Several studies and congressional investigations have pointed to drugmakers’ use of the patent system to extend monopolies, increase prices, and delay generic or biosimilar competition. One study found that of roughly 100 bestselling drugs, nearly 70 percent obtained an additional patent to extend its monopoly period at least once; nearly 50 percent extended it more than once. An analysis of the 10 best-selling drugs of 2019 found that on average these drugs held more than 69 patents with 37.5 years of patent protection, well past the 20 years of patent life intended by Congress. Furthermore, the prices for these drugs increased 71 percent over the previous five years.

Volume and Quality of Patents Is Costing the U.S. Health System Millions of Dollars

In a recent report from a drug-pricing investigation, the House Oversight and Government Reform Committee found the drug manufacturer AbbVie exploited the patent system for its top drugs, Humira and Imbruvica. For Humira, 90 percent of the more than 250 patents were filed after FDA approval and cost the U.S. health system at least $19 billion from 2016 to 2023 because of delayed generic and biosimilar competition.

AbbVie employed a “drip feed” strategy in its patents for Imbruvica. This strategy embraces the use of continuation patent applications — that is, a manufacturer files multiple additional patents that were already disclosed when an original patent was granted, but with more specifics. The more than 150 patents for Imbruvica cost the health system $41 billion due to delayed generic and biosimilar competition. When drugmakers obtain additional patents to hold competition at bay, they can maintain a monopoly and increase prices.

Another House Oversight report investigating drug manufacturer Teva’s Copaxone found evidence of product hopping — that is, switching patients to a version of a drug that is not clinically different. In this case, Teva shifted patients from the original version of Copaxone 20 mg to a newer increased dosage version of Copaxone 40 mg, creating a 2.5 year delay in generic competition and costing the U.S. health care system between $4.3 billion and $6.5 billion in excess expenditures. Teva executives referred to the new dosage as a “patent protection extension” despite a lack of evidence demonstrating increased efficacy.

Drug pricing remains a top concern for Americans. Addressing this complex problem will take a concerted, multifaceted approach that includes reforming the reimbursement system, such as allowing Medicare to negotiate drug prices, as well as changes to the patent system to ensure timely price competition.