Common questions about patents and their impact on patients
Common questions about patents and their impact on patients
Q1: What are pharmaceutical patents?
A: A pharmaceutical manufacturer may spend years researching and developing a new medication before it can be possibly approved by a country’s regulatory body for medications. Pharmaceutical manufacturers that have developed a new medication often seek a form of legal protection known as a patent right, which gives them the exclusive right to make and sell the medication for a set period without competition. This allows pharmaceutical manufacturers to recover the money they spent on research and development to bring the medication to market.
When the patent expires, generic and biosimilar medications can be made available to the public after a country’s regulatory body for prescription medications has approved them as safe and effective. Once approved, generic and biosimilar medications can enter the market at a lower cost (up to 95% for generics and 30–50% for biosimilars), potentially saving healthcare systems billions of dollars.
Q2: Why are generics and biosimilars more affordable than original medications?
A: Developing an originator medication is costly and time-consuming — on average, it takes 10–15 years and costs over $1 billion U.S.
Generic and biosimilar manufacturers do not incur the same early research and development costs to bring the product to market and can therefore offer it at a lower price. [1]
Q3: How Does the Patent System Impact Patient Access to Affordable Medicines?
A: Because of the significant revenues generated through monopoly medicine pricing, manufacturers of original medicines are incentivized to maintain their monopolies, and do so, in part, by exploiting loopholes in the patent system. This is especially true in the United States given how much patients in the United States (U.S.) pay for medicines. To illustrate, in 2020, U.S. sales of the 20 top-selling medicines worldwide totaled $101.1 billion U.S. In comparison, sales to the entire rest of the world totaled only $57 billion U.S. [2] For 17 of the 20 top-selling medicines worldwide in 2020, pharmaceutical companies made more money from U.S. sales than from sales to all other countries in the rest of the world combined. [3]
Q4: Why are some medications still so expensive, even though they have been available for decades?
A: One of the drivers of higher medication costs is the misuse of patent protections by pharmaceutical manufacturers which may delay the availability of affordable generic and biosimilar medications for years, or even decades.
Pharmaceutical manufacturers of original medicines may use legal maneuvers such as “evergreening” (adding patents for minor changes) and “patent thicketing” (filing dozens of overlapping secondary patents) to maintain monopoly pricing for longer periods.
Example: Humira (adalimumab) – used to treat inflammatory forms of arthritis and inflammatory bowel disease.
United States
- The manufacturer has filed over 247 patent applications and obtained over 132 patents.
- The primary patent protecting the adalimumab antibody expired in 2016. Yet the manufacturer obtained numerous secondary patents, some of which do not expire until 2034.
- More than 90% of those secondary patents issued in 2014 or later, despite that Humira was first marketed much earlier, in 2002.
- The manufacturer had 21 years of market exclusivity for Humira in the United States—from its FDA approval in 2002 until biosimilars launched in 2023.
- Over the six years that biosimilars were not on the market after the manufacturer’s primary patent expired, the U.S. healthcare system paid an additional $30 billion U.S. for access to adalimumab.
Canada
- The original patent expired in 2017, but the manufacturer filed dozens of additional patent applications, maintaining monopoly pricing until 2021 in Canada.
- Total cost of this delay: Over $1 billion in additional drug spending for Canada’s public drug plans.
Australia
- Biosimilar competition started in Australia in 2021. Three years after the compound patent expired in Dec. 2018.
- Each year of delay to biosimilar access cost the Australian healthcare system around $31 million U.S. Over the course of the three years that biosimilars were delayed after expiry of the compound patent, the Australian healthcare system paid a total around an extra $94 million USD for access to adalimumab.
Q5: How do original manufacturers delay competition for off-patent generic and biosimilar medications entry into the market?
A: Manufacturers use patent strategies (e.g. secondary patents on formulations, dosages or delivery methods) to maintain their market monopoly, which block competition and keep their medication at the “patented price.”
Common tactics used to delay affordable medications:
- Evergreening: Filing new patents on minor changes (e.g., different dosages, coatings, or packaging) to prolong market exclusivity.
- Patent Thickets: Flooding the system with dozens of overlapping patents to create legal and financial barriers for competitors.
- Patent Linkage System: : Patent linkage refers to the linking between the marketing approval of generic or biosimilar medicines and the status of patents covering brand-name medicines.
Q6: How does delayed access to generics and biosimilars impact patients?
A: Most people living with inflammatory arthritis like rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis and lupus require lifelong medications to prevent permanent joint damage.
While safe and effective, generics and biosimilars are blocked from entering the market due to the drug patents, and patients have limited treatment options. Delayed access to affordable treatment options can have negative effects on health outcomes:
- Without affordable alternatives, patients must use higher cost original medications or go without treatment.
- Delayed or interrupted treatment gaps can lead to disease progression, disability and lower quality of life.
High medication prices can also lead to inconsistent treatment adherence, resulting in poor health outcomes.
- Example: A person with inflammatory arthritis who cannot afford their advanced therapy may skip treatment or ration or take lower doses to make their prescriptions last longer or stop taking the medication altogether.
- Reduced medication adherence can cause worsening symptoms, increased pain, loss of mobility, hospitalization, surgery, loss of job, or permanent joint damage.
Q7: How does misuse of patent protection affect out-of-pocket medication costs for patients?
A: Many patients currently cannot afford their prescription medications. Misuse of patent protection can result in patients continuing to pay for medications at the “patented price” rather than at much more affordable post-patent prices. Higher out-of-pocket medication costs have multiple impacts for patients:
- Patients pay for high-priced medications for years longer than necessary.
- Some patients must choose between paying for medicine or necessities like food, rent, or utilities.
- Financial hardship leads to debt, stress, and sacrificing other aspects of care.
- Patients often feel helpless or betrayed when they learn how the system prioritizes profit over patient care.
Q8: What are the emotional and psychological effects of high medication prices?
A: Patients who cannot afford their medication may feel forced to choose between their health and their financial stability. The constant financial strain creates stress, anxiety, and feelings of helplessness. Many patients experience guilt or distress if they must ask for financial help to afford medication.
Q9: How does misuse of patent protection increase healthcare costs for everyone?
A: Misuse of patent protection keeps healthcare costs high by forcing public and private drug plans to pay for medications at the “patented price” rather than at lower post-patent prices. Private health insurers may pass these higher medication costs onto patients through increased premiums and co-pays. Additionally, public drug plans may have less funding for new medications and other essential health services for people living with a chronic disease like inflammatory arthritis.
Q10: Does the misuse of patent protection affect the development of new medications?
A: Yes, manufacturers may prioritize prolonging market exclusivity of old medication patents over researching and developing new medications. In this case, patients may lose access to potential treatment breakthroughs.
If pharmaceutical manufacturers focused on innovation rather than patents, patients could potentially see more new and effective treatments enter the market, and more quickly.
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[2] [1]Public Citizen, “United We Spend: For 20 Top-Selling Drugs Worldwide, Big Pharma Revenue from U.S. Sales Combined Exceeded Revenue from the Rest of the World,” Sept. 30, 2021, available at: https://www.citizen.org/article/united-we-spend-big-pharma-us-international-revenue-report/.
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