How the US patent system keeps drug prices high

Pharmaceutical companies can use overlapping patents to extend their exclusive rights to a drug, delaying production of cheaper generic forms.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Flora Lichtman?

  Hey, it's Flora Lichtman and you're listening to Science Friday. Americans pay roughly three times as much for prescription meds compared to other wealthy and developed nations. It's an issue that cuts across party lines. Both the Biden and Trump administrations rolled out their own proposals to address this. But the problem persists. So why are our drugs so expensive? My next guest argues it's largely to do with how our patent systems work. If that sounds wonky, hang with us. It's actually really interesting and Tahira Amin will tell you why. He has a really unique perspective because he's been on both sides of this issue.

• 0:44Flora Lichtman?

  He's spent a decade as an intellectual property lawyer, helping corporations use patents to protect their bottom lines. Then he moved to India and saw firsthand how the global patent system hampered access to HIV drugs. And so he started an advocacy organization to make access to medicines more equitable. He lays it all out in a new book called "Pharma Monopoly: The Battle for the Future of Medicines." Tahira, welcome to Science Friday.

• 1:10Speaker 01

  Thank you, Flora. Thanks for having me.

• 1:12Flora Lichtman?

  Let's just step back for a second. So we have this patent system. What was the original intent of it?

• 1:18Speaker 01

  So the patent system is, was created to incentivize invention. And so the incentive was you come up with a new novel invention, something that is not obvious to somebody in that field. Obviously, you invest some of your time and money into that. And then we, the system provides you with a limited time of exclusivity. So what you have now is a system where from a day to filing a patent, you get 20 years of exclusivity. The problem is today pharmaceutical companies and other companies in different fields have

• 1:57Speaker 01

  worked out that I can actually have overlapping patents that extend that period of protection in order to keep competition out. And so this is where-

• 2:07Flora Lichtman?

  Overlapping patents for the same drug?

• 2:10Speaker 01

  So for example, yeah, so if I I've come up with a invention for a compound that goes to make the actual uh uh product, the medicine, we call it the active ingredient, let's say. It gives the sort of curative effect or the therapeutic effect. And then what I do then is, oh, I need to, if I'm a company, I need to then get this drug into the body. So I'll come up with a formulation. And then I realized this drug can also be used on several different indications, different conditions. So for example, I know the mechanism of action of the molecule can be used to treat, let's say, inflammation. So I will test it on all the different types of inflammation.

• 2:52Speaker 01

  It's the same drug, but each time I get an FDA approval for each of those conditions, I get a separate patent. And this then adds on the layers. And then I can also formulate it so that when I release the, when I launch the product with its first form, it might be an intravenous form. And then I can switch it to a injectable form, and that adds on new life to the patent. Now, the argument from the industry is, well, eventually the patent on the original form will run out so that competitors can use that. But the market is much more complicated than that because what companies do is they switch patients onto the new form. And so the clock restarts again and the monopoly restarts again. A great example of that is the drug, the cancer drug, KEYTRUDA, which is on the market,

• 3:37Speaker 01

  one of the best selling drugs ever. And what Merck has done is they've now launched a injectable form of the drug. It's previously delivered in an IV form. So now they're trying to switch the whole market over to the injectable form before this, its patents run out. So then they've got a new level of protection around the injectable form. And then the clock restarts and they've basically cannibalized any market that might exist for any competitor coming, coming in.

• 4:10Flora Lichtman?

  Is there any limit to the number of patents that a company can attach to a single active ingredient?

• 4:17Speaker 01

  There is a limit to the active ingredient that a company can apply for. So you get the original patent, which covers the active ingredient. But beyond that, there is no limit on the variations you can file patents for. There are an endless, there's a whole menu of variations you can apply patents for. And this is why companies can rack up anywhere up to three hundred, maybe even more patents filings on a particular drug. We found that with the GLP one drugs, for example, Zempic, Wegovy, Abvis Drug Humira had over three hundred patent applications by our account at least.

• 4:54Flora Lichtman?

  And then the upshot is that this prevents cheaper generics from going to market, right?

• 5:00Speaker 01

  Absolutely. What ends up playing out is companies, competitors have to then litigate through all these patents. Because inevitably, it's going to become a litigation game. So think about it this way, it could cost a branded pharmaceutical company around about thirty to forty thousand dollars to file and get a patent. It costs millions to litigate each one. And as a competitor, I basically say it's not worth my while trying to battle all the way through all these patents. And what ends up happening is companies settle. And usually with some kind of settlement, there's a delay when the competitor can enter because that's the agreement.

• 5:40Flora Lichtman?

  You know, the counter argument I've heard is that, you know, companies invest all this money to develop new drugs. What is your perspective on that argument?

