As of this month, thousands of people who take Humira to treat arthritis and inflammatory disease are able to access the medicine more cheaply—in Europe. That's because alternative versions, called biosimilars, are hitting the European markets, giving patients in over two dozen countries more affordable choices for getting the care they need. Sadly, Americans won't be so fortunate.
As a new analysis by my organization shows, the maker of Humira has extended its U.S. monopoly on the drug for years by pursuing patenting strategies that delay competition and allow the company, AbbVie, to keep prices high. Humira has 247 patent applications in the U.S., compared with 76 in Europe. Almost 50% of Humira's U.S. patent applications were filed in the past four years, even though the drug has been on the market since 2002.
Why should an old drug suddenly claim new patents? Simple: monopoly power. More patents mean more years a company can hold a monopoly and charge whatever they want.
The great American migraine of excessive drug prices needs relief—fast. To stop the rising cost of drugs, we need to stop drugmakers from taking advantage of a patent system that allows them to prolong monopolies and dictate prices well beyond the 20 years provided by law.
Humira is a prime example. From 2012 to 2016, as AbbVie layered on more patents, the company raised the price by 18% every year. Total spending on Humira by Medicare and Medicaid during this time increased 266%. AbbVie's anti-competitive patenting strategy has allowed it to extend its U.S. monopoly until at least 2023.
For the company, the payoff is clear: Humira provides nearly two-thirds of AbbVie's revenue, generating over $100 billion in sales since 2002. Every extra year of patent protections in the U.S. earns the company $12.4 billion, or $34 million a day. For U.S. patients, taxpayers, insurers and government health providers, however, the benefit is less clear. The U.S. is poised to spend more than $14 billion on Humira over the next five years before less-costly biosimilars arrive.
But overpatenting is not limited to Humira. Another recent I-MAK analysis found that the 12 top-selling drugs in America average 125 patent applications per drug, giving each an average 38 years of attempted patent protections. Since 2012, the prices of 11 of these best-sellers have risen an average of 80%. Americans spend more than anyone else in the world on medicine in large part because drugmakers exploit the power to charge so much in the first place.
The pharmaceutical industry claims its practices are all in service of medical advances, then blames others for rising prices and insists that fair competition will hinder progress. But the Martin Shkrelis of the world have made it clear that charging as much as possible for medicine is the name of the game—a “moral obligation”—and that patents are fundamental to this strategy. AbbVie's chief financial officer boasted about patents to Wall Street investors just last month when he said: “You've seen us execute very nicely with our legal strategy and the settlements around the U.S. events to delay the onset of (loss of Humira's exclusivity) into the 2022-23 time period.”
A big patent estate might sound nice to investors, but exploitative patenting practices have real-life implications. Americans are making impossible sacrifices to get the medicines they need. They overwhelmingly say drug prices are too high, that Washington isn't doing enough, and that drugmakers have “too much influence” in the capital.
Congress can start listening by holding public hearings about the role of overpatenting in the drug-pricing crisis. The abuse and misuse of the patent system by drugmakers needs to stop, and patients and consumer advocates deserve more say in the patent system. Patents are an important tool for rewarding research on new inventions, but when they become tools for controlling the market, blocking competition and keeping prices high, we have a problem.
