THEY SAID IT! CONSUMER ADVOCATES AND EXPERTS SHINE A LIGHT ON BIG PHARMA’S EGREGIOUS ANTI-COMPETITIVE TACTICS THAT EXTEND MONOPOLIES AND KEEP DRUG PRICES HIGH
FTC Listening Session Highlights How Big Pharma Undermines Competition from More Affordable Alternatives
In case you missed it, the Federal Trade Commission (FTC) and Department of Justice (DOJ) on Monday held a listening session on anti-competitive tactics Big Pharma uses to maintain monopoly pricing over blockbuster brand name products.
Consumer advocates at Monday’s session called for reining in forms of patent abuse like “patent thicketing” – where a Big Pharma company files dozens or even hundreds of patents on a single medication to extend exclusivity – that block competition from more affordable generic or biosimilar alternatives. Such tactics significantly drive up costs for patients, with patent thickets on just five drugs amounting to more than $16 billion in lost savings over a single year.
Commissioners also heard from experts on a patent abuse tactic known as “product hopping,” in which a pharmaceutical company blocks competition by making a small, often insignificant tweak to an existing drug, such as a new way to administer it or a new dosage level, to extend patent protections and monopoly pricing power.
Just last month, the FTC announced it would challenge the validity of more than 200 patents on brand name prescription drugs listed in the U.S. Food and Drug Administration (FDA)’s Orange Book. The agency’s Orange Book crackdown and listening session will help shine a light on Big Pharma’s egregious anti-competitive practices and should add to bipartisan momentum in Congress for market-based solutions to lower drug prices for the American people.
Here is what experts and advocates had to say during the listening session:
Sneha Dave, Founder & Executive Director, Generation Patient: “We began initially investigating pharma’s monopolization practices because many of us, including myself, were on therapeutics like Humira. What we uncovered was that patents – and not necessarily the cost of ingredients or manufacturing – were the reasons why our drug prices were so high and why so many of our community members were unable to afford their therapeutics. While Humira gets a lot of attention, it is unfortunately not an isolated case. We see lately with Ozempic having filed over 300 patents – and cases of patent thicketing, product hopping and pay for delay becoming incredible barriers for our community to be able to thrive into adulthood and to be able to have meaningful futures. FTC’s work has shown that brand-name companies are using tactics to undermine price competition. And they’re using these patent thickets to force generic and biosimilar drug companies into agreements that restrict access. And that should be considered anti-competitive… Today, brand name pharma companies are nonstop patent machines, defining the smallest product changes as innovative and worthy of patents and making changes just so that they can apply for more patents. And these are patents that are again not meaningful for patient lives… The current patent system creates perverse incentives that direct research toward incremental modifications of existing drugs rather than genuine breakthroughs.”
Alex Brill, Senior Fellow, American Enterprise Institute: “Large, complex, high stakes drug markets do attract aggressive anti-competitive behaviors… The collective effects of a host of anti-competitive tactics, some of which we've already discussed, but including things like patent thickets and product hopping, raise the risk to manufacturers that the time and cost required to bring a biosimilar to market will be extended in an unpredictable manner. These strategies create uncertainty and are unequivocally inefficient.”
Michael Carrier, Board of Governors Professor, Rutgers Law School: “So a really quick recap of five leading product hopping cases, just in terms of the facts. First, we have the Tricor case. That was a hard switch. That’s where the brand company pulls the old version from the market and the market is just left with the new version. That is what happened in Tricor. Second is the Walgreens case, which was a soft switch from Prilosec to Nexium. Soft means that Prilosec remained on the market. Third was the Suboxone case, where the brand firm raised the original price. It also disparaged the original. It warned of false safety concerns. Fourth is the Doryx case, which was a hard switch where the brand company bought back and destroyed capsules. And fifth was the Namenda case, where the brand version removed the original even before that, and now it’s the discontinuance. That is all unilateral conduct…
Sometimes we hear that we can’t do anything on product hopping because that would harm innovation. I think to the contrary. If you remove antitrust legislation here, then that is a problem. I’ve written about examples like Tricor and Neurontin and Namenda, where the brand firm had the innovation and sat on it for years until the generic was about to enter the market. And so, we need to have robust competition here through legislation and the courts.”
Sneha Dave, Founder & Executive Director, Generation Patient: “We are really excited about current legislative solutions that exist to reframe and reform the patent system, namely on legislation related to patent thickets and USPTO/FDA collaboration to ensure better data sharing between both agencies so that brand companies are not telling FDA something and USPTO something else… We would also love to see reforms at the PTO, such as increasing patent examiner time on scientific patents, so that they have adequate time to review information. There’s a recent Government Accountability Office report that showed that patent examiners were begging for extra time.”
Monday’s session was the first of three joint listening sessions taking place this summer in response to President Trump’s April executive order titled, “Lowering Drug Prices by Once Again Putting Americans First.” Future sessions in July and August will discuss regulatory reforms to support greater competition in the prescription drug marketplace, and solutions to lower drug prices.
Read more about Big Pharma’s patent abuse HERE.
Read more on bipartisan, market-based solutions to hold Big Pharma accountable HERE.
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