• 5:50Speaker 01

  So I think we we often take as a given that it takes billions to develop a drug. That is a figure that has been thrown around for almost two decades now. But I would actually like to reframe that whole argument and saying, how can we know how much these drugs cost to develop? When we have never seen the actual figures? These are non-transparent numbers. They live in a black box. It's a guarded commercial secret. And so really, I think we can say, yes, it does cost a lot of money because obviously testing, clinical trials and research will cost money. But is it the billions that we're often told that then justify all these practices that the industry

• 6:35Speaker 01

  then uses to be able to say, charge high prices? We want more patents. We want more longer monopolies. No one knows what how to make policy in this in this area when you're not actually seeing the evidence. We're taking the industry's word as gospel.

• 6:55Flora Lichtman?

  You know, I wanted to ask you about a specific anecdote that came up on the show very recently. I talked to a researcher who was studying how the shingles vaccine has been correlated with lower dementia risk. And he was like, and I hope someone listens to this because I can't get a clinical trial started because there's no financial incentive to do it because the shingles vaccine patent expired.

• 7:21Flora Lichtman?

  Which seemed wild because of the number of people that are affected by dementia. Is this a representative story? And is there something to do about that?

• 7:32Speaker 01

  That's a great example. I think a lot of diseases which are not profitable in the market, or because there's no patent to basically allow a company to profit from it, get left by the wayside. Interestingly, with the Ebola issue coming at the moment, there's we have a couple of vaccines in the marketplace. But back in 2014, when the first breakout happened, there was basically this this monoclonal antibody, I believe, that was sitting on the shelf. And the only guy she got utilized at the very last minute, and it wasn't utilized in the area in West Africa where it was needed. It was only when I think it was a Western doctor that contracted Ebola was flying to the US. And that's when it was used. And so really, there's a there's a whole bunch of conditions which don't actually

• 8:17Speaker 01

  get sort of investment in because there's no market for these companies to make profits. And so that then begs the question, what kind of system do we have? Unless the companies can get a plethora of patents around it, they're not interested. So they're only interested in how do I make more money out of this?

• 8:37Flora Lichtman?

  Right, which is not necessarily how do I solve the biggest problem?

• 8:40Speaker 01

  No, and that is the problem with the measure of our pharmaceutical industry today is not how many lives I can save, is how much wealth I can make for my shareholders, for my, for dividends that I give back. That's what the CEOs are measured by, in terms of their performance, their CEOs, their salaries are measured by that. That's actually the measure of the pharmaceutical industry today. That's what they measure themselves by.

• 9:04Flora Lichtman?

  Great. Are there low, is there low hanging fruit here? In terms of changes we should make, in terms of solutions, like one patent per active ingredient? What do you think? Where do we start?

• 9:18Speaker 01

  So that is a great suggestion. There are academics who have coined this one and done, you get one exclusivity. You have to remember, the patent is not the only exclusivity system in the game. When a drug gets approved, the FDA grants what is called the marketing exclusivity. So this idea that we need all these exclusivities to, you know, give the ROI that these companies need, we've actually over incentivized them. And so basically, the one exclusivity system would be great. But I think we need to go further than that. We need to build public manufacturing systems that basically can provide a counterbalance to the private sector. They're never going to behave unless there's actually an alternative.

• 10:00Speaker 01

  And we need to start creating that alternative. And some of the things that have happened in California, for example, with CalRx, where there's public production of insulin. But how do we develop drugs through public channels from beginning to end? There's so many options on the table, it just needs political will to create an alternative system that would push back against the private stranglehold that we're in.

• 10:23Flora Lichtman?

  Do your old corporate, like intellectual property lawyer friends like to argue with you across the dinner table about this?

• 10:31Speaker 01

  Oh yeah, no, I, I, you know, actually what's interesting is, is,

• 10:37Speaker 01

  I sit with, I've sat with a lot of scientists at pharmaceutical companies. I've sat with a lot of lawyers. Many lawyers actually secretly, they'll never go on record, but secretly say actually that the system's a mess. So even the more reasonable corporate IP lawyer recognizes there are fundamental problems. And then you speak to scientists, I mean, I have scientists on my team who've worked in the industry for over 40 years, who say a lot of the stuff that we grant patents for, they're not novel, they're not new. But what we've done is we've, the, the, the policies that we've created over the last 40, 50 years, we've shrouded it all in this very broad term of innovation. And innovation can mean anything.

• 11:19Speaker 01

  And this is where I think the integrity of the patent system has totally been diluted because of innovation policies in order to drive more products. More products does not mean new science. Very two different things. But we've been caught up in this cultural, uh, uh, aspects of innovation that drives everything today and we don't question it. The, the moment you question innovation, you're kind of like a pariah.

• 11:44Flora Lichtman?

  Tahera Min is the co-author of Pharma Monopoly: The Battle for the Future of Medicines and a co-founder and CEO of IMAC, Initiatives for Medicine Access and Knowledge. Thank you for being here today.

• 11:57Speaker 01

  Thank you. Appreciate it.

• 11:59Flora Lichtman?

  This episode was produced by Shashana Buxbaum. If you have a question, a comment, a gripe, call us, 8774-CYFRI is our number. We love hearing from you. I'm Flora Lichtman. Thank you for listening.