Like inventors in every sector, drug developers rely on strong patent protections to create new and innovative medicines. However, because of the prices of many drugs, activists frequently blame patents and accuse companies of abusing the patent system with tactics such as “product hopping,” “evergreening,” and “patent thicketing.”
This troubling trend continued during the Senate Judiciary Committee‘s May 21 hearing on drug pricing, at which several witnesses argued that patents were responsible for high drug costs. But their arguments, and the evidence they provided, did not show that patents were preventing generic competition.
| Claim: “By switching their market to a “new drug” [through a “product hopping” strategy], brand-name companies effectively eliminate the market for new generics.” |
| In reality: Drugs, like any other technological product, are sometimes phased out of the marketplace when newer and more updated versions become available. This is a normal practice for any company that creates updates to its technology. But more importantly, the development and patenting of a new version of a drug does not inhibit generic manufacturers from copying prior versions of the drug whose patents have expired. Consequently, when patients and providers do choose brand-name drugs over generics – something that happens for just one in every 10 prescriptions – their decisions are largely explained by a preference for the latest, most up-to-date versions of drugs rather than by a lack of available options. |
| Claim: It constitutes an anti-competitive “patent thicket” when a company registers new patents on a product that increase the “density” and “duration” of its patent portfolio. |
| In reality: The reason that many drugs are protected by a large number of patents is simply that they rely on a combination of numerous different inventions. The “density” of patents protecting a particular product reflect this—for example, the first iPhone was covered by about 200 patents. For drugs, a competitor remains able to make use of the technology protected by any single patent once that patent has expired or to “design around” a given patent to achieve the same or similar result with different technology. The fact that many drugs cannot be replicated until all patents have expired is a result of the fact that all of their constitutive innovations are unique and essential – not an inherent result of patent “density.” Additionally, characterizing the “duration” of a drug’s patent protection as “the time from approval until expiration of the last-to-expire patent” is disingenuous, as newly granted patents have no effect on the life of an existing patent. Once the original patent(s) on a drug expires, that original formulation can then be copied by any competitor. |