused on profit and are able to ignore that 16.5% of Americans who use insulin have had to ration their supply due to rising costs, the appeal of those competition-delaying schemes is obvious.
Until the FTC, FDA, and USPTO start working together to close loopholes like improper Orange Book patent listings and develop sticks big enough to dissuade them, brand-name drugmakers like Sanofi will continue to invest in “innovation” to cheat the system and patients will pay the price.
WHAT WE’RE DOING
In another encouraging sign of increased scrutiny, More Perfect Union released a video investigation on sham Orange Book patent listings. In the video, I reference our Burden of Patent Thickets report on breaking down the costs of extended monopoly pricing power while Sen. Warren explains the goals behind her and Rep. Jayapal’s letter to Commissioner Califf.
The Center for American Progress’s new report, titled “Following the Money: Untangling U.S. Prescription Drug Financing”, provides a very thorough rundown of our drug development, supply, and pricing system, and the causes of high drug prices. One of their first policy recommendations, in big bold font, reads: “Stop patent abuse by pharmaceutical manufacturers”. While the steps they mention are important and essential, a comprehensive solution will ultimately require structural reform of the patent system along with immediate incremental legislation that addresses specific abuses along the way.
On the global front, the United States International Trade Commission released a disappointing report on extending last year’s WTO decision to include Covid therapeutics/diagnostics. On its very first page, the report calls the original TRIPS Agreement “a fair balance.” As I explained in front of the USITC back in April, the creation of TRIPS was anything but balanced. The thinking behind that revisionist history is exactly what prevents entities like the USITC from addressing the neo-colonial power dynamics that define the WTO, enhance pharmaceutical company power, and hamper global medicines access.
RELEVANT NEWS RUNDOWN
ProPublica released an excellent and infuriating story about how GlaxoSmithKline used government money to develop a promising tuberculosis (TB) vaccine, shelved it once they realized it wasn’t as lucrative as other products, and then asserted their IP to stop others from pushing the life-saving vaccine forward. UNAIDS Executive Director Winnie Byanyima called it a “shocking story of corporate greed”. She’s right, but it’s also a story about our inequitable global medicines system.
October marked the beginning of Medicare’s drug price negotiations. In The Washington Post, Aaron Kesselheim and C. Joseph Ross Daval debunked each of the claims that underlie drugmakers’ shameless lawsuits and explained why they “must be rejected.” In addition to how legally weak drugmakers’ reliance on the takings clause is, I also find it ironic. Given how industry relies on government-granted patents and then pockets millions even if those patents are invalidated, who’s doing the taking?
At the end of last month, we held our latest Participatory Changemaking convening. This time, we gathered stakeholders from academia, policymaking, industry and patient advocacy to discuss patent thickets, what they are, and how to address them.
In addition to robust discussions about multiple potential policy pathways, the gathering spoke both to the growing understanding of involving patients in discussions about policy that impacts them and the surging momentum for patent reform. The people in that room were there to work together towards something they feel is both important and achievable. Stay tuned for the policy blueprint that will include recommendations that emerged during the convening.