The cost of healthcare in general is a debilitating, pre-existing condition for Americans. But the high prices of prescription drugs usually stand out as a pain point. While there are many insidious reasons why Americans pay more—often far more—for their medicines than people in peer countries, exploitation of the US patent system is an obvious one.
A study published Monday in JAMA highlights just how much patent exploitation has grown since 1990. In that time, researchers found that the number of patents on small-molecule drugs has more than tripled, going from an average of 2.1 patents per drug approved in 1990 to 6.9 for those approved in 2019.
Most of the growth was in “nonprimary” patents—patents that generally aren’t related to a drug’s active ingredient, but are instead for things like minor tweaks to a drug’s nonactive ingredients, updates to the way the drug is used, or the design of specialty delivery devices, such as auto-injectors. Together, those extra patents on an individual drug can create what’s called a “patent thicket,” which delays the release of affordable generics on the market, keeping drug prices higher for longer without actual clinical advancements.
The study—led by S. Sean Tu, an expert in drug and patent law at the University of Alabama—found that the increase in patents per drug extended the time in which a drug was patented from an average of two years in 1990 to an average of 6.1 years in 2019.
“Because patent protection typically determines how long brand-name firms can charge monopoly prices, the rapid growth of nonprimary patents may contribute to limited price competition that benefits patients and the health care system by helping avoid unnecessary spending,” Tu and colleagues write.
Patent overgrowth
For the study, Tu and colleagues used publicly available data to look at small-molecule drugs approved by the Food and Drug Administration and the patents filed on those drugs. (Other types of approved drugs, like biologics, are not systematically listed by the FDA in a publicly available database.) The researchers categorized the types of patents associated with each drug and how they affected the term in which the drug remained under patent. The researchers focused on drugs granted FDA approval between 1990 to 2019, giving a five-year follow-up period for patents. Still, this likely underestimates the current sizes of patent thickets, as patent activity is now extending up to nine years after FDA approval, the authors write.
Between 1990 and 2019, Americans saw their spending on prescription drugs soar. According to a Peterson-KFF analysis, the per capita, inflation-adjusted spending on prescription drugs in the US was $291 in 1990. By 2019, spending had risen to $1,084. Earlier this year, an analysis by the Commonwealth Fund found that Americans spent nearly twice as much on prescription drugs as the average spending of other high-income countries.
During the study period, “primary patents” on drugs—those usually related to the active ingredient—changed little. But nonprimary patents more than tripled. Overall, the FDA approved 1,981 small-molecule drugs between 1990 and 2019. For those 1,981 drugs, there were 10,940 patents total. Nonprimary patents made up 84 percent of them.
A key limitation of the study is that it didn’t look directly at delays to the availability of generic drugs, which are likely linked to patent thicket growth. Tu and colleagues note that drug makers often argue that additional patents don’t delay generic drugs. But the examples often used in those arguments are drugs approved before 2010, when patent thicket growth was lower than it is today.
The authors call for various reforms to cut back patent thickets, including more scrutiny by the US Patent and Trademark Office (USPTO), as well as laws that could limit minor add-on patents. They also suggest allowing courts to force disgorgement of drug companies found to have abused patents.
Without regulatory reforms soon, this boom in patent thickets “will likely entrench extended exclusivity periods that are disconnected from meaningful therapeutic innovation and continue to complicate and delay generic entry,” Tu and colleagues write.
