Myths about how patent rights affect competition within the drug industry remain a pressing issue for innovators. Although strong patents play a crucial role in promoting innovation — both in the drug industry and in other sectors — lawmakers and activists cite these myths as evidence of the need for legislation that would limit or weaken patents.
During the recent Federal Trade Commission and Department of Justice listening sessions on drug pricing, for instance, several panelists amplified false claims that the current patent system stifles competition and keeps drug prices high. These arguments reflected disproven narratives about how drug patents influence the development of generic and biosimilar medicines.
In reality, research shows that patents are not a barrier to the development and manufacturing of generics and biosimilars, which is why America’s generic and biosimilar industries are thriving and account for the vast majority of U.S. prescriptions. Additionally, industry leaders with firsthand experience have gone through lengths to explain why patents do not impede competition. For example, earlier this year, Amgen — a manufacturer of both biosimilar and biologic drugs – published a rebuttal to numerous patent myths in Nature Biotechnology.
Policymakers must reject false narratives about drug patents to avoid enacting unnecessary, overly burdensome policies that could undermine innovation. Below, we set the record straight on three of the most common false claims regarding patenting in the drug industry:
| Claim: Patents on drugs and drug manufacturing processes are often weak or frivolous. |
| In reality: The notion that companies frequently file “bad” patents does not fit with data. A recent analysis by the nonpartisan Sunwater Institute found that patents granted by the USPTO are overwhelmingly of high quality, with the USPTO’s success at filtering out invalid applications comparing favorably to patent offices in places such as the European Union, Japan, and South Korea. Further, while patent critics sometimes characterize improvements to manufacturing processes as undeserving of patent protection owing to the alleged prior use of the process in question, Amgen’s response in Nature Biotechnology debunks this claim. Amgen clarifies that not only do these process changes represent valid, patentable improvements, but that they are rarely found invalid when subjected to closer scrutiny — and that among the numerous patent portfolios the company has litigated, it “did not find any manufacturing patents invalid owing to prior commercial use of the process.” Recognizing the fact that patents are rarely granted in error is crucial to counter potentially harmful legislative proposals such as the Interagency Patent Coordination and Improvement Act, which would force the FDA and USPTO to share substantial clinical and manufacturing data in order to ensure that drug patents meet statutory requirements. Contrary to what advocates of this bill argue, existing evidence indicates that the existing severe penalties for fraudulent misrepresentation — such as telling the FDA one thing and the USPTO another — already operate as intended to check bad actors. The burdensome requirements proposed by the legislation would harm innovators without a corresponding upside. |
| Claim: Makers of brand-name drugs seek to block competition by filing large numbers of patents on the same medicine and by patenting improvements to drugs already on the market. |
| In reality: Claims like these are among the most common myths about patents, but they do not hold up under scrutiny. For one, drug innovators have good reason to file multiple patents on the same medicine. The reason is that, like other complex technologies — including smartphones and other electronics — drugs comprise a variety of distinct innovations, each of which merit a patent to protect the R&D behind that invention. Drugmakers also have reason to continue improving their products — and filing patents on those improvements — after the products have been released on the market. As Amgen explains in its piece, these innovations, which range from improved formulas and dosing methods to improved manufacturing processes that speed production and lower costs, represent real quality of life improvements for patients and sources of cost savings. A recent report by the Information Technology and Innovation Foundation (ITIF) further detailed how “follow-on” research improves patients’ quality of life, promotes better health outcomes by making it easier for patients to keep to their treatment regimens, and often reduces healthcare costs in the long term. Finally, while patent critics often point to data from the Initiative for Medicines, Access, and Knowledge (I-MAK) as evidence that filing greater numbers of patents helps drugmakers block competition and extend their market exclusivity, this data has been repeatedly shown to be flawed. C4IP, for example, has compared I-MAK’s data on drug patenting with official data from the U.S. Patent and Trademark Office and found that I-MAK significantly overstates both the number of patents filed on individual drugs and the effective duration of drugs’ market exclusivity. |
| Claim: Excessive patenting is preventing biosimilar and generic drugs from entering the market in a timely fashion. |
| In reality: Contrary to what many people claim, patents on brand-name drugs do not serve to unreasonably extend the period of market exclusivity — research has repeatedly found that average periods of drug exclusivity are approximately seven to eight years less than the 20-year statutory length of a patent. This is supported by USPTO data: A study conducted by the USPTO found no correlation between the number of patents on a product and the length of time before generic or biosimilar entry. It also noted that the effective period of exclusivity for drugs is typically less than 12 years. Furthermore, the fact that patents are not a barrier to generic and biosimilar competition is evident in the thriving generic and biosimilar markets. In the United States, nine of every 10 prescriptions are filled by generics. Likewise, the development of biosimilars — cheaper alternatives to brand-name “biologic” drugs derived from living organisms — continues at a steady pace. Since 2015, the FDA has approved more than 60 biosimilars, with 18 approvals coming in 2024 alone. As Amgen’s piece highlights, while some biosimilars and generics may still face delays in reaching the market, this is primarily driven by the complexity of the science behind these drugs rather than by patents. These facts underscore the baselessness of calls for legislative changes like the Affordable Prescriptions for Patients Act and the ETHIC Act, which both seek to restrict the number of patents on which innovators can assert infringement claims if another company attempts to sell the same product. These bills are premised on the false assumption that excessive numbers of patents are driving delays in biosimilar and generic development. However, this legislation would only weaken inventors’ incentives to develop the next generation of cutting edge treatments, to the detriment of future patients. |
To see additional explanation of these issues, please see the C4IP comment letter submitted in response to the United States Trade Representative’s recent request for input on this topic. You can access that submission here